Business will not protest on January 15, compensation for high electricity prices is expected to be extended

Employers and unions announced that they are postponing the protest scheduled for January 15, prepared due to the lack of a mechanism for compensation for high electricity prices.

"There will be no protest on January 15. The code from "red", if we use the precipitation signature, goes to "yellow". The code is not "green", because the program is not yet a fact, although we are assured that this will happen. This is the reason why we are postponing the protest, but there is no permanent settlement to the problem, so that it does not lead to heart attack situations and enterprises stop working", explained at a briefing in BTA the Chairman of the Management Board of the Association of Industrial Capital in Bulgaria (AICB) Vasil Velev.

The press conference was also attended by Dobri Mitrev, Chairman of the Bulgarian Industrial Chamber, Vasil Todorov, Deputy Chairman of the Board of the Bulgarian Chamber of Commerce and Industry, Todor Kapitanov, Vice President of the Confederation of Bulgarian Trade Unions, and Mario Ninov, Chairman of the National Strike Committee of the Confederation of Labor "Podkrepa".

By a permanent settlement of the problem, the social partners understand a legally regulated and permanently operating compensation mechanism that would be automatically activated in times of crisis.

At the press conference, the position agreed between the four employer organizations (AICB, Bulgarian Industrial Chamber, Bulgarian Chamber of Commerce and Industry, Confederation of Employers and Industrialists in Bulgaria) and the two trade unions ("Podkrepa" and CITUB) was disseminated, in which the partners state:

"Taking into account the constructive talks with the parliamentaryly represented political parties and the understanding of the dramatic situation of the Bulgarian industry, which threatens to sink the national economy, we, the social partners of the Republic of Bulgaria, in anticipation of the formation of a regular government, postpone the national protest announced on January 15, 2025, we remain on protest readiness".

The social partners held talks with representatives of almost all parliamentaryly represented political groups, with the exception of "Vazrazhdane" and MECH.

"These parliamentary groups unite 193 MPs. That is why we believe that tomorrow the budget committee will support the second reading of the Law on the Collection of Revenues, the Execution of Expenditures until the Adoption of the Budget for 2025 and, accordingly, it will include the continuation of the operation of paragraph 3 of the Law on the State Budget for 2024," announced Vasil Velev, quoted by BTA.

Regarding the issue of finding a permanent solution to the problem, the chairman of the AIKB said that an agreement has been reached with the parliamentary groups and the Ministry of Energy to settle the issue with changes to the Energy Law.

Vasil Velev called on members of business organizations not to increase the prices of manufactured goods and services and not to stop work due to excessively high electricity prices, due to the agreed threshold of 180 leva, which program the partners expect the government to adopt within days and with a validity period of January 1, 2025.

Compensations for businesses for high electricity prices were introduced in 2021 as a measure to protect non-household consumers. Initially, in 2022, they were set on a monthly basis as a "ceiling" above which the state covered the cost through the Electricity System Security Fund. This threshold was initially set at 250 leva per megawatt-hour (MWh), then became 200 leva/MWh from 2023, and from July last year until the end of December - 180 leva/MWh.

Employers' organizations insist that the compensation threshold of 180 leva per megawatt-hour be preserved for all non-household consumers, including kindergartens, schools, hospitals, temples, museums, etc. According to AIKB data, the total number of non-household consumers exceeds 600,000.

Acting Minister of Energy Vladimir Malinov announced last week that, along with the draft compensation for December 2024, the ministry has also prepared a draft to extend the program in the first quarter of 2025. But both projects are tied to the work of the deputies in the 51st National Assembly and when they will finally vote on an extension law for the budget by the end of March this year.

The draft, which has been proposed for voting by the Council of Ministers, provides that in the event of a shortage of funds in the Electricity System Security Fund (the program to compensate businesses for high electricity prices is financed with funds from the Electricity System Security Fund - author's note), the state budget is expected to cover the deficit in the fund.