Bulgaria delays decision on revoking foreign energy firms' licences

Mon Apr 7, 2014 7:48am EDT

Related Topics

* Energy regulator may revoke 3 foreign cos' licences

* Delays decision from Monday to April 28

* Power distributors deny breaching regulations

* State utility NEK presents new evidence in case

SOFIA, April 7 (Reuters) - Bulgaria's energy regulator said it would delay until April 28 a decision on whether to revoke the licences of three foreign-owned power distributors which are locked in a payments dispute with state power provider NEK.

The regulator began proceedings to revoke the licences of Austria's EVN, Czech firm CEZ and Energo-Pro last month in an escalating row that could damage investment in the European Union's poorest country.

It issued an ultimatum requiring the companies to pay a combined 318 million levs ($222.63 million) which state power provider NEK says it is owed, or risk losing their licences.

The companies, however, have refused to pay, arguing that NEK - which had debts exceeding 2 billion levs last year - failed to repay them money owed for wind and solar power installations.

A decision on whether to revoke their licences had been due on Monday but was delayed following new information.

"On Friday, NEK presented new evidence on the case," Boyan Boev, the head of the regulator told a public meeting on Monday. "We believe that more time is necessary for the companies to get acquainted with the new evidence and provide counter evidence.

"Given the new facts, we will hold another public meeting on April 28 to discuss the additional circumstances."

He did not give details of the new evidence.

According to the regulator, EVN owes 216 million levs, CEZ owes 67.3 million and Energy-Pro 63.7 million.

On Monday, the companies again denied any wrongdoing, saying they have not breached Bulgarian or European law and called on the regulator to terminate the process to strip their licences.

"The procedure to revoke the CEZ-Electro licence is unjustified and unlawful and we urge the regulator to suspend it," CEZ-Electro's executive director Kremena Stoyanova told the public meeting.

EVN has already initiated international arbitration proceedings at the International Centre for Settlement of Investment Disputes (ICSID) for regulatory violations over the compensation for prefinancing of wind and solar power installations.

Stripping the companies of their licences would be a blow for a sector already hit by the Socialist-led government's decision to slash electricity bills twice since taking power in May. The cuts have squeezed foreign distributors earnings and those of local power producers and increased NEK's debt burden.

The decision to slash prices followed street protests against high utility bills, which toppled the previous, centre-right government in February last year. ($1 = 1.4284 Bulgarian levs) (Reporting by Angel Krasimirov; Editing by Susan Fenton)

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