NEK Dismisses Accusations by Employers that It Shares Blame for Soaring Electricity Prices on Free Market

The National Electricity Company (NEK) Friday dismissed accusations by employers' organizations from the previous day that it shares the blame for the soaring electricity prices on the free market. NEK CEO Peter Iliev said that his company observes the law and its key responsibility is to supply electricity on the regulated market.

In a letter to the Prime Minister, made public on Thursday, the Bulgarian Industrial Capital Association, the Bulgarian Industrial Association, the Bulgarian Chamber of Commerce and Industry, and the Confederation of Employers and Industrialists in Bulgaria wrote that the high electricity prices of the last few days have resulted from a spate of steep drops in supply from NEK. On May 7, for example, NEK offered 13,477 MWh of electricity for a price of 79.41 leva per MWh. On May 8, it offered just 4,309 MWh and the price went up to 164.60 lv/MWh. The same amount of 4,309 MWh was also offered on May 9, for a price of 130.56 lv/MWh.

The employer organizations wondered what caused the more-than-threefold decrease in the amount of electricity coming from NEK and why the company continued to supply amounts that were far from sufficient.

The NEK CEO said Friday that for the ongoing regulatory period his company is required to supply to the power-distribution companies over 12,400,000 MWh of electricity. Due, however, to unseasonably cold weather, consumption increased above the expected level. Also, many business consumers went back to the regulated market. "For this reason, the estimated consumption will increase by 2,400,000 MWh by the end of June, which, in turn will result in redirecting 1,400,000 MWh from the free market to the regulated market," said Iliev.

He explained that it is not NEK's obligation to balance off the free market and yet it offers on the free market all quantities that become available.

Between April 17 and May 7, NEK put on the free market between 3,000 and 9,000 MWh, but those amounts did not sell out.

Iliev added that prices on the free market depend on supply and demand. "Prices are what the market says they will be," he said.

Source: BTA