Банкеръ Weekly

Briefs

ELECTRICITY NEEDS INTELLECT, NOT NEW INVESTMENTS

In the first week of the campaign June electricity prices made the public get excited. Following the article of the BANKER weekly (issue 21), other media approached the topic, too, and started to throw up apocalyptic forecasts for the new energy tariffs. A Sofia daily even warned that if the cheap 75 kwh quote is abolished, electricity would become twice more expensive. It seems that this was just what the politicians were waiting for. They flooded the voters with oaths that energy prices would become subject to strict control. But the populism in the ideas launched stifled the few rational proposals made by the future rulers. The Bulgarian Socialist Party (BSP) appeared the winner. Its leader Sergey Stanishev promised the inhabitants of the Sofia Faculteto quarter that the state would talk with the Romanies in order to find a way for gradual payment of their electricity bills. Stanishev did not explain how the new private owners of the Bulgarian electricity distribution companies would be forced to reschedule their receivables. It also did not become clear how Romanies would control the bills they are charged by the electricity supplier: whether they would climb with the collectors up the high pylons where their electrometers were put in order to impede massive thefts of electricity, or the electrometers would be put down in their houses again so that everybody would control and consume as much as he wanted to. The idea may help the Coalition for Bulgaria attract a few votes from Faculteto, but will certainly not be accepted by the electricity distribution companies.Frightened by the public discussions on electricity tariffs, their owners hid themselves and even refused to make the presentations they had promised for the third international conference Cross-Border Energy in the Central European Initiative Countries. Still, the Chairman of the State Energy and Water Regulation Commission, Professor Konstantin Shoushoulov, promised during the forum that the whole electric and energy system would become subject to revision in the summer. The Commission will prepare a balance of the system and will try to split fairly the increase of the costs among all of its participants: the producers, the National Electricity Company (NEC), and the electricity distribution companies. The investment programs and commitments of these companies' owners - the Czech CEZ, the German E.ON, and the Austrian EVN, will be examined in details. If in the next three years electricity distribution companies do not restrict the loss of electricity by 4%, the profit rate they are allowed will be cut from the current 16 to 12%, Mr. Shoushoulov threatened. The fee their new owners intend to impose on the reporting of electrometers may be paid only by subscribers willing to get monthly reports or by those living in areas zoned for summer houses, the Commission's Chairman added. If the fee gets approval, it won't amount to BGN3.60 per month (as proposed) but will be smaller and will be included in the average electricity price. Electricity distribution companies in Sofia, the Sofia region, Pleven, Varna and Gorna Oryahovitsa, owned by the Czech CEZ and the German E.ON, insist that the new fee be imposed in October together with a 15-20% increase of the price of everyday electricity. The regulatory body underlined that the investment programmes, submitted to it by electricity distribution companies, would be considered very carefully. All expenses should be justified in detail and the projected investments - rescheduled in time in order to avoid their simultaneous accumulation over the next three years. Thus, the price hikes of electricity would be made in stages and rendered affordable. The Energy Minister Miroslav Sevlievsky is of the opinion that the electricity distribution companies should be restructured not by new investments, but by the intellect of their new owners. This intellectual proposal confused the experts in the branch for whom the reduction of losses, the improvement of services, and the expansion of the network have purely technical measurements and could be achieved only by fresh money. And that money could only come from the end consumers of electricity.

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