Банкеръ Weekly

Briefs

ENERGY PRICES IN POST-ELECTION CHAOS

Expectations that right after the elections the State Commission for Energy and Water Regulation (SCEWR) will announce the decision it delayed for a month for raising the prices of electricity, central heating, water and natural gas supply did not come true. With one small exception: in the first week following the vote the regulating body approved new, higher blue fuel tariffs. Maybe because its price grew only symbolically - by 1.9 per cent.The news about the higher natural gas price came along with repeated announcements of benefits prepared for people in the lowest income bracket who use that fuel for their heat supply. However, it was not the energy regulator but the social ministry to make the announcements. On June 27, the Deputy Social Minister Nikolay Angelov declared that due to an amendment to the energy support regulation, gas supply assistance will be launched in the next heating season. Applications will be accepted until November 1, the term valid for requesting electricity, central heating, and coals social assistance.In fact, the new energy benefits were among the promises the social minister Hristina Hristova gave before the elections. She said some time ago that the amount would cover the heat supply needed for a room of average size. According to her deputy, gas is now used for heat supply in Mezdra, Botevgrad and Pravets, while parts of Sofia, as well as Varna, Stara Zagora, Yambol, General Toshevo, Plovdiv, Pleven, Veliko Turnovo, Gorna Oryahovitsa, Lyaskovets, Dobrich, Razgrad, Dupnitsa, and Bourgas were gasified in the past year. All poor residents of these regions are eligible to up to BGN40 a month, the social ministry claims. It seems that its experts are not at all worried by the huge amount needed for construction of domestic gas installation. Calculations made by gas distribution companies show that a household is to pay approximately BGN5,000-6,000. But the experts led by Minister Hristova insist on building the installations with rescheduled payments proposed by... the gasifying companies. Alternatively, companies may announce another, lower tariff valid for needy people only. There is also a third possibility, stipulating that municipalities pay their costs by applying for resources under European life quality improving programs.But are the minister and her team aware of the simple principles of the market economy? And if they are, where do they find a reason to oblige private companies (such as all gasifying companies) to offer social tariffs or rescheduled payment? An idea of that kind is partly suitable if only talking has nothing to do with reality. Either before or after the elections.The State Commission for Energy and Water Regulation seems to be wandering about, too. It announced earlier this week it would insist that the cheap 75 kilowatthours of electricity (150 kilowatthours for flats not supplied with central heating) be valid by October 1, 2006. But how the new private owners of electricity distribution companies will agree with that remained a mystery. Yet, the commission sent back the draft general conditions of the agreements with consumers to all electricity distribution companies and to five or six heat supplying companies. Our requirements have been raised in order to provide the best possible protection of the consumers' rights. We maintain permanent correspondence with the owners of electricity distribution companies so that we can have a clear idea of how each investment will affect the price of electricity. We gave them 14 days to correct their mistakes, the Commission Chairman, Professor Constantin Shoushoulov said.On June 27 the commission explained in details what kinds of bonuses to the end consumers the owners of electricity distribution companies should plan. New prices and percentages were not discussed at all. However, electricity of medium and low tension for companies will become more expensive next autumn. The Federation of Consumers did not comment on the issue, either. Probably because the SCEWR has totally taken away its functions.Nor did the various business communities comment on the situation. Probably absorbed in political shuttles around the new cabinet, entrepreneurs neglected the prepared increase of prices electricity for industrial purposes. They are still to react to the move and it will be curious whether or not they will agree with the social political excitement or will insist on adopting the united Europe model - the more electricity a customer consumes, the lower the charge. Regardless of whether the electricity is supplied to a panel flat, a private estate, or an enterprise.

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