New prices for central heating will be introduced in Bulgaria as of July 2006.
Konstantin Shushulov, chairperson of the State Energy and Water Regulatory Committee (SEWRC), announced this on May 22 after a SEWRC meeting in Sofia. According to Shushulov, the expected hike of power stations operating on natural gas will be about seven to eight per cent.
There are real grounds for such a price hike, Shushulov said.
As of the beginning of 2006, natural gas prices rose by 10 per cent, which reflected the costs of almost three quarters of the central heating stations in the country.
The heating utility companies have already filed their tariff hike proposals and the state regulator is examining them.
Shushulov said the SEWRC would take into account that the heating companies had had increased fuel costs. About 70 per cent of heating utilities are gas fuelled. The utility companies had filed their price hike requests in February 2006. Such was the case with the Sofia heating utility company Toplofikatsia, which sought a 10 per cent hike. Toplofikatsia is the biggest in the country and is majority owned by the Sofia municipality.
A week ago, the Sofia municipality council approved a heating tariff hike proposal of 8.75 per cent, to 60.16 Bulgarian leva a MW (VAT included).
CEZ, the Czech company that owns the Sofia and Pleven electricity suppliers, requested a 6.9 per cent price increase. Germanys E.ON sought the same price. Austrian firm EVN, owner of the Plovdiv and Stara Zagora electricity companies, requested an 8.5 per cent increase.
The October electricity price hike would be minimal, Shushulov said. A higher increase could be expected in January 2007, after the closure of the Kozloduy nuclear power plant reactors, he said.
The SEWRC had discussed the cancelling of the capacity fee for households with disconnected heating radiators and halving the capacity fee for households that have forgone the heating service and use only hot water, Shushulov said.
Power tariffs will increase as of October 2006 as the electricity hike will be insignificant for household subscribers, Shushulov noted.
The new heating prices would most likely most affect the people with disconnected radiators living in residential buildings with central heating. Because of low incomes, some Bulgarian decide to disconnect their radiators from the central heating system. At the same time, the heating companies insist that these people pay a fee for the heat coming from the tubes that circulates through their apartments.
This legal situation is based on the amendments to the Energy Act that the Government has tabled in Parliament. The amendment draws particular interest in article 143, which envisages that between 20 and 40 per cent of the readings of the common heat-flow gauge would be distributed among all the people living in a certain building containing a central heating system.
According to this amendment, people who do not use the central heating might be paying more for heating the basements, the landings between floors and the attics, even if there are few residential buildings with radiators in the common parts. That way, according to comments in the Bulgarian-language press, everyone will pay for the central heating utilities, even people who are trying to cut down on their heating bills.
Shushulov said he would propose that people whose radiators are switched off and who have stopped their hot water supply to not pay a power fee, while consumers who have switched off their heat supply but are supplied with centrally heated water to pay half the fee.
When I meet with Economy and Energy Minister Roumen Ovcharov, I will strongly insist that we find a fair solution to the power fee problem. Im also going to lobby in Parliament against the project for increasing the share of the common parts in the heat bills, Shushulov said.
The increase of the heating prices curiously coincided with a check into Toplofikatsia. The investigations were ordered by Sofia mayor Boiko Borissov, based on reports of violations in the finance and accounting policy of the municipality-owned company. The inspectors found an expensive spa centre worth more than 10 000 leva in the company building.
Two months ago, Ovcharov asked the Finance Ministry to launch a check into the company. The check is expected to conclude by June 10. Its aim was motivated by Ovcharovs ministry to try to estimate the amount of Toplofikatsias uncollected bills. This would allow the state to decide its policy towards the company in the light of the debts Toplofikatsia has to the state-owned natural gas provider Bulgargaz.
