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Bulgaria Moves to Revoke Power-Selling Licenses of CEZ, EVN

Bulgaria started proceedings to revoke local power-distribution licenses of CEZ AS, the biggest Czech utility, Austria’s EVN AG and Prague-based Energo-Pro AS for withholding green energy payments.

The utilities owe a combined 347.6 million lev ($247 million) to state-owned National Electricity Co., also known as NEC, in disbursements for subsidies to renewable and combined heat and power generators, the State Energy and Water Regulation Commission in Sofia said in an e-mail today. The regulator first asked to repay 318 million lev by yesterday, of which EVN paid 32 million lev and CEZ paid 8 million lev. Both companies pledged to pay more by the end of the month.

The three utilities “deprive National Electricity from the needed funds,” the regulator said. “This blocks NEC’s operation, hindering its ability to pay to power producers and threatens power supply security in the energy system.”

Bulgaria’s Socialist government of Prime Minister Plamen Oresharski, which took office in May, cut power prices twice last year after high utility bills triggered public protests and toppled the previous administration of Prime Minister Boyko Borissov. The price cuts generated losses at National Electricity and made CEZ, EVN and Energo-Pro cut investments.

Fines, Debts

The regulator imposed 1 million-lev fines on EVN and Energo-Pro, it said yesterday, adding that a penalty order will be also handed to CEZ by the end of the week. EVN owes 216.6 million lev to NEC, CEZ owes 67.3 million lev and Energo-Pro owes 63.5 million lev, according to the commission.

The three utilities have seven days to stop the violations and eliminate their consequences, the commission said. They have 14 days to present their statement on the license revocation proceedings and the regulator will meet to discuss the licenses on April 7, it said.

“We are astounded by the” regulator’s decision, CEZ said in an e-mailed statement today. “There are no grounds for such extreme actions as CEZ Bulgaria operates in full compliance of Bulgarian and European laws. We expect to receive the official decision.”

CEZ, EVN and Energo-Pro denied wrongdoing, saying the situation was created by a regulator’s decision in 2012, which enabled National Electricity not to refund the full amount paid by the distributors to buy energy from wind and solar power producers. The decision was overturned by the Supreme Administrative Court in mid-2013 and the regulator did not provide new instructions on how the preferential payments are distributed between the power-distributors and NEC, EVN said in a statement.

CEZ controls the power companies that serve Sofia and Pleven in northern Bulgaria and together account for 41 percent of the electricity consumers. EVN serves 1.5 million customers in Plovdiv and Stara Zagora in southern Bulgaria.

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