Households that have switched off their central heating will be charged for part of the heat that enters their building under draft changes in the Energy and Energy Efficiency Act approved by the government last Thursday. The proposed changes need parliamentary approval to become effective.

The deputy chief of the State Agency for Energy and Energy Resources (SAEER), Angel Minev, who announced the changes, did not reveal exactly what share of the heat supplied to a building by the heating utility will be paid by those with disconnected radiators. This prompted the media to speculate on the possible fee, with forecasts reaching up to 30 per cent.

There is also a proposal that those who have not paid their heating bill for more than two months will be disconnected from the central heating system after a warning. The government-approved bill extends to September 30, 2002, the deadline for the installment of heat metres by all heating utility subscribers.

The amendments to the act envisage fines for energy producers, and not only consumers. For example, in the case of an unjustified refusal for access to the transmission or distribution network, fines vary between 1,000 and 20,000 leva, as well as in cases of unjustified refusals to sign contracts for selling electric power, heating, or natural gas. If prices differ from those determined by the State Commission for Energy Regulation (SCER), fines will vary between 7,000 and 20,000 leva.

Other changes proposed in the bill are establishment of a Ministry of Energy, and transformation of the State Agency for Energy and Energy Resources (SAEER) into an executive agency with this Ministry. Speaking to the press before a regular government meeting on Thursday, Economy Minister Nikolai Vassilev said that it is logical to bring together in one department the activities now performed by the SAEER and the Agency for Energy Efficiency.

The SCER will remain, and, as of the beginning of next year, any contemplated changes in the price of electricity, central heating and gas will have to be approved by it. A completely new energy bill will be ready by next June.

Meanwhile, it was revealed that 40 to 45 per cent of the central heating consumers in Bulgaria adjust and measure the heating they use with their own devices. They belong to the central heating accounting system, Milko Kovachev, the chairman of SAEER, said last week.

In his view, the heating sector is facing more difficult times than last year. The last two years saw a sharp price rise in fuels, which account for some 80 per cent of the prime cost of central heating. The margin of prime cost and fixed price for households grew, which explains why the companies' planned losses for last year approximated 60 million leva, and for this year - 100 million leva, Minev said.

A strategy for development of the heating companies as well as an action plan, were elaborated in 1998-1999, he recalled. On one hand, the plan contained the heating price rise percentage, while on the other hand, it provided for a gradual reduction of state subsidies to companies, which will later be given to the subscribers themselves.

However, the implementation of the action plan was delayed. Instead of the expected 30 per cent, the price went up by 18 per cent in 1999 and remained unchanged throughout the years 2000 and 2001. Thus the central heating price again failed to cover the companies' production costs.

The problem with the central heating companies dates back to the 1950s, when a decision was made to produce heating and electricity under a combined method instead of developing gas central heating, Minev said. "If we were to start now, obviously the right solution would be to convert to gas," he said.