By Sean Carney
Bulgaria's energy regulator Monday delayed until at least next
month the deadline for deciding whether to revoke the operating
licenses of two Czech and one Austrian electricity companies for
delinquent payments to the state-run National Electricity Company,
or NEK.
At issue is a dispute between the regulator and the three
companies--CEZ AS (BAACEZ.PR), EVN AG (EVNV.VI) and Energo
Pro--over repayments worth several hundred million euros. The
electricity companies have said they have honored all legal and
commercial responsibilities.
The European Commission has been in touch with the Bulgarian
government and expressed its concerns that the regulator is not
acting independently of political pressure and that it is trying to
abuse the finances of foreign companies to support state-owned
entities.
The regulator at Monday's public hearing didn't seek additional
information from the three companies and set May 12 as the date by
which they must present their official positions, said Kremena
Stoyanova, chairperson of the managing board at CEZ Electro
Bulgaria.
EVN confirmed the new deadline had been set and that the
regulator did not seek any new information Monday.
The regulator couldn't be reached immediately for comment.
Bulgaria's electricity sector faces a liquidity crisis, as
domestic energy legislation stipulates that foreign-owned
electricity distribution companies have to pre-pay renewable energy
feed-in-tariffs to NEK, which must then reimburse the three
distribution companies for those payments once it collects fees
from end-users.
However insolvent NEK has failed to compensate the distributors,
who in turn have pro-rated their accounts payable to NEK to reflect
the difference.
The situation is further complicated as the local market faces
dwindling demand, an oversupply of power and the need to invest in
modernizing baseload power generation for standby capacity should
production fall at renewable plants.
The cash-flow crisis and generation surplus were initiated by
the government's offer of generous subsidy levels on zero-emission
renewable energy, leading to a buildup of wind, solar and
hydro-power generation facilities to over 1,300 megawatts of
installed capacity.
The government in Sofia had planned for only 300 MW of renewable
power capacity.
Write to Sean Carney at sean.carney@wsj.com
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