On 31 Jan 2020 an inaugural press conference was held at the Energy and Water Regulatory Commission on the occasion of launching the activities under Project BG05SFOP001-2.012-0001 “Enhancing the analytical capacity of the Energy and Water Regulatory Commission”. The Project is financed under procedure BG05SFOP001-2.012 by the Operational Programme “Good Governance”, co-financed by the European Union through the European Social Fund. EWRC is the project beneficiary and the Project is being fulfilled by the European Bank for Reconstruction and Development (EBRD). The total funds of the Project are 1 300 000 BGN, of which 1 105 000 BGN present a grand from the European Social Fund and the rest 195 000 BGN – national co-financing. The Project duration is 18 months and project leaders are Mrs. Svetla Todorova, EWRC member and Mrs. Vesselina Haralampieva from EBRD.
In the inaugural press conference presenting the Project, participants included EWRC members Ms. Svetla Todorova and Ms. Evgenia Haritonova; EWRC experts; the Director of EBRD Bulgaria, Ms. Anca Ionescu and Svetlin Pislenski from EBRD office; the project international consultant Dr. George Vlondakis from EXERGIA; and the consultants Kremena Stoyanova, Dilyana Ivanova and Iveta Ivanova.
Official guests at the press conference were Ms. Denitsa Kirova, Secretary General of Financial Supervision Commission (FSC) and FSC experts; Ms. Veneta Tsvetkova, Director Energy projects and international cooperation at the Ministry of Energy; and Ms. Elita Popova, chief expert in Good Governance Division at the Council of Ministers.
Mass media representatives attended the press conference too.
Opening the press conference, the Project leader Ms. Svetla Todorova emphasized that the current Project is a continuation of its Phase I, funded by the European Bank for Reconstruction and Development, when among other activities, EWRC has received consultancy assistance in two very important areas: drafting proposals for amendments to the Energy Act concerning the EWRC tasks and powers in implementing REMIT Regulation and liberalization of the market and gradual phase out of regulated prices for household customers by gradually including a certain share of electricity purchased at market prices. The main objective of the current Project is to enhance the analytical and technical capacity of the Regulator and to improve the price regulation and electricity market efficiency, in particular the efficiency of the electricity network companies and the quality of the network services they provide.
In her welcoming address to the Project participants, EBRD Director for Bulgaria Ms. Anca Ionescu said that EBRD as a financial institution supports the implementation of projects to improve regulatory activity, as this plays an important role in the process of the electricity market liberalization in Bulgaria and for the Bulgarian energy services consumers.
The international Project consultant Dr. George Vlondakis from EXERGIA presented in his presentation to the participants in the press conference the Project’s goals and scope. The legal tasks section includes the regulatory provisions related to the Energy Act requirements with respect to Regulation (EU) No 1227/2011 (REMIT), as well as the internal implementation rules for EWRC staff. It was explained that REMIT aimed at ensuring the transparency of electricity market operation, in particular on the power exchange, and in cases of market abuses the latter should be classified and the risk of violations should be eliminated in order to avoid distortion of the electricity market. In his views, some rules were stipulated in the Energy Act provisions, but changes in the by-laws needed to be introduced as well. He reminded that electricity transmission and distribution companies are an important part of the distribution system, and that they are natural monopolies, but that their activities must be harmonized and unified by EWRC. In this regard, Dr. Vlondakis informed that the Project activities envisage the drafting of legal amendments in order to unify the practices of the companies, for example under Ordinance No. 3 of 21.03.2013 on licensing the activities in the energy sector. Another important aspect of the Project is the drafting and implementation of rules on the cooperation between EWRC, CPC and FSC, as well as on joint actions between the energy Regulator and the Ministry of Interior in connection with the implementation of investigation activities in case of signals for violations of the electricity market. Internal rules are also to be developed for EWRC experts in investigating possible market abuse and violations. In presenting the technical tasks of the Project, Dr. George Vlondakis outlined the need to develop rules on single regulatory reporting of DSOs in line with EU practices, getting to know the EU practices for the assessment of companies' capital and operating costs, for the electricity quality regulation and setting quality targets for the territory served by each DSO. He highlighted, in particular, the establishment of a mechanism / methodology / for binding TSO’s regulatory revenue with efficiency and quality indicators and setting standards to encourage electricity distribution companies to develop their networks. This requires the creation of an appropriate framework allowing companies to recover their distribution costs.
In conclusion, Dr. Vlondakis outlined the planned training activities on building the analytical capacity of EWRC experts in fulfilling the energy regulator’s powers under REMIT. The Project leader, Ms. Svetla Todorova, informed that regarding REMIT implementation there is a legal framework with responsibilities of the Regulator for investigating abuses and imposing sanctions. EWRC works in this direction and several experts with the necessary competences have already been appointed and the activity will be expanded. At the same time, she stressed that such investigations are not easy, as they affect companies with significant resources. It was pointed out that most regulators in EU countries carry out investigations on violations and, if justifiable data were to be collected, the results of investigations are communicated to the competent state authorities.
Participants in the press conference answered questions from the attending journalists concerning the development of criteria for the assessment of electricity trade violations, the possibility of applying the REMIT regulation to natural gas transactions in the free market, etc.
The conference guests were provided with brief informational material, with a link to EWRC website, which provides information on the Project.
The press conference presenting the Project “Enhancing the analytical capacity of the Energy and Water Regulatory Commission” was broadcasted online on the Regulator's website.