SOFIA (Bulgaria), September 25 (SeeNews) – Bulgaria intends to either renegotiate its long-term power purchase agreements (PPAs) with private plants and producers of renewable energy or make legislative changes in the next months to reverse the losses of state-owned utility NEK, local media reported, quoting the chairperson of the country's energy regulator SEWRC.
The decision to raise electricity prices, recently made by the regulator, will not be the only step to cover the losses accumulated by the National Electricity Company (NEK), business portal Investor.bg reported, quoting Svetla Todorova.
Last week, the country's energy regulator said Bulgarian state-owned power utility NEK posted a third-quarter loss of 236.7 million levs ($154 million/121 million euro), largely due to costs which were not calculated into the price at which it sells electricity to end-suppliers.
According to SEWRC, NEK's obligation to buy under long-term contracts the electricity generated by power plants Maritsa Iztok 1 TPP, owned by US company AES, and Maritsa Iztok 3 TPP, owned by another US company - ContourGlobal, resulted in a combined loss of 115.4 million levs for the utility in the review period. Another 71 million levs of NEK's loss were the result of not calculating into the price for end-suppliers the full amount of costs sustained by the power utility due to its obligation to buy power from renewable sources.
SEWRC earlier suggested the PPA signed with AES and ContourGlobal in 2001 should be amended so as to provide for a 30% cut in the price for electricity purchased from Maritsa East 1 and 20% from Maritsa East 3. The plants should also be required to sell on the free market the electricity generated by some of their units.
The regulator notified in June the European Commission that the long-term PPAs may be in breach of the community's rules on state aid. It also asked the Commission to reconsider the provision of state aid to producers from renewable energy sources (RES) in Bulgaria as the country achieved in 2012 its 2020 target of 16% green share in the country's energy mix.
On September 19, the regulator proposed that prices of electricity for households increase by an average of 9.79% as of October 1. For end-suppliers, the SEWRC proposed that prices go up to 125.32 levs from 114.10 levs per megawatt hour, an increase by 9.83%.
NEK is a 100%-owned subsidiary of state holding company Bulgarian Energy Holding.
(1 euro=1.95583 Bulgarian levs)
Choose your newsletter by Renewables Now. Join for free!
