Bulgaria Power Co 'to Return to Profitability' in 2016

Energy | June 24, 2015, Wednesday // 12:45|  views

Ivan Ivanov, the head of Bulgaria's national power regulator KEVR, is seen here at a hearing in Parliament on June 24, 2015. Photo by BTA

The new pricing model due to be applied by Bulgaria's national energy regulator KEVR will help the state-owned utility company return to profitability next year, KEVR's head has said.

He has also warned that 2015 will present a last-ditch effort to reform the sector.

Ivanov's comments on Wednesday came at a National Assembly hearing which followed days of tensions between KEVR (Commission for Energy and Water Regulation) on the one hand and businesses and government on the other.

KEVR is planning on raising power prices for industrial consumers, and initial rulings which would have activated the change as of July 1 triggered much resentment from the industry and the cabinet alike.

A Parliament Committee overseeing KEVR on Tuesday moved to adopt a one-month delay in higher tariffs. A thumbs-up vote from the Committee is usually repeated in the votes of Parliament's plenary sessions.

Speaking from the National Assembly's rostrum, Ivanov told lawmakers that his watchdog did not rule out the option to postpone new prices for a month.

In his words, expenditures at the National Electricity Company (NEK) will have to shrink further in 2015, but new revenues worth BGN 702 M are expected from newer price rates agreed with CountourGlobal and AES thermal power plants, CO2 emissions and the increase of so-called "liabilities to society" fee that companies exporting energy abroad will have to pay.

NEK's billions-worth debts generated over two decades add to a crisis in the energy sector, with many experts saying a hike is inevitable to prevent it from a collapse.

Both household and industrial consumers in Bulgaria pay the lowest prices for energy in the EU.

But in 2013 a nationwide protest against hikes toppled down PM Boyko Borisov, who was then in his first term.

Ivanov also reiterated Bulgaria's commitment to introduce a liberalized energy market, a step required by the EU.

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Tags: energy, industrial consumers, Boyko Borisov, Bulgaria, power prices, industry, KEVR, Ivan Ivanov, ContourGlobal, AES


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