Sofia, December 16 (BTA) - The National Assembly voted 132-4, with two abstentions, to freeze the prices of electricity, heat, and water and sewerage services on the regulated market at their level on December 16, 2021, until March 31, 2022. This move was backed by the government coalition (Continue the Change, BSP for Bulgaria, There Is Such a People and Democratic Bulgaria) and Vazrazhdane. Three MPs of GERB-UDF and one of There Is Such a People voted against, and two of Democratic Bulgaria abstained. The Movement for Rights and Freedoms (MRF) did not take part in the vote.

The MPs defeated a motion by Delyan Dobrev (GERB-UDF) to exclude the setting of a projected market price for RES electricity from the moratorium. Parliament also rejected a proposal by Angel Georgiev (Vazrazhdane) that the moratorium be in force until April 30, 2022. Another proposal that was rejected came from Ramadan Atalay (MRF), who argued that a price freeze posed a risk to the energy system and urged Parliament to repeal Wednesday's resolution imposing the moratorium.

At Wednesday's plenary sitting, the majority enthusiastically embraced the idea for the moratorium on prices at their January 1, 2021 level, but this proved impossible because electricity prices were last changed on July 1 and the January 1, 2021 prices were no longer valid. Also, the resolution did not set a time limit for the moratorium. That is why the parliamentary Ad Hoc Committee on Energy Issues, set up in the morning on a motion by Continue the Change, had to meet three hours after its establishment to sort out this issue and after an hours-long debate set a timeframe for the moratorium: from December 16, 2021 to March 31, 2022.

Lena Borislavova, Prime Minister Kiril Petkov's Chef de Cabinet, told reporters the government is planning to use the time until the end of March to get the price of electricity under control in the long term. "We are not planning a shock price rise of electricity after March. This is not in the interest of any of the stakeholders," she said.

She said the government is planning to hold urgent discussions with experts on measures aimed to reduce or at least stabilize the price of electricity so as not to harm the interests of one player in the system while benefiting another.

Borislavova said the moratorium does not breach the European directives. It is a temporary measure, meaning that a price rise can be deferred until the government takes specific measures to stabilize the surge in the electricity price.

Reactions

GERB-UDF urged Prime Minister Kiril Petkov and Energy Minister Alexander Nikolov to explain in Parliament "the lobbyist texts" which, according to the parliamentary group, were adopted as part of the moratorium on Thursday. Speaking at a briefing, Toma Bikov reiterated a proposal made by GERB-UDF during the debate that the Energy and Water Regulatory Commission should put an end to the "excessive profit" of RES electricity production in the form of "a direct government subsidy in the range of 100 to 400 leva, which will total 250 million leva until July 2023". "The government majority voted for 250 million leva to be paid to those who are benefiting from this energy crisis," said Bikov, adding that there are MPs who "work in that sector".

MRF Chairman Mustafa Karadayi said Parliament's resolution violated the Constitution and pandered to RES lobbyist interests. He told a briefing the surge in electricity prices on the free and regulated markets should be tackled by legal means. Asked to comment on the moratorium, Karadayi said any steps, including an appeal to the Constitutional Court, could be taken.

Martin Vladimirov, Energy and Climate Program Director at the Center for the Study of Democracy, told BTA that the moratorium on utility prices interfered in the functioning of the energy market and that it would have grave implications for the finances of numerous energy companies. He said that first and foremost, the electricity distribution companies were put at risk of bankruptcy. Second, the resolution interferes in the operation of the independent energy and water regulator. Vladimirov said the European Commission could sanction Bulgaria for this decision. After March 2022, the regulator will have to increase prices much more to offset previous losses. "The problem will only be put on the back burner," the expert said.

Hristo Kazandjiev of the Bulgarian Energy and Mining Forum said the problem could be solved along the lines of lower VAT, excise duty waiver or lower contributions to the Energy Security Fund.

Energy expert Vasko Nachev said the moratorium could lead to chaos in the energy sector and to uncertainty whether the electricity distribution companies and all other players can cope until the end of March. LG/DD