High tension emerged again in Bulgaria’s power engineering sector. After the unabated skirmish between Brussels and Sofia regarding the construction of the South Stream gas pipeline and the possible gas crisis in Ukraine, now it is turn of the power engineering field to be in focus. The inspection of the State Energy and Water Regulatory Commission ascertained that the three power distribution companies operating in Bulgaria have diverted in the period 2008-2012 some EUR 420 million and made a total of 2,690 infringements such as poor quality electricity, problems linked with the electricity meters and bigger losses calculated in the final price of the electricity.

The power distribution companies denied the accusations and the European Commission has warned about a possible political pressure exerted over these companies. This is so, because all three companies - CEZ, EVN and Energo Pro are foreign firms who risk losing their licenses. The SEWRC is to impose fines ranging from EUR 28 million to EUR 1.3 billion to the power distribution companies for their infringements. However, the State Energy and Water Regulatory Commission have not yet decided whether to cancel the licenses of the three companies. Moreover, the latest report of SEWRC was released only a week before the elections for European Parliament and it may cause a serious international scandal.

The main accusations towards the power distribution companies are linked with the fact that all of them have increased their expenditures and the saved money was used for administrative purposes, consulting services, managers’ contracts, etc. The additional expenditures amounted to EUR 420 million and were not marked in the reports of the companies. However, this money was calculated in the final price of electricity supplies. Thus, their profit margins were decreased and the taxes paid to the state were lower.

The three power distribution companies assure that they acted in line with the local legislation and that some assertions of SEWRC create wrong impressions among the public in Bulgaria. They will appeal the sanctions, because in their view the inspections were made chaotically and intentionally.

Ambassadors of six EU countries warned that the possible cancellation of the companies’ licenses would send an extremely negative signal to all investors. The first diplomats of Austria, the Czech Republic, Denmark, Finland, France and Germany insist that the Bulgarian government should not exert political pressure over SEWRC and solve all existing problems in line with the Bulgarian law. The Greek Presidency of the EU also stood in support of the power distribution companies which is a signal that the European Union is monitoring closely all problems in Bulgaria. The EU Commissioner for Energy Günther Oettinger also backed the power distribution companies and commented that the decisions of the regulator must correspond to the infringements and be well motivated. Mr Oettinger put under question the independence of the State Energy and Water Regulatory Commission after the latest political statements regarding the cancellation of the licenses of the power distribution companies. The European Commission is ready to take all necessary measures to guarantee the law observance in the whole EU and this could be viewed as an alarm that it may initiate again punitive procedures against Bulgaria. The outcome is yet to be seen.

English version: Kostadin Atanasov