EVN to launch legal action against Bulgaria due to cut in energy sale proceeds.

By bne IntelliNews March 20, 2013
Austrian energy utility EVN said it has officially informed Bulgarian authorities about intentions to launch proceedings against the Bulgarian state due to recent actions aimed at reduction of the proceeds from the sale of electric energy. EVN has commenced proceedings against the government as it considers that Bulgaria's investment protection obligations have been violated following a recent decision of the Bulgarian administrative court from March 2013 to repeal the special levy for network access of renewable energy production installations. The electricity price in Bulgaria was reduced by some 7% as of March 1, following mass protests in the country against high electricity bills. The price cut was achieved on the back of a reducing of the recognised technical losses in electricity transmission to 12% from 15% up till now. In Bulgaria, EVN is active through its subsidiaries EVN Bulgaria Elektrosnabdiavane EAD and EVN Bulgaria Elektrorazpredelenie. It supplies electricity to 1.6mn customers in the southeast part of the country. The company demands a review of the electricity price as of April 1 that may not necessarily affect the end consumers. It said that its accumulated losses since July 1, 2012 have exceeded BGN 100mn due to the current mechanism for compensation of costs arising from the purchase of renewable energy. EVN also warned that by not acknowledging actual financing costs, the payment of feed-in compensation to which producers of renewable energy are entitled is reduced. In the next 3 to 6 months. the government and EVN should enter into negotiations and attempt to amicably resolve the dispute.

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