Bulgarian Energy Holding Probed by EU Over Power Contracts

Bulgarian Energy Holding EAD faces a formal antitrust probe by European Union regulators over possible monopoly abuse in the electricity industry.

The European Commission is investigating provisions in electricity supply agreements struck by the state-owned company’s units that prescribe where power can be sold and may prevent its resale outside Bulgaria, the Brussels-based agency said in an e-mailed statement today. Such restrictions may hinder competition, the EU said.

Regulators are also examining BEH’s activities on the gas market, Antoine Colombani, a spokesman for the commission, told reporters in Brussels. That investigation is still at a preliminary state, he said. The electricity probe focuses on territorial restrictions in contracts since Bulgaria joined the EU in 2007, he said.

The EU is separately probing OAO Gazprom, Russia’s natural-gas monopoly, over terms in its long-term gas supply contracts with EU countries. The EU has a string of cases, including the BEH probe, that are “helping to foster a more competitive energy environment” in central and eastern Europe, EU Competition Commissioner Joaquin Almunia said in a speech in September.

“BEH will fully cooperate with the European Commission in its effort to establish whether there is monopoly abuse on the Bulgarian energy market,” the state holding company said in a statement today. “The probe doesn’t mean the commission has already established a final violation. BEH has done everything possible to comply” with EU energy market regulations, it said.

Regulators visited the offices of BEH’s units Bulgargaz and Bulgartransgaz as well as Bulgarian’s biggest private natural gas distributor Overgas Inc. last year.

Overgas, which is partly owned by Gazprom, said at the time that it had complained to the EU in November after Bulgartransgaz blocked access to a high-pressure pipeline.

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