Bulgaria is expected to see household electricity and heating prices increase by one or two per cent as of July 1. This was announced on May 28 by State Energy and Water Regulatory Commision (SEWRC) chairman, Konstantin Shushulov.

Domestic power producers have requested an increase in the electricity tariff, citing higher coal prices, increases in natural gas prices, and the closure of units 3 and 4 of Kozloduy nuclear power plant.

On May 29, at a closed-door meeting, the regulator was to determine by exactly how much prices would be raised. Shushulov said it would not be by more than two per cent for end-users.

The regulator will not approve a sharp tariff increase and will try to influence state-owned mining companies through the Economy Ministry, Shushulov said, as quoted by Dnevnik daily. The regulator cannot, however, interfere in determining pricing by private mining companies. Shushulov said that power producers would be required to certify the increase in the coal purchase costs.

Household heating tariffs in Sofia and Plovdiv will not rise from July 1 because the heating utilities failed to announce their new price tables as required by the pricing regulations. The SEWRC will make sure that the price adjustment, if any, is minimal, said Shushulov. At the same time there is also no indication yet that there will be an increase in domestic natural gas prices, Dnevnik said.

Moreover, Shushulov announced that the electricity market in Bulgaria will be liberalised completely from July 1. However, this will be only for industrial power consumers. The liberalisation of the market will allow corporate clients to switch suppliers if they are not satisfied with the quality of their current provider’s services. However, it has not been resolved how to separate out small companies, who use low currency electricity at household tariffs, from ordinary households.

According to Lubos Pavlas, regional manager of CEZ for Bulgaria, it is not clear how exactly the market will be fully liberalised. The adoption of statutory regulations for the sale of electricity is still being delayed, according to Pavlas. Even though the electricity market was partially liberalised at the beginning of 2007, so far very few corporate clients have taken advantage of their right to switch suppliers. This may be due to the low prices of electricity on the regulated market, Pari daily said. According to experts, corporate clients would benefit from a switch to the liberalised market only if regulated electricity prices increase by between five and 10 per cent.

Shushulov said that despite the increase, electricity and heating prices for household consumers in Bulgaria would remain two times less than that in other EU countries. What he failed to mention, however, was that the salaries in Bulgaria are still much less than half those in most other EU member states.

On May 28 part of the consumer benefits envisaged by the new business plan by Sofia’s heating utility Toplofikatsia were announced. The plan was discussed with municipal councillors.

A five per cent discount of the heating bill will be given if every apartment in a residencial block pays their bill on time. Another key idea is to annul any interest should consumers pay the entire sum owed in one go.

Toplofikatsia also boasted a recent increase in trust by heating consumers. The company’s new executive director Petko Milevski said his observations are based on the 6000 subscription applications that the company has recently received.

Milevski warned that if the SEWRC does not approve the heating prices rise of 13 per cent, and if the envisaged discounts for heating consumers are not accepted, the company’s losses would come to 40 million leva, up from 10 million in 2006. Nonetheless, despite the significant losses, Milevski said that nine million leva would be spent on renovating the heating utility in 2007. Altogether 50 million leva is expected to be spent on the improvements.