The price of electricity for the Bulgarian business is expected to go up between 30% and 60%, the companies in this country alarmed at the end of 2017. As a result, prices will increase and the bill will be paid by the Bulgarian consumers, the labor unions in Bulgaria added. In the beginning of 2018 the forecasts about future increase of electricity prices became less apocalyptical and showed that electricity prices for the Bulgarian business are expected to rise between 15% and 30%.

January is almost gone and electricity prices have not changed yet. However, public discontent and fear among the local business and labor unions remained. According to the Chairman of the Bulgarian Industrial Association Bozhidar Danev, the economic schizophrenia continues which is due to bad and vicious management. Tension escalated to such an extent that Bulgaria’s Minister of Energy Temenuzhka Petkova and the Chairman of the Energy Regulator Ivan Ivanov invited repeatedly Bulgarian employers and employees at meetings and discussions and were not tired of repeating that currently there were no reasons for drastic increase in the price of electricity. However, the Bulgarian business and syndicates have not changed their positions and voiced expectations that the awaited hike of the electricity prices will happen in the beginning of February this year.

There are two types of electricity prices in Bulgaria: prices set at the liberalized market and fixed prices at the regulated market. The prices at the regulated market are set by the Energy and Water Regulatory Commission usually twice a year. The independent energy exchange started functioning in 2015, but practically became a factor at the electricity market in 2017. On theory all Bulgarian companies and households have the right to purchase electricity from the liberalized market, but in fact the Bulgarian business has bigger access to that market and the electricity sold at the free market is produced in two state-owned power plants - the nuclear power plant in Kozloduy and a state-owned thermal power plant in South Bulgaria. The formal liberalization of the electricity market in this country has not yielded any real effect for the Bulgarian consumers who buy cheaper electricity from the regulated market and find it difficult to purchase from the liberalized energy market. Even Bulgaria’s Minister of Energy admitted that things were not perfect at the liberalized energy market.

The Bulgarian business and syndicates, however, are ready to launch protests over possible increase of electricity prices. They intend to organize large-scale protests on February 28 if the problem remains unsolved after the requested meeting with Bulgaria’s Premier Boyko Borissov. The Bulgarian business assumed that a cartel on the liberalized electricity market may exist and that the suppliers of electricity at this market are showing non-market behavior which may result in drastic increase of electricity prices. The Bulgarian syndicates are worried that the situation poses threat to the interests of the employees and may trigger big inflation. They are warning that the Bulgarian companies will be forced to reduce production costs and cut their funds for salaries.

Electricity prices in Bulgaria are lowest in the whole EU. One megawatt costs EUR 38 in this country. However, wages in this country are also lowest in the European Union which means that electricity prices in Bulgaria should be socially acceptable. However, market realities cannot be neglected for too long, because it may result in irreparable distortions in the whole economy. This country is a member of the EU and its economy is open to influence from outside. In other words, electricity price in Bulgaria will be under the pressure of prices in other EU member states where they are much higher. That is why the increase of electricity prices in Bulgaria in the medium term seems inevitable. However, this can be compensated with higher incomes and increased competitiveness and adaptivity of the Bulgarian companies.

English version: Kostadin Atanasov