Bulgaria Power Utilities Demand Electricity Price Hike

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Western Bulgaria Faces 13% Electricity Price Hike

Postby Admin » Mon Feb 28, 2011 1:31 pm

novinite

Western Bulgaria Faces 13% Electricity Price Hike

The Czech-owned power utility CEZ, providing electric power to western Bulgaria, is requesting a 13% price increase after July 1, 2011.

The request must be approved by the State Commission for Energy and Water Regulation, DKEVR. The approval would mean that the electric bill of a household in western Bulgaria will go up by BGN 5.5 a month on average

CEZ say the price increase takes into account real expenses, inflation, investments, market liberalization and energy effectiveness and is based on the price structure approved by DKEVR. The price is also formed on the principles of equality of all customers.

Since the beginning of the current regulatory period, DKEVR had estimated CEZ annual investments at BGN 35 per customer while in south-eastern and north eastern Bulgaria, where the other two utilities operate, they are BGN 75 and BGN 65 respectively. CEZ say this unbalance is unacceptable because the company services the most customers – over 2 million and has the longest network of over 60 000 km.

40% of the population of the country lives in western Bulgaria where the capital Sofia is located, in addition to part of Bulgaria's top winter resorts, all forming a significant percentage of the Gross Domestic Product (GDP), CEZ point out.

The company explains the price increase is a must in order to generate the needed revenues of BGN 437 M, and optimization of customer service and prevention of theft will also be considered as reserve.

In the last year, theft has inflicted losses for CEZ of over BGN 17 M.

The CEZ proposal takes into consideration the need to solve the problem with the purchase of facilities built by third parties ASAP. The amount needed for it was BGN 120 M at the end of 2010.

The company also points out that 84% of all cables date from 30 years ago with a warranty period of 25. 41% of the air power lines are over 30 years old with a warranty period of 30 years.
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Re: Bulgaria Power Utilities Demand Electricity Price Hike

Postby Guest » Mon Feb 28, 2011 1:33 pm

Admin wrote:novinite

Western Bulgaria Faces 13% Electricity Price Hike

The Czech-owned power utility CEZ, providing electric power to western Bulgaria, is requesting a 13% price increase after July 1, 2011.

The request must be approved by the State Commission for Energy and Water Regulation, DKEVR. The approval would mean that the electric bill of a household in western Bulgaria will go up by BGN 5.5 a month on average

CEZ say the price increase takes into account real expenses, inflation, investments, market liberalization and energy effectiveness and is based on the price structure approved by DKEVR. The price is also formed on the principles of equality of all customers.

Since the beginning of the current regulatory period, DKEVR had estimated CEZ annual investments at BGN 35 per customer while in south-eastern and north eastern Bulgaria, where the other two utilities operate, they are BGN 75 and BGN 65 respectively. CEZ say this unbalance is unacceptable because the company services the most customers – over 2 million and has the longest network of over 60 000 km.

40% of the population of the country lives in western Bulgaria where the capital Sofia is located, in addition to part of Bulgaria's top winter resorts, all forming a significant percentage of the Gross Domestic Product (GDP), CEZ point out.

The company explains the price increase is a must in order to generate the needed revenues of BGN 437 M, and optimization of customer service and prevention of theft will also be considered as reserve.

In the last year, theft has inflicted losses for CEZ of over BGN 17 M.

The CEZ proposal takes into consideration the need to solve the problem with the purchase of facilities built by third parties ASAP. The amount needed for it was BGN 120 M at the end of 2010.

The company also points out that 84% of all cables date from 30 years ago with a warranty period of 25. 41% of the air power lines are over 30 years old with a warranty period of 30 years.


I stand to be corrected on this, but I believe plus 13% would take them over UK average prices? HearNO SeeNo SpeakNo
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Re: Bulgaria Power Utilities Demand Electricity Price Hike

Postby mickhev » Mon Feb 28, 2011 8:09 pm

Just paid ours for the xmas period 170 lev so i suppose not too bad

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Re: Bulgaria Power Utilities Demand Electricity Price Hike

Postby Admin » Fri Mar 11, 2011 11:52 am

Sofia echo

Going haywire


It is open season on Bulgarian electricity distribution companies and once again it was ultra-nationalist Ataka leader Volen Siderov that marked the occasion with his usual flair. "CEZ is Czech and is siphoning out enormous sums from Bulgaria. Director Rossen Yordanov is a janissary," he said.

Siderov accused Yordanov, once an MP candidate for centre-right Union of Democratic Forces (UDF), of financing the party, an accusation rejected by UDF leader Martin Dimitrov, who called Siderov a liar. Several hours later, CEZ said in a statement that it could not be implicated in political arguments. Several hours later, Yordanov was no longer the head of the maintenance division at CEZ, with the company saying that it was a case of mutual termination and that the timing was coincidental.

Every year, at the end of February, the distribution companies submit their business plans to the State Energy and Water Regulatory Commission (SEWRC), which outline the companies' planned spending for the coming year. Usually, the proposals are double the size from the previous year and always come with a request to increase end-user prices.

The script is set in stone by now: Ataka and the right-wing Internal Macedonian Revolutionary Organisation party call protest rallies and threaten to take the matter into their own hands (last year's wrinkle was Prime Minister Boiko Borissov threatening to nationalise the three companies), followed by SEWRC trying to calm the waters by saying that it would never allow a drastic increase in prices. By mid-summer, the electricity distribution companies' bills are cut in half, while state-owned power utility NEK somehow avoids similar treatment.

On the edge

This year, NEK's request was fairly moderate, asking for only a five per cent increase. The private distribution companies' requests, however, will have increased prices for customers by between five and 17 per cent. According to calculations by CEZ, the monthly bill of the average consumer who uses 200 kWh would have to increase by 5.40 leva.

The important part is that the requests are double the amounts demanded in 2010. "SEWRC's decision, now in effect, has led to a drastic decrease in our ratio in the production-transmission-distribution cycle, which is significantly limiting the investment in the distribution segment," said EVN, the Austrian company whose subsidiary services southern and south-eastern Bulgaria.

In 2008, from every 100 leva paid by the consumers, the company received 17 leva. In 2010, that amount was down to 13 leva. With such a drastic decline in turnover and revenue, the company said that it took a 50 million leva loan to carry out investment. "This cannot be a stable solution," the company said.

Germany's E.ON, which services northern and north-eastern Bulgaria, plans to inject cash in its Bulgarian subsidiary through a capital hike.

Neither solution is a good one for the state and consumers. In the first case, the extra costs of EVN's loan will have to be serviced by consumers in the future. In the second case, the state stands to lose future revenue because the equity injection would severely dilute the state's 33 per cent stake in E.ON Bulgaria.

All of this is because of SEWRC's continued policy to help state firms at the expense of the private ones. Over the past three yeras, the regulator has cut the distribution companies' planned revenues by an average of 17 per cent, while NEK and its subsidiary ESO, which operates the power grid, have been approved increases ranging from 12 per cent to 56 per cent.

In 2010 alone, E.ON lost 21 million leva because the NEK and producer prices went up by 8.4 per cent, while the end-user price went up by only 1.9 per cent, pushing E.ON into making a loss.
SEWRC finds itself with the difficult task of balancing the electricity cycle, without the tools to control the management of the state companies, able to only state the facts after the deed is done. Like the fact that NEK has been under-investing in grid maintenance.

Even should the state companies be fined, the effects are negligible, because it would be once again consumers that have to pay for it. Not so with the more efficient private companies, which are much more sensitive to regulator sanctions.

Take or pay

This year's proposals come with a new twist, with EVN offering to change the way in which the cost of grid access is calculated. Now, corporate consumers pay based on the amount they use, but the power distribution company suggested that payment is based on amounts that the companies will declare in advance. The goal is to teach industrial consumers to plan their usage in order to optimise network efficiency.

The proposal sounds modern and, the company said, was entirely in line with the spirit of the forthcoming full liberalisation of the market for business customers. The problem is that it would only penalise those companies that use less electricity than they declare in advance, paying a fee for the difference between the amounts declared and used.

At the same time, the companies that declare lower usage, in part to save on grid connection costs, would not be affected. Yet it was these companies that caused the black-outs on the Black Sea coast in the summer of 2010. Many seaside hotels understate the amount of electricity they really need, literally causing EVN to blow a fuse.

The next episode in the annual saga, the one in which the private distribution companies are being accused of all possible sins, will go on for at least two weeks. SEWRC could use that time to think how to synchronise the submission of business plans when the next financial year rolls around, so as to avoid the pointless attacks against some of the companies in the energy sector.
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Re: Bulgaria Power Utilities Demand Electricity Price Hike

Postby Admin » Tue May 08, 2012 8:45 pm

novinite

Electricity Prices in Bulgaria to Add 10% from July

Angel Semerdzhiev, Chair of the State Commission for Energy and Water Regulation (DKEVR), has confirmed that electricity prices will not increase by more than 10% from July 1.

The DKEVR Chair told journalists Tuesday that power tariffs would not be affected by the loan that the national power grid operator NEK would take from the Bulgarian Energy Holding (BEH) to repay the loan for the scrapped Belene NPP project.

On Monday, Energy Minister Delyan Dobrev announced that the term for the settlement of the EUR 250 M debt on Belene NPP would be extended by a year, with NEK scheduled to pay back some of the money after taking a loan of EUR 50-70 M from BEH.

Dobrev noted that it was more likely that the loan would amount to EUR 50 M because NEK had some free financial resources.

In his Tuesday interview, Semerdzhiev argued that power tariffs were acceptable both for household consumers and for industrial customers because consumption in Bulgaria had been growing over the past few years regardless of the crisis.

The Chair of the energy watchdog assured that the 12% increase in water prices demanded by water utility Sofiyska Voda would not be implemented.
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