Two energy law infringement procedures threaten Bulgaria

Günther Oettinger, Mann mit Energien. Foto: EC

Two infringement procedures threaten Bulgaria’s energy sector, one on the South Stream planned pipeline, and another one on an attempt to withdraw the licences of energy utilities, EURACTIV as learned today (4 April). 

The first concerns the amendments to the Bulgarian energy law, aimed at exempting the South Stream pipeline from the EU legislation.

Today, the Bulgarian Parliament passed on a first reading amendments to the country’s energy law, according to which South Stream will be considered an interconnector, and not a pipeline. Thus, the Gazprom-favoured project would be exempted from the Third Package on energy liberalisation.

The amendments were backed by MPs from the two parties forming the minority coalition government, namely the Socialist Party (BSP) and the ethnic Turkish Movement of Rights and Freedoms Party (DPS), as well as the extremist party Ataka, which supports the government (see background). The opposition, the GERB party of former Prime Minister Boyko Borissov, voted against, with 64 MPs and 4 abstention.

The leader of BSP Sergei Stanishev is also President of the Party of European Socialists.

Ataka, which is described both as an extreme right and an extreme left force, is becoming more and more a mouthpiece for Russia, in Bulgaria. Recently, the party vowed to topple the cabinet if it backs a new round of Western sanctions against Russia over its annexation of Crimea [read more].

One of the authors of the amendments, Socialist MP Tasko Ermenkov, said that the new legislation was inspired by air travel – a plane is not considered landed on a given territory if it only overflies it, he said, reported Dnevnik, the EURACTIV partner in Bulgaria.

GERB MP Delyan Dobrev, who is a former energy minister, said that he didn’t understand why his socialist colleagues did not wait for Brussels’ opinion before passing the law.

Asked by EURACTIV to comment, Sabine Berger, spokesperson to energy commissioner Günther Oettinger, said that the EU executive was concerned about the compatibility of these amendments with EU legislation;

Oettinger has sent a letter to Bulgarian energy Minister Dragomir Stoynev to ask for clarifications, she said, adding that this letter was not yet part of a legal procedure. “Once we have received a reply to this letter we will analyse it and then decide on possible further action,” Berger said.

EU sources say that Bulgaria’s “cheating” over South Stream is likely to trigger a heavy infringement procedure, unless Sofia backtracks. 

As planned, the South Stream gas pipeline would run under the Black Sea to Bulgaria, and continue through Serbia, with two branches to Bosnia and Herzegovina and to Croatia. 

South Stream is facing problems, as the Italian oil company ENI, one of the key shareholders in South Stream, has expressed second thoughts about the project.

Also, Gennady Timchenko, the Russian tycoon presented as the winner of the tender to build the Bulgarian stretch of the pipeline, appears on the US blacklist adopted in response to Russia’s annexation of Crimea.

Second warning letter

Berger also said that Oettinger has sent one more letter to Stoynev today, on the issue of opening of procedures by the State Commission for Energy and Water Regulation (DKEVR) to withdraw licences to the three public suppliers of electricity in Bulgaria, Czech firms ?EZ, and Energo-Pro and Austria’s EVN. Bulgaria’s power distribution market is divided into three regions, controlled by those three firms.

DKVR takes the view that the three utilities are in breach of their licences to perform their activity, as they have claimed refund to the level of some €150 million as compensation for buying green energy at higher price. According to DKVR the utilities have no legal right to claim such expense.

Berger said that the Oettinger expresses his concern on this issue, as well as on the lack of progress in Bulgaria’s electricity sector reform, following the recommendations issues by the Commission and the World Bank last year.

She said that the dispute appeared to be over mutual debts between the three companies, and the state electric company NEK (National electric company). The Commission’s position is that disputes between energy companies are to be handled by the commercial courts in Bulgaria in the first place.

Oettinger’s spokesperson also said that DKVR should exercise its tasks independently of the government and of market interest, and exercise its powers impartially and transparently.

If the Bulgarian government fails to respect the independence of DKEVR, or if DKVR fails to comply its obligations described in the EU’s Third energy package, the Commission will open an infringement procedure against Bulgaria, Berger said. 

Bulgaria's Socialist-led government took office on 29 May 2013, ending months of political impasse, but lacking broad backing. Plamen Oresharski, a nonpartisan former finance minister, is prime minister.

At the parliamentary election, held on 12 May, the GERB party (Citizens for a European development of Bulgaria) of former Prime Minister Boyko Borissov emerged as the largest party with 97 of the 240 seats.

But as GERB proved incapable of finding a coalition partner, the Bulgarian Socialist Party (BSP), which obtained 84 seats, formed a cabinet with the Movement of Rights and Freedoms (DPS), a mainly ethnic Turkish party, which obtained 36 seats.

As they control just 120 MPs, BSP and DPS, the two governing parties, enjoy the tacit support of Ataka, a nationalist and xenophobic party, which obtained 23 seats.

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