site.btaMPs Vote to Postpone Liberalization of Household Electricity Market Indefinitely

Adopting revisions to the Energy Act conclusively on Friday, the National Assembly postponed indefinitely the liberalization of the electricity market for household customers.

Bulgarian households will remain on the regulated electricity market and will be completely protected by the State, Energy Minister Zhecho Stankov said during the debate. The provisions currently in force stipulate that the electricity market for household consumers should be liberalized on July 1, 2025, he recalled.

The Government will not allow households to be exposed to high electricity prices on the free market, he underscored. The renegotiation of the National Recovery and Resilience Plan (NRRP) with the European Commission is related to directing funds to household consumers, the funds are for the people, Stankov stressed. And he explained that the bill will also give all 756 buildings that are in the NRRP a chance to be renovated, and the more than 1,500 households that have submitted documents for solar or photovoltaic panels on their roofs to build them.

"The way and the model that we are implementing is to keep household customers in a regulated market with a  price clearly guaranteed by the State. Every year on July 1 until June 30 the next year, they will know in advance what the price of electricity will be and there will be no change in their bill, the Minister stressed. If until now the Electricity System Security Fund, which is 100% financially stable, compensates the final supplier - the National Electricity Company (NEK), now the compensation will be directed directly to Bulgarian electricity customers," Stankov explained. In his words, with the package deal that Bulgaria has proposed to the European Commission, household customers will be protected and the coal-fired power plants will continue to operate in the region so that our energy security is guaranteed.

Iskra Mihaylova MP of Vazrazhdane said that in practice, electricity customers end up on the liberalized market, because “regulated price” in the Energy Act is replaced by “price”. Customers will receive some compensation for some time until GERB decides, she added.

Vazrazhdane and Morality, Unity, Honour (MECh) believe that citizens are being lied to. Regulated quotas, which are only for a regulated market, are also being abolished, said Mihaylova, while MECh said that all this is a fake scheme to rob Bulgarian citizens because the Government is in dire need of money.  According to the MPs of MECh, the way out is not to pay the carbon allowances, as most Europeans do; the cheap energy will immediately translate into profit for businesses.

"All those who are tearing their shirts off today from the rostrum understand very well the compensation mechanism," Minister Stankov replied. The new model protects Bulgarian citizens by compensating electricity customers directly, as everyone's bill will show the market price and the price they have to pay to see the difference, he specified.

Parliamentary Energy Committee Chair Pavela Mitova (There Is Such a People) commented that by voting against this bill, its opponents want Bulgarians to end up on the liberalized market as early as July 1, 2025.

With the adopted texts, the liberalization of the market for household customers is linked to future reports of the Energy and Water Regulatory Commission (EWRC) on the State's readiness to protect households. The energy regulator's annual reports to the European Commission will include information on progress towards effective competition between suppliers and the transition to market-based prices for household customers.

The EWRC sets compensation to cover part of the costs of household end customers for electricity purchased from an end supplier. Its amount may be differentiated according to the amount of energy purchased. The compensation may be for all or part of the amount of electricity purchased by customers, taking into account the revenues of the end suppliers from the sale of electricity on the intraday market segment which exceed the costs of its purchase. Once every three months, when determining the amount of compensation, the EWRC shall make an adjustment for the excess revenue generated by the application of a tariff structure to the base cost of electricity per MWh during that period, which adjustment may be deferred.

On May 7, the National Assembly approved at first reading two bills amending the Energy Act - of BSP - United Left and of There Is Such a People (TISP) - and rejected the draft changes tabled by Vazrazhdane.  BSP - United Left's bill envisaged postponing the liberalization of the electricity market for households by two years, that of TISP by five years, and that of Vazrazhdane by ten years.