The State started a crusade against the electricity distribution companies. Prime Minister Boyko Borisov orderes all institutions to check the companies and the regulator. Prosecutors did self-referral after complaints of dissatisfied citizens and media publications and also ordered an urgent review. Public Prosecutions will monitor the legality of acts and activities of the State Energy and Water Regulatory Commission as a specialized supervisory authority under the Energy Act and related regulations. Energy Minister Delian Dobrev said that the method of pricing has to be reviewed. That does not only apply to EDCs, but to all the companies in the chain, which determines the tariff of electricity to the end user. He was annoyed by the fact that currently the price includes TPPs with expensive electricity and it is not clear why they are there. Besides the American plants AES Galabovo and ContourGlobal Maritsa East 3, are included the relatively expensive TPPs Bobov Dol, Brikel and Maritza 3 Dimitrovgrad ( all owned by Hristo Kovachki).
Source: Standart (14.02.2013)

TPPs stop because of the excessive sun and lower exports of electricity. Electricity System Operator (ESO) ordered the suspension of Units 3, 4 and 5 in Maritza East 2, and the second unit in TPP AES - Galabovo (formerly Maritza East 1) and two of 4 units at TPP ContourGlobal Maritsa East 3. This is due to the extremely low power exports, which fell because of the warm weather across Europe. Exports on March 3 was 130 MW at 950 MW on the same day last year. The energy system faces lack of control, said Mitiu Hristozov, Director Central Dispatch at ESO. In his words, because of the wind and solar plants, as well as for low power consumption, thermal power plants have shut down or production has been restricted to a minimum. In recent days, the consumption of electricity in the country is about 3,600 MW during the day. Domestic consumption has dropped by 1,200 MW from March 3, 2012.
Source: Standart (04.03.2013)

At an extraordinary sitting of the Consultative Council with the outgoing Energy Minister Delyan Dobrev on Monday, the minister ordered the Electricity System Operator (ESO) to take advantage of its right to limit renewable energy production whenever the electricity distribution network is endangered. The Council ordered for the country’s cold reserve to be reduced by 200 MW as of 1 April in order to lower the losses of the ESO, that is in a very deteriorated financial state. The head of the Bulgarian Energy Holding Mihail Andonov explained that the reduction will be made at the expense of the cold reserve of TPP Varna (owned by CEZ) and TPP Maritsa – Iztok 2. Meanwhile, it transpired that as of 5.30 p.m. on Tuesday there are new electricity prices in Bulgaria. CEZ clients now pay an average 7.17% less. The Bulgarian Energy Holding (BEH) and the Economy Ministry have begun negotiations with the two US owners of TPPs operating in Bulgaria - AES and Contour Global, regarding an electricity price reduction, the BEH Executive Director Mihail Andonov announced Tuesday. In his words, the two TPPs are willing to make discounts, but require guarantees that the next government will not ask for a further drop of prices, the Trud daily writes. The three power utilities will conduct an extraordinary report on the measurements of electric meters in relation to the average 7% electricity price cut as of 5 March. The companies will accept data on power consumption provided by clients. CEZ set a deadline until 11 March, EVN – until 8 March.
Source: Standart (06.03.2013)

Dobrev: American investments in TPPs are secured by pledge of NEK Long-term contracts for the purchase of electricity from two private TPP - ContourGlobal Maritsa East 3 and AES Maritsa Iztok 1 are secured by pledges of the National Electricity Company (NEK). This was announced by Minister of Economy and Energy resignation of the Delian Dobrev. Speaking to reporters, he showed concluding contracts of these bets were signed in 2002 and 2005 by the former CEO of NEK Lyubomir Velkov. According to Dobrev, it is strange from a moral point of view that once the NEK has signed long-term contracts for the purchase of energy from both plants, then gave a guarantee of compliance. He said the removal of this information in his last day as a minister with the fact that only just found out about this market.
Source: Capital (12.03.2013)

More Reserves for Cheap Electricity After Protests New funds for reducing the price of electricity were found after the start of the protests when the Ministry of Economy has begun talks with two U.S. companies holding Maritza East. "AES Galabovo" reacted negatively, saying that they have a long term contract, Standart learned. "KonturGlobal" however, were more cooperative and have agreed to make some concessions. During the talks, it was agreed that one of four units of the TPP should stop supplying electricity to the regulated market. Thus, 25% of the expensive electricity of the plant would be replaced with cheaper energy, bringing down the consumer prices by 7% after March 5. The resignation of the government, however, has had a bad effect on the agreement and "KonturGlobal" said they will not sign such a document with cabinet in resignation. Accordingly, they will hardly do so with an interim government. The only remaining option is that they would sign with the next regular cabinet.
Source: Standart (14.03.2013)

Unions of Maritsa-Iztok want a meeting with Economy Minister Trade unions in Maritsa Iztok insist on meeting with the new Minister of Economy Assen Vassilev and representatives of the State Energy and Water Regulatory Commission regarding the crisis in the mines caused by the reduced workload of the TPPs. Currently in Maritsa-Iztok work 20% of the installed capacity, said Gencho Genchev, chairman of the trade union at Confederation of Labor - Podkrepa in the enterprise. In this regard, it was decided to optimize cost and mode of operation for March and April, as part of the miners go on vacation and otherñ go to two shifts instead of four, said Genchev. He expressed concern that if the complex continues to operate at 20% of its capacity, it would be fatal for the energy sector in Bulgaria. Miners push for the energy regulator to submit to the interim government a proposal to reduce or completely eliminate the transfer charge, which increases the cost of electricity.
Source: investor.bg (18.03.2013)

Bulgaria's National Electric Company, has committed a number of breaches, mostly related to the production of excessive quantities of electric power, the prosecution probe has concluded. The probe of the National Electric Company, NEK, the State Commission for Energy and Water Regulation, DKEVR, and the three power distributors – CEZ, EVN, and Energo-Pro was launched in the aftermath of mass protests in the country against high utility bills that turned to civil unrest and led to the resignation of Prime Minister, Boyko Borisov, and the Cabinet of his Citizens for European Development of Bulgaria party, GERB. Prosecutor, Borislav Dzambazov, stated at an emergency press conference Wednesday that NEK had improperly committed to purchase 100% of the produced electric power regardless of the market demand. According to the prosecutor, there is evidence senior NEK employees have acted in premeditation in contracting unfavorable clauses, something that would require a pre-trail proceedings.
Source: Standart (04.04.2013)

Standard&Poor's Ratings Services (S&P) affirmed its BB- long-term corporate credit rating on Bulgaria-based power utility Natsionalna Elektricheska Kompania EAD (NEK), the agency said on Friday. “At the same time, we removed the rating from CreditWatch, where it was placed with negative implications on Dec. 20, 2012. The outlook on NEK is negative,” the rating agency said in a statement. S&P also said in the statement: “The affirmation reflects our view that NEK's immediate refinancing risk has been eliminated following the refinancing of its ˆ195 million syndicated loan, which matured in May 2013. We understand that NEK's parent company, BEH, provided NEK with proceeds from a ˆ250 million bridge loan as an intragroup loan to repay the syndicated loan. We understand that BEH plans to refinance the bridge loan with a public bond issue at the BEH level. Furthermore, NEK sold its stake in the monopoly system operator ESO EAD to BEH, using the funds for the settlement of intragroup loans other than that NEK has just received from BEH. We understand that NEK will transfer three project-related credit facilities with total outstanding principal of ˆ50.8 million (at May 31, 2013) to ESO as part of the transaction. These actions will result in a material reduction in NEK's external financial bligations, which we forecast at about Bulgarian lev (BGN) 215 million at year-end 2013 (BGN734.0 million at year-end 2012). We understand that NEK's tariffs for the next regulatory period starting July 1, 2013, are still under negotiation. We are uncertain as to whether the new tariffs will reflect the continuing increase in costs for green energy and other electricity system costs in a full and timely manner. Moreover, the tariff review is to be completed in the context of recent changes in the Bulgarian government and regulator. This uncertainty weighs on our assessment of NEK's business risk profile. These factors, in combination with a contraction in domestic and export demand, resulted in NEK reporting a consolidated loss of BGN192.4 million in 2012. Our base-case scenario for 2013 factors in BGN120,000 of compensation for under-recovered costs over 12 months. We also deconsolidate the contribution of ESO from the second half of the year. Based on NEK's tariff application for the next regulatory period, we anticipate that NEK's Standard & Poor's-adjusted funds from operations (FFO) to debt will exceed 15% in 2013. In our forecast, we treat the intragroup loan from BEH as debt because it is funded by a short-term bridge loan on BEH's balance sheet, and has a short maturity and a lack of flexible terms. Nevertheless, we recognize that it is provided by what we consider to be a supportive strategic owner. We apply our criteria for rating parents and their subsidiaries to NEK and add two notches of parental support to NEK's stand-alone credit profile (SACP) of 'b'. The uplift reflects BEH's stronger credit quality than that of NEK due to BEH's stronger business risk position and cash flow generation, as well as its positive discretionary cash flows and significant cash holdings. Our assessment of NEK's 'b' SACP is based on our view of the company's "highly leveraged" financial risk profile under our criteria, which in our opinion mainly reflects its "less-than-adequate" liquidity position and aggressive financial policies. We assess NEK's business risk profile as "weak." This reflects the company's meager profitability and regulatory uncertainty owing to annual tariff resets by Bulgaria's State Energy and Water Regulatory Commission. Our assessment of NEK's business risk profile also factors in the legal unbundling of ESO, NEK's lowest-risk operations, and the uncertainty related to the Belene nuclear power plant project, which we understand is on hold. The negative outlook reflects our uncertainty as to whether NEK's electricity tariffs for the next regulatory period will cover the ongoing increase in electricity system costs. Full and timely pass-through of costs and a fair return on assets will be important for NEK to maintain its current business risk profile and, ultimately, the ratings. We could lower the rating if NEK is not able to achieve adjusted FFO to debt exceeding 12% on a sustainable basis, which we see as commensurate with its SACP of 'b'. In accordance with our criteria for rating parents and their subsidiaries, a downward revision of NEK's SACP by one notch would result in us lowering the long-term corporate credit rating on NEK to the same extent (as long as we assess BEH's credit quality as unchanged). In addition, any evidence of a weakening of the link between BEH and NEK could cause us to revise our approach of factoring in parent support to the SACP. We could revise the outlook to stable if we believe that NEK's financial risk profile has improved to "aggressive" from "highly leveraged" following a decision on tariffs in the next regulatory period and the unbundling of ESO. In particular, this will depend on NEK's ability to reach and maintain adjusted FFO to debt of more than 12% on a sustainable basis, alongside more conservative liquidity management.”
Source: Class (01.07.2013)

Miners threaten with uprising Valtchev Valentin, president of the Federation of Independent Trade Unions of the Miners predicted an even more memorable miners' revolt compared to the current political protests. The mine where the tragedy of yesterday occured, employs 270 workers for an average salary of BGN 400-BGN 500. However, due to the problems of Bobov Dol power plant, some of the nearby mines are in liquidation. The situation is becoming tense and if they do not see an improvement in their situation, soon the miners will have to do something to protect their jobs. If this happens, the current political protests will pale as compared to the uprising of the miners. The financial difficulties of the Oranovo mine are the most probable cause behind the lack of satisfactory health and safety requirements which may have led to the accident that killed two miners and left two others buried. The conditions in the mining industry are difficult and cash flows from the Bobov Dol plant are not regular. Nevertheless, after some incredible attempts from both the owner and the employees, some of the late payments for the miners in Oranovo were carried out a few days ago and as a result so far there are no delayed salaries in the facility. The miners in Oranovo complain about the delays in their salaries, some pressing insurance problems and their work under very stringent conditions of supervision. According to them, they receive about BGN 480 salary, but the money is typically delayed by 2-3 months. People say that they are exploited, but nobody dares to give his name to the objection, as this is their only livelihood and they are afraid of losing their job. Workers told that they have to work with old helmets and ropes, some of which are cracked. The conditions are becoming more critical, but their children have to eat so they do not have a choice, they say. Their wives also complained that their husbands work Saturdays and Sundays, but no one pays them overtime. The Oranovo mine is officially managed by Pirin Oranovo Ltd., managed by Valerie Manov. The company is represented by Pernik Balkan MC, which is owned by businessman Krasimir Hristov and is a shareholder in Energy 2004, where Ivan Simeonov and Stefcho Stoynev are also members of the board. The owners refused to comment about the current situation, but they will be subject to a full check by the Labour Inspectorate. Energy mogul Hristo Kovachky is also said to be related to the mine, the workers claim that he was actively purchasing the coal for his power plants. Nobody knows how exactly the tragedy happened 300 meters below the ground. Besides killing two miners, it wounded two of their co-workers. Two employees of the Oranovo mine are still buried (editor's notice: until yesterday 6 pm). The accident was caused by a breakthrough of rock, water and mud which have flooded the mine. Presumably, there was neither human intervention nor a technical error from the management and or the executive staff. Further details are expected to be revealed after a throughout inspection.
Source: Standart (18.07.2013)

BIA: Export prices of electricity should not be lower than those for domestic consumption Public Advisory Council to the regulator discussed changes in the electricity prices. In its statement one of business organizations - Bulgarian Industrial Association (BIA), says: "Bulgarian Industrial Association takes a position based on the following principles: 1. Axiomatic, export prices should not be lower than those for domestic consumption, because it makes the production of the Bulgarian companies uncompetitive; 2. Changes in pricing should not hamper the opportunities for reproduction of the participants in the electricity market, i.e. decrease of the electricity prices should not be at the expense of the necessary investment costs of the electricity companies; 3. The funds of the sale of CO2 allowances should be directed towards energy-efficient technologies in the industry and not to cover the price difference from production. You have to look long and not making time! 4. We need a radical reform in the sector. For this purpose, the country should buy the rights or property of "Maritsa Iztok" 1 and 3, as well as renewable energy sources with a raise target resource outside estimates of the country, and bring to the market conditions, the pricing of these proceedings."
Source: BIA (23.07.2013)

Electricity producres in Bulgaria are to be granted with better opportunities for export. From the 1st of August the new regulatory period is entering into force, while the tax for export is becoming EUR 6. This makes chances of TPP Maritsa iztok 2 and TPP Bobov dol to find a market abroad better. Talks for export are being held with Greece and Turkey. TPP Bobov dol may realize its products both on the regulated and free market.
Source: Monitor (30.07.2013)

Economy Minister: coal extraction dropped by 30.7% year-on-year in Q1 of 2013 Coal production in the country has decreased by 30.7% in the first quarter of 2013 compared to the same period of 2012, Minister of Economy and Energy Dragomir Stoynev stated during today's meeting of the Parliamentary Energy Committee. According Stoynev, the main problem faced by coal companies in Bulgaria is the limited demand for coal power plants. "This in turn is due to the limited consumption of electricity in the country and the limited energy exports," he said. A report on the energy situation presented by the Energy Minister shows that the total natural gas production in 2012 amounted to 350 million cubic meters, which is 12% less than the volume in 2011. The minister also noted that with the new pricing model introduced in the amendments to the Energy Act will meet consumer expectations. Thanks to this new model, which takes effect from 1 August, exports of electricity, including green and brown energy, will be free of additives in their transmission price. In a previous meeting today, trade unions have expressed their concerns that the mines in southwestern Bulgaria will be closed and there will be a cut in the number of the miners. Meanwhile, it became clear that the Parliamentary Energy Committee has asked Dragomir Stoynev to present a detailed analysis of the energy sector. This study should be prepared and presented to the National Assembly within three months, the energy committee ruled. Within six months, the Minister of Economy and Energy must demonstrate a solid strategy" the head of the committee stated.
Source: Standart (31.07.2013)

TPP Varna is likely to be finally made environmentally friendly, after three of its blocks are stopped. This is the only way the rest three operative blocks to function even after 2015. Public tender for offers became availbale last week. Still atmosphere in the company is not hopeful. Its quota of the regulated market is heavily truncated (approximately one month working at full power), and the company’s management keeps on repeating that actually TPP Varna makes a loss from the sale of electricity. Losses were covered by payments for winter reserves, which are bought by the Elektroenergien Sistemen Operator from the mids of the year at relatively lower prices. If the modernization fails the company might be forced to close. Bulgaria is obliged to bring all the power plants in accordance with the European Directive 2001/80 for reduction of emissions of harmful gases such as sulfur and nitrogen oxides. The order, announced by TPP Varna is assessed at EUR 60 million and has a term for completion 29 months.
Source: Capital (05.08.2013)

TPPs begin urgent repairs 12 thermal power plants in the country have to make big investments in FGD installations and improving technologies to reduce atmospheric greenhouse gases. These are all large thermal power plants - Bobov Dol, Brikel, Maritza 3, Dimitrovgrad, state-owned Maritsa Iztok 2, AES Galabovo and ContourGlobal Maritsa East 3 and a few factory stations. Otherwise, Bulgaria is threatened to be condemned by the EU and to pay EU sanctions of tens of millions per month. There is an ongoing penalty proceeding against Bulgaria. It is in the phase of study before court, said the Minister of Environment and Water - Iskra Mihailova. After the regular meeting of the Council of Ministers, Mihailova presented the joint report of her Ministry and the Ministry of Economy containing measures to reduce emissions.
Source: Monitor (15.08.2013)

Siemens is to develop its energy company in Pravets Number of employees in Siemens’s factory in Bulgaria had increased five times since the company started production before seven years. Though it is the least popular activity of the German concern in the country at present the enterprise that is located in the building of the ex-computer factory in Pravets has about 300 employees. This is little over half of all people that the company’s subsidiary in Bulgaria employs. The investment in production is slightly over EUR 2 million. The factory in Pravets operates in the energy sector and produces high voltage measuring equipment, as in the last year it has accomplished over 14 thousand units of output. These are not end-products but components that are exported to France and Germany and are used for Siemens’s products. Production is used in power plants, substations and high voltage power lines. Siemens began production in Bulgaria in 2006, when the factory for isolation of active high voltage parts was opened in Botevgrad with personnel of 60 workers. In 2011 the factory is moved in the ex-computer factory in Pravets.
Source: Capital (04.11.2013)

BEH gives BGN 191 million for South Stream without explanation Bulgarian Energy Holding will deposit BGN 191 million for capital increase of project company South Stream. This is evident from the invitation for the company’s General meeting. The announced term is 16th of December. The same sum will be provided by Gazprom, too. Cited explanation is funding of the second part of the company’s investment program for 2013. If the increase is made South Stream’s capital will become nearly BGN 400 million. Construction had to start in December but competition for contractor was frozen. The reason is that some of the candidates complained of the too short term - only two weeks, which were given for submission of offers. The total value of the Bulgarian section of the pipeline is assessed to EUR 4.1 billion
Source: Capital (19.12.2013)