New regulations to the prices of natural gas in Bulgaria are on the way

Bulgaria

The Energy and Water Regulatory Commission (EWRC) has published draft amendments to the Ordinance for regulation of the prices of natural gas for public discussions that began on October 24.

The amendments are based on recent changes to the Energy Act, which limits the number of individuals who are able to purchase natural gas from a public supplier at regulated prices.

The amendments are intended to do the following:

  • clarify and supplement the provisions for calculating natural gas prices; and
  • ensure fair distribution of the supplier's expenses among all of its clients, regardless of whether they buy natural gas on the regulated market or at freely negotiated prices.

The amendments suggest a new mechanism for calculating the estimated quantities of natural gas used by the EWRC when determining expenses and arriving at prices for companies.

The new formula for companies with a license for public delivery of natural gas is based on quantities:

  • ordered by end suppliers and by parties with licenses for producing and transferring thermal energy;
  • for sale on the organised market; and
  • under bilateral contracts.

Amendments also suggest that the prices under which the public supplier sells natural gas to end suppliers and the holders of license for production and transfer of thermal energy shall be formed based on the last subscribed prognosis quantities in energy units and the expenses for their delivery from import for the internal market, local production companies, reserves of natural gas and a component for the activity “public supply”. The public supplier shall estimate the quantities of natural gas for supply for the next term in energy units based on the last stated estimated quantities for delivery by end suppliers and holders of license for production and transfer of thermal energy. If there are joint expenses for public supply of natural gas, for performance of the program for release of natural gas and for delivery of natural gas under bilateral contract, these expenses shall be distributed proportionately to the quantities of natural gas for the respective activity.

The changes to the prices of the natural gas need to be effective before the beginning of the new year and this is why the procedures for public consultation and adoption of the ordinance are shortened.

For more information on these amendments and opportunities in the Bulgarian natural gas industry, contact your usual CMS source or one of the following local CMS experts: Kostadin Sirleshtov and Denitsa Dudevska. The article is co-authored by Zornitsa Stoykova, a Trainee at CMS Sofia.