EU to probe Bulgaria energy sector

April 12, 2013 at 12:02 AM   |   0 comments

SOFIA, Bulgaria, April 10 (UPI) -- The European Union will probe Bulgaria's energy sector after protests over high electricity prices this year forced the resignation of its previous government.

The current caretaker Bulgarian Cabinet announced Wednesday it had received confirmation from the European Commission an investigation to be carried out by its directorate-general for energy would begin next week.

The focus of the probe will be the conduct and independence of Bulgaria's State Commission for Energy and Water Regulation, or DKEVR, the role played by the state-owned Bulgarian Energy Holding and the operation of the country's dysfunctional, partially liberalized electricity market, among other topics.

The investigation comes after a series of street demonstrations and marches triggered by quickly rising electricity prices in February ultimately toppled the government of Prime Minister Boyko Borisov.

Meanwhile, foreign energy distribution companies such as the Czech Republic's CEZ and Austria's EVN have threatened legal action over regulatory barriers erected by the government to reduce the amount of costlier renewable energy in Bulgaria's energy mix.

Consumer prices spiked by 13 percent last summer, and the former government responded by trying to cut feed-in tariffs paid to the impoverished nation's booming solar-photovoltaic power sector and by imposing grid access fees -- efforts that ultimately failed, Europolitics.com reported.

The caretaker government said Wednesday the EC probe was agreed to during a visit by caretaker Prime Minister Marin Raykov, caretaker Deputy Prime Minister Ekaterina Zaharieva and caretaker Economy and Energy Minister Asen Vasilev to Brussels late last month.

"The experts will review the legislative framework and the structural components of the Bulgarian energy sector," the government statement said. "The objective is to identify the most important problems in the sector."

During the investigation, EU experts are to hold bilateral meetings with the Ministry of Economy, Energy and Tourism, DKEVR, and officials of the largest private players in the country's energy sector.

The EU has mandated full liberalization of the Bulgarian market by Jan. 1, 2015, which will likely usher in still higher prices, and Brussels is seeking to untangle Bulgaria's energy situation to ease the transition.

Vasilev said the European Commission's check "should give a realistic view on the energy sector," the Sofia News Agency reported.

"The most important is to see where the faulty practices are and fix them, otherwise everyone in the sector would continue to ask for price hikes," he said. "It we do fix them, then we will find reserves in the system and prevent price increases."

The interim energy minister said his own probe found that some photovoltaic plants are overstating how much electricity they're producing, resulting in overpayments.

"These plants have very high installation cost and this is what makes the prime cost of the energy they produce much higher compared to the one coming from conventional power plants," he said. "Europe already started backing (away) from green energy over this."

DKEVR Chairwoman Evgenia Haritonova broke the news Tuesday electricity prices were likely to go up in July, but wouldn't specify by how much or whether the increases would be dramatic, the Bulgarian news agency said.

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