Households will not enter the free electricity market this year, as initially foreseen in the law. This is now unlikely to happen next year or even the year after that because the members of the Parliament voted at first reading to postpone the liberalization of the electricity market for households by at least two years. Lawmakers approved two draft amendments to the Energy Act - one from BSP and one from TISP.
The first bill, proposed by BSP, calls for a two-year delay. The second, submitted by TISP, proposes a five-year postponement. During the vote, the pro-Kremlin party Vazrazhdane also submitted a proposal to delay the process by ten years, but their draft was rejected. The BSP's bill was adopted with 154 votes in favor, none against, and 35 abstentions, while that of TISP was passed with 157 votes in favor, one against, and 23 abstentions.
Ultimately, the deadline for postponing the entry of household consumers into the free electricity market will be determined between the two readings of the bills. Most likely, however, the members of parliament will settle on a compromise option - either four or eight years, similar to the length of parliamentary terms, to avoid concerns that a particular party's proposal is being favored. "Whether it's until 2029 or 2030, that's a reasonable timeframe we could indicate," commented Energy Minister Zhecho Stankov, who emphasized that the Ministry of Energy would agree to any date chosen by the National Assembly.
No fixed deadline after EC agreement
According to Stankov, Bulgaria has agreed with Brussels that the National Assembly should determine the deadline for market liberalization. The actual legislative change must be adopted by mid-May so that a clear decision is in place by July 1, when the current regulatory period expires.
"Perhaps the most important part of the renegotiation of the Recovery and Resilience Plan (RRP) is that we are protecting household consumers; they will not be exposed to the high prices of the free market. What we managed to agree with the European Commission is that there will be no fixed deadline for liberalizing the market; it is up to the National Assembly and the elected representatives to choose a date," Stankov summarized. He added that there would be no change for household consumers, "not even in the long term."
This marks a completely new development in the reform, as the transition to the free market had previously been cited as one of the key conditions for the subsequent (but ultimately unrealized) disbursements under the plan. Just about ten days ago, Deputy Prime Minister Tomislav Donchev stated that "liberalization is not an issue," hinting that further changes were expected.
Stankov also outlined the new operating model, although the details still need clarification. In short, the National Electricity Company (NEK) will no longer act as a public supplier whose prices are set by the Energy and Water Regulatory Commission (KEVR). Instead, state-owned electricity producers will provide an average price for their energy to the end suppliers of the households. At the same time, the financial stability of these end suppliers must be ensured to avoid disruptions in the system, the minister noted. Therefore, if compensation is needed, it will be provided through the Electricity System Security Fund.
Forever planned but not implemented
This is yet another postponement of the biggest energy sector reform in decades. In practice, it affects about one-third of Bulgaria's electricity market and millions of household consumers, who will continue to receive electricity at state-regulated prices even when those prices are, at times, significantly higher than market rates.
Discussions about wholesale and, subsequently, retail liberalization have been ongoing for more than 10 years, but so far, nothing has happened. The only real progress came in 2020, when non-household consumers - i.e., businesses - were required to move to the free market or to the so-called supplier of last resort, in case they did not choose an electricity provider.
Household consumers, however, can currently switch to the free market voluntarily, with the option of returning to the regulated market as early as the following month. Still, very few have chosen this option. Under a fully liberalized market, such back-and-forth migration will no longer be possible.
Households will not enter the free electricity market this year, as initially foreseen in the law. This is now unlikely to happen next year or even the year after that because the members of the Parliament voted at first reading to postpone the liberalization of the electricity market for households by at least two years. Lawmakers approved two draft amendments to the Energy Act - one from BSP and one from TISP.
The first bill, proposed by BSP, calls for a two-year delay. The second, submitted by TISP, proposes a five-year postponement. During the vote, the pro-Kremlin party Vazrazhdane also submitted a proposal to delay the process by ten years, but their draft was rejected. The BSP's bill was adopted with 154 votes in favor, none against, and 35 abstentions, while that of TISP was passed with 157 votes in favor, one against, and 23 abstentions.
