Liberalization of electricity market with a new Bill for Amending and Supplementing the Energy Act

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On 29.05.2020, a Bill for Amending and Supplementing the Energy Act was submitted to the National Assembly. It aims to introduce into the national legislation of Bulgaria requirements for the introduction of non-domestic electricity consumers on the free market, according to Directive (EU) 2019/994 of the European Parliament and of the Council of 05.06.2019 on common rules for the internal market of electricity and amending Directive 2012/27 / EU. Thus, only household consumers will remain on the so-called regulated market.

The changes are of particular importance, as they will affect all non-household electricity consumers that are in the regulated market segment, as well as all trade participants in the electricity market – producers, final suppliers, public suppliers and electricity traders. This is clear from the amended provisions of Art. 30, para. 1, item 9, Аrt. 94a, para. 1, Аrt. 97, para. 1, item 4 and of the definition of “final supplier” in § 1, item 28a, l. “A” of the Energy Act, in which the words “and non-domestic” are deleted and which should enter into force on 01.10.2020.

The authors of the Bill express hope that the changes will help overcoming the current problems in the sector, such as the presence of a high degree of regulatory intervention – in other words, the presence of many customers on the regulated market. The targeted effect is to overcome the present barriers to electricity supply under the same established conditions, as well as the costs that are higher than those on the market-based electricity supply.

It is expected that bringing more customers to the free market is expected to guarantee fair competition and easy access for different suppliers, as well as fair prices on the free market in favor of consumers.

Another positive effect of the changes is to lead to a more accurate forecast of the quantities of electricity needed for the regulated market.

The current amendments propose a transitional period for the entry into force of the provisions in order the clients that will enter the free market to have the opportunity to choose new suppliers, including in the cases of necessity of conducting procedures under the Public Procurement Act by state and municipal institutions and companies.

As for the final electricity suppliers, they will be obliged to notify all non-residential end customers of electricity by 01.10.2020 to change their electricity supplier, as after this date the final suppliers will not have a legal commitment to supply them with electricity.

A market union “Day Ahead” is expected to be established latter this year – in the autumn. The benefit of this will be to enable traders on the organized stock market to manage their supply and demand much more efficiently and to achieve more competitive prices.

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