Two of the three electricity providers in Bulgaria have plans to decrease the number of their staff, Bulgarian news agency BTA said on August 22 2008.

The Bulgarian subsidiary of Germany's E.ON that provides electricity to north-eastern Bulgaria has plans to dismiss between 150 and 170 of its employees, the company told BTA.

EVN Bulgaria, a subsidiary of Austrian EVN AG, that services south-eastern Bulgaria, also has plans to lower the number of its staff but did not say how many people it would make redundant.

The third electricity distribution firm, CEZ Bulgaria, covering western Bulgaria, did not say whether it had plans to cut down the number of its staff, BTA said.

The reasons for the cuts, according to E.ON Bulgaria, was the State Energy and Water Regulatory Commission's (SEWRC) unwillingness to raise the price of electricity to the levels expected by the three providers.

E.ON Bulgaria's analysis showed that there was a potential for optimising the number of its staff without negative consequences for subscribers. 

As of July 1, the price of electricity was raised to 15.71 leva a MWh for CEZ Bulgaria, 15.93 leva a MWh for EVN and 18.94 leva a MWh for E.ON Bulgaria.

"SEWRC's decision is a great financial burden on the company's expenses, which forces us to rationalise our activities and thus improving our effectiveness” E.ON Bulgaria said in its statement sent to BTA.

A GPS system will be launched which will further optimise the maintenance of the company's network, the statement also said. Employees who decide to leave the company on their own will be offered between six and 14 monthly salaries.

EVN will have a similar to E.ON Bulgaria's policy in cutting down the number of its staff, although the number is not clear yet, but SEWRC was blamed as the main reason for the move.
Again the company said that the dismissals will not affect the quality of the service.

Electricity prices went up by an average of 14 per cent on July 1, which the power distribution companies considered not enough. At the time, E.ON Bulgaria said it did not agree with the way that the energy regulator shared out the price increase among the companies in the electricity production, transmission, distribution and supply segments.
 
As previously reported E.ON Bulgaria's managing board chairperson Manfred Paasch said that E.ON would keep only one percentage point of the end-user price hike. E.ON said it did not want a further price increase, only fair sharing out of the revenues between the three types of participants at the market, so that each of them received one third of the planned electricity price increase.

In the current situation, the electricity producers would receive around one fifth of the revenue generated by the price increase, while the state-owned National Electricity Company (NEK) would get nearly three quarters of the extra revenue, Paasch said. Such allocation in favour of NEK showed that the market participants were not treated equally, he said.

Currently, as the price increase is not distributed equally among the companies on the energy market, E.ON would not be able to cover its investment commitments toward maintenance and improving the quality of services it offers, while operational costs would decrease by 80 million leva, Paasch said.