At the beginning of July 2013 the Competition Protection Commission launched a sector inquiry into the Bulgarian electricity market. The procedure was opened in 2010 as a sector inquiry into the natural gas transmission and supply markets. Further, at the beginning of 2013 the commission widened the inquiry to include the electricity market, following protests from citizens about high electricity prices.

Within the proceedings the commission contacted various competent authorities and requested information from the participants and end clients on the different markets.

According to the commission, the aim of the inquiry is to analyse the legal framework of the electricity sector and its application, as well as the structure and organisation of each level of the electricity distribution chain – production, transmission, distribution and supply. However, the analysis of the legal framework seems to be the main focus of the inquiry, as far as it pre-determines the structure of each market level.

On the basis of this analysis the commission identified the problems in the functioning and interrelation between the different levels of the distribution chain which affect competition.

The commission considered the quotation principle by purchase of electricity to stemfrom the following different sources:

  • long-term agreements for purchase of electricity at fixed prices from certain producers;
  • lack of stock exchange dealing; and
  • the high level of concentration of market power in one undertaking – Bulgarian Energy Holding.

In view of the transmission and distribution markets, the commission recommended that unrestricted and equal access to the transmission and distribution nets, as essential facilities, to be guaranteed. Further, effective separation between the undertakings which produce and supply electricity and those which transmit and distribute electricity was strongly recommended.

The commission identified the existing difficulties for clients changing electricity supplier as a serious issue on the electricity market and as a handicap to liberalisation. Further, as the undertaking which maintains the transmission net and end suppliers operates on the electricity supply market at regulated and non-regulated prices, the commission found that this requires further legal guarantees that this will not result in discrimination.

The commission initiated no antitrust proceedings based on its findings, but it has underlined that, at present there are several open proceedings which address the same issues. The inquiry was sent to the minister of economics and energy, as well as to the National Assembly for further action.

For further information on this topic please contact Ilko Stoyanov or Mariya Papazova at Advokatsko Druzhestvo Andreev Stoyanov & Tsekova in cooperation with Schönherr Rechtsanwälte GmbH by telephone (+359 2 933 1072), fax (+359 2 986 1105) or email (i.stoyanov@schoenherr.bg or m.papazova@schoenherr.bg).

This article was first published by the International Law Office, a premium online legal update service for major companies and law firms worldwide. Register for a free subscription.