March 17 (Bloomberg) -- Bulgaria demanded CEZ AS of the Czech Republic, Austria’s EVN AG and Prague-based Energo-Pro AS pay back 318 million lev ($226 million) of state subsidies or have their power-selling licenses revoked.
The State Energy and Water Regulation Commission in the capital Sofia requested the utilities to make the payments to state-owned National Electricity Company EAD by tomorrow or face “a legal action,” the regulator said on its website today. The funds are disbursements for preferential subsidies to renewable and combined heat and power generators.
“The regulator has initiated discussions with the four utilities to solve the problem and prevent a payments block in the whole energy system,” Kristina Tabakova, the regulator’s spokeswoman, said by phone today. “We’ll comment on further steps after the deadline expires tomorrow.”
Energy and Economy Minister Dragomir Stoynev has said the government will start a license revocation procedure for the three power distributors and will refer the case to the chief prosecutor’s office unless they pay, Capital daily reported today, citing the minister.
Bulgaria’s Socialist government of Prime Minister Plamen Oresharski, which took office after elections in May, cut power prices by an average 4.4 percent in August after high utility bills triggered public protests and toppled the previous administration of Prime Minister Boyko Borissov. The price cut generated losses at National Electricity and forced CEZ, EVN and Energo-Pro to cut investments.
CEZ, which controls the power companies that serve Sofia and together account for 41 percent of Bulgaria’s electricity consumers, sees no reason for Bulgaria to revoke its license, spokeswoman Barbora Pulpanova said in an e-mailed statement today. Bulgarian authorities’ demand to pay back subsidies for renewable energy is “not logical” and politically motivated.
EVN’s power distribution unit makes its monthly payments to National Electricity regularly and on time, the utility, which serves 1.5 million customers in Plovdiv and Stara Zagora in southern Bulgaria, said in an e-mailed statement.
Public outrage over the state of the economy and spending cuts last year spilled over into energy policy initiating prosecutor’s investigations of CEZ, EVN and Energo-Pro which ended in fines. Bulgaria’s energy regulator also moved to cancel CEZ’s power distribution license in 2013 and withdrew the motion after the government changed.
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