Bulgarian Socialists considering re-nationalisation of CEZ unit

By bne IntelliNews February 25, 2013

bne -

The Bulgarian Socialist Party (BSP), which will probably lead the next government following expected snap elections, says it is considering a plan to re-nationalise the local electricity distribution subsidiary owned by CEZ. Meanwhile, the Czech power giant says it will fight the threat of revocation of its operating licence tooth and nail.

With protests against power prices continuing in Bulgaria over the weekend, despite the resignation of the government, Shadow Energy Minister Javor Kujumdziev said the BSP would look at taking the asset back under state control in an interview with Czech daily Lidove noviny.

Meanwhile, CEZ continues to talk tough, insisting on February 22 it will defend its power distribution licences in Bulgaria by all legal means. It argues that public outrage against high utility bills could only be eased by fully liberalising the electricity market, which the European Commission has ordered the country to carry out several times in the past.

"The launch of the process to revoke our licences is inexplicable to us, and we will do everything possible to prove that there are no grounds for such a move," CEZ's regional manager Petr Dokladal said in a statement. "We have always worked in line with the laws and regulations and will continue to do so."

Bulgaria's energy regulator launched a process to strip CEZ of its licence on February 21, accusing it of evading public procurement law among other malpractices. The move was a response to widespread protests across Bulgaria demanding the government re-nationalise power distributors owned by CEZ, Czech firm Energo-Pro and Austria's EVN, because of high electricity bills. The scale of the protests forced the centre-right government of Boyko Borisov to resign last week, and continued on February 24.

The Bulgarian regulator has given CEZ a week to comment on the process, and indicated there was room for compromise if the company could prove the malpractices could be repaired. It will not rule on the licences before April 16.

Bulgaria still has one of the lowest electricity prices for households in the 27-member EU, despite a 13% increase in prices last July. But with average monthly salaries of just €400, and pensions around €100, electricity costs - especially during the winter - have proved unbearable for many.

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