Банкеръ Weekly

Briefs

WHO HAS THE UPPER HAND IN THE GAME OF CENTRAL HEATING PRICES?

Although big summer heats have already begun, the issue of central heating prices ranks among the most important items on the public agenda. With July 1 approaching mercury will be rising in both the direct and figurative sense. Because it will become known then exactly how much the price of central heating energy will go up.
There will be new prices of central heating as of July and the expected hike of power stations, operating on natural gas is about 7-8 per cent, Konstantin Shoushoulov, Chairman of the State Commission for Energy and Water Regulation, said in the beginning of the week. There are real grounds for such a price hike. As of the beginning of 2006 natural gas prices rose by some 10% which reflected on the costs of almost three thirds of the central heating stations in the country.
The price increase is certain, but this time it will hit most the people with disconnected radiators. At least that conclusion could be made from the amendments to the Energy Act which the Government has moved for approval by Parliament. The most essential one is in article 143 of the legislative act, stipulating that between 20 and 40% of the readings of the common heat-flow gauge would be distributed between all the people living in a certain building, supplied with a central heating system. (Currently some 15-30% are distributed.) That means that even if you don't use central heating you will be paying more for heating the basements, the landings between floors, and the attics, although there are few blocks of flats with radiators in the common parts. In that way, however, central heating utilities guarantee they will be getting money from everybody, also from people who are trying to cut down their bills for heating. That's a nice bonus added to the so-called power fee. Of course, the Energy Act does not include any provisions about its reduction or elimination, despite the multiple declarations of Energy Minister Roumen Ovcharov that it is an anachronism and should be eliminated. Instead, it was decided that the owners of flats would decide themselves if they wanted that fee or not. The argument was that in buildings where a small percentage of households have given up central heating or where there is steadier consumption, the power fee wouldn't have a big effect on the bills. Thus, the Ministry of Economy and Energy left the decision to the neighbours, which in Bulgarian conditions means only quarrels and keeping the situation unchanged.
In fact, two months ago the draft bill was presented to journalists and it was quite different then. The percentage by which the heating energy distributed between the common parts would be increased, was not there and increased control on the central heating accounting firms was projected. Only companies covering certain criteria would be allowed to act as such and the certified were to be entered in a public register with the Ministry of Economy and Energy. However, it turned out these intentions had vanished while the draft bill was waiting in the Council of Ministers. Under a breath it is said that was one of the reasons for Deputy Minister Ivanka Dilovska to file her resignation. And central heating accounting firms will be still bossing the show as they want.
Strange as it may sound, the only reaction against these changes came from the State Commission for Energy and Water Regulation. Its Chairman Konstantin Shoushoulov said he would propose that people whose radiators are switched off and who have stopped their warm water supply not pay a power fee, while consumers who have switched off their heat supply but are supplied with central heated water pay half the fee. When I meet Minister Ovcharov, I'm going to insist strongly that we find a fair solution to the power fee problem. I'm also going to lobby in Parliament against the project for increasing the share of the common parts in the heat bills, the head of the regulator said.
One possible reason for such outburst of social concern may be... the jacuzzi, the sauna and the massage device that were found in the office of the Sofia Central Heating Utility former director Valentin Dimitrov by inspectors last week. Simply because the extras have been paid by money collected from the Sofia citizens at a price approved by the regulating commission.
It is another story that the commission itself has no practical possibility to propose amendments to a normative act that has been approved by the cabinet already. Still, this can be done by the MPs when the bill is being reviewed. The debates that are to begin on May 31 may be quite interesting and strenuous. The opposition will hardly remain indifferent towards the perspective that central heating accounting companies remain uncontrolled again. Serious support in this direction can also be expected from the Chairman of the parliamentary energy commission, Ramadan Atalay, who even proposed that these accounting companies be eliminated because of the numerous appeals the National Assembly received against them.
Eventually, the MPs are the ones to make a final decision. Moreover, that decision will demonstrate to what extent companies related to the central heating supply have managed to form a lobby both in the Government and the Parliament.

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