New changes to the Bulgarian Energy Act

On 23 January 2018, the Bulgarian Ministry of Energy launched a public consultation for an amendment of the Energy Act.

As part of this consultation, statements can be submitted by 21 February 2018. The bill will then be updated by the government, and submitted to Parliament for voting.

The Ministry of Energy is amending the act in response to two infringement procedures by the European Commission against Bulgaria. In 2016, the EC requested that Bulgaria fully implement the electricity and gas directives of the EU-mandated Third Energy Package.

In its press release of 25 January 2018, the EC stated: “Bulgaria has incorrectly transposed several unbundling requirements concerning the ownership unbundling model, the independent transmission operator unbundling model and the distribution system operator.”

The statement went on that Bulgaria “has not correctly transposed the rules on connection to the network by allowing the gas transmission system operator to refuse connection on the basis of lack of system capacity.”

The other infringement from 2017 relates to Bulgaria’s delay to transpose fully European rules on the deployment of alternative fuels, contained in Directive 2014/94/EU.

By virtue of the amended act, the Ministry of Energy intends to regulate the powers of the Bulgarian Energy and Water Regulatory Commission according to REMIT, a 2011 EU regulation aimed at promoting market integrity and transparency. The amended Energy Act will directly reference REMIT, and level financial sanctions for breaches of this regulation.

These sanctions, however, may lack sufficient bite to ensure adherence. Proposed sanctions for individuals range from EUR 760 to EUR 7,670 per infringement, and for companies from EUR 10,200 to EUR 76,700. A subsequent breach of REMIT will triple the initially imposed sanction.

This is the third proposed change to the Energy Act during the past two months.

For more information, please contact Kostadin Sirleshtov and Angel Bangachev.