Parliament postponed the liberalization of the electricity market by one year

© Yulia Lazarova

Once again, the energy reform is postponed and as a result will probably lead to the country losing the expected BGN 1.3 billion under the Recovery Plan (RPU). The reason is that at the penultimate session of the 49th National Assembly, the deputies postponed the liberalization of the wholesale electricity market by one year.

The proposal was supported in the second reading with 152 votes “for” by the parliamentary groups of GERB, DPS, “Vazrazhdane”, BSP and “Ima talikny narod”. “Against” and “abstained” only voted “We continue the change – Democratic Bulgaria”.

According to the current Energy Act, the liberalization of electricity was supposed to start in stages from 1 July 2024 – when the National Electricity Company (NEK) would cease to be a public supplier, and instead electricity distribution companies would take over this function, and complete with households entering the free electricity market from the beginning of 2026.

In other words, this means that the three electricity supply companies in the country – “Electrohold”, EVN and “Energo-pro” would buy the necessary energy from the exchange and sell it every month directly to domestic end users, such as the Commission for Energy and Water regulation (KEVR) to determine compensation to cover part of their costs, and the Council of Ministers to determine by regulation the price at which the household should pay.

Although the change in the Energy Law, which set the terms for the liberalization of electricity for domestic consumers, was adopted in September 2023 with the votes of GERB, “We continue the change – Democratic Bulgaria” and DPS, now the parties of Boyko Borisov and Delyan Peevski abruptly changed his position and, together with the opposition – BSP, “Vazrazhdane” and “Ima talikny narod”, propose postponing the reform.

From “Continuing the change – Democratic Bulgaria” warn that the European Commission will hardly remain uninvolved, as the country is about to lose BGN 1.3 billion under the Recovery and Sustainability Plan, as the deadlines for full liberalization are written in it.

The other formations, however, continue to claim that the EC does not specify a specific date for the introduction of liberalization, and also point out that the money under the plan will not come anyway because of other legislative measures that have not been carried out. Instead, the political forces without “Continuing the change – Democratic Bulgaria” say that if the exit to the free market is not postponed, it will lead to severe social problems due to “a sharp jump in prices and the inability of household consumers to adapt to the new conditions”.

Another argument against liberalization, expressed mainly by GERB and DPS, is that there are not enough funds in the “Security of the Energy System” fund (FSES) with which to pay the possible compensations for households, as well as to ensure liquidity for the electricity supply companies. It is precisely for this reason that the National Assembly obliged the until recently Minister of Finance Asen Vassilev to replenish the fund with BGN 1 billion, but the government referred this decision to the Constitutional Court.

Meanwhile, during the debate in the plenary hall, BSP leader Kornelia Ninova made an editorial correction and suggested that the liberalization of the electricity market for household consumers be postponed not by one, but by three years, i.e. from July 1, 2027. Before that, she had a meeting with the protesting miners and stated that this was their proposal. According to her, the system was not ready for its introduction. The proposal was not accepted.

Radoslav Ribarski from “We continue the change – Democratic Bulgaria” pointed out that this will deprive people of a gradual transition to a liberalized market. He also pointed out that the price of electricity from the mains is not included in the electricity mix that forms the regulated price.

“The price that is being formulated with them is extremely high because of the carbon emissions. If they are allowed into this mix, the electricity prices will increase. (…) The effect you are looking for may turn out to be a defect,” he stated. .President Rumen Radev also met with the protesting energy workers, who called on the parliament to reject the liberalization of the electricity market, even if the grounds of the head of state’s veto, which he imposed last year, had to be used. The head of state announced that he stands behind the demands of the energy workers and insists on preserving Bulgaria’s energy autonomy.