Position on Energy Law Amendments, dated Dec. 16, 2020

The Board of Directors of the American Chamber of Commerce in Bulgaria raises its concerns with regard the proposed changes of the Energy Law, introduced by the honorable Member of the Parliament Mr. Ramadan Atalay on December 16th, 2020. It was sent to the Parliament of Bulgaria, to the Energy Commission Chair Mr. Valentin Nikolov on January 15th, 2021.

Initiated as part of the needed improvements of the Energy Law to meet the next phase of the liberalization of the wholesale electricity sector of Bulgaria, these proposals, if approved, would bring a lot of damage to the energy system of the country, its main producers, to the end consumers, and – moreover – to the investment reputation of Bulgaria before international partners and lenders.

AmCham Arguments:

  • Introduction of significant legislative changes to a complex system such as the Electricity sector in Bulgaria in the period between two of the votings at the Parliament, raises questions why such an approach does not follow more public and transparent process with consultations and coordination with all involved stakeholders.

  • Legislative proposal that comes less than three months before the end of the mandate of the current Parliament and just a day before the Christmas holidays, cannot bring any positive improvement of the energy system. On the contrary, it can only bring more tension to all stakeholders. It is even offending for the energy producers that are still carrying – like many other businesses in the country – the burden of the pandemic and to keep the economy running by securing power generation and supply to households and businesses, as well as to continue with their social investments on a regional and national levels.
  • In its substance the proposed changes do not have a solid argumentation “Why they are introduced?”, nor any holistic analysis of the consequences of the changes in power. These changes do not have any impact assessment. Such an approach undermines the trust of the citizens and business to the supreme authority in Bulgaria – The Parliament.
  • Such a proposal does not reflect of the potential risk for lack of power supply to major stakeholders in the country in a year in which we all hope will bring economic relief and growth.
  • The proposed changes create uncertainty regarding the ability of the National Electricity Company (NEK) to fulfill its obligations under fully valid long-term Power Purchase Agreements with power generators with total capacity of more than 1,500 MW and securing 1,000 jobs and other at least 12,000 – 28,000 in their supply chain represent the most modern and environmentally compliant conventional power stations in the Southeast Europe. Their Power Purchase Agreements were introduced to secure the supply of electricity of Bulgaria through renewal of its generation fleet in full compliance with the European environment requirements for combustion installations.
  • The proposed full liberalization of the energy market for households implies the existence of a well-regulated and well-functioning IBEX, which, unfortunately, is not yet de facto in place.
  • Last but not least, we consider that the proposed changes, in their current wording and time frame, would not contribute to the investment environment in Bulgaria.

The position of the American Chamber of Commerce in Bulgaria is that these proposal of the honorable Member of the Parliament Mr. Ramadan Atalay should not be approved, nor the current Parliament and the Ministry of Energy should introduce any changes of the Energy system of Bulgaria without transparent, timewise, and constructive discussion with all stakeholders.

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