Eurelectric urges Bulgaria to drop power licences threat

SOFIA, April 25 Fri Apr 25, 2014 9:53am EDT

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SOFIA, April 25 (Reuters) - European power industry association Eurelectric urged the Bulgarian energy regulator to abandon moves to revoke the licences of distributors locked in a payments dispute it says could damage investment in the European Union's poorest country.

The Bulgarian watchdog is due to make a final decision on Monday over the operating licences of Austria's EVN, Czech company CEZ and Energo-Pro, which are refusing to pay a combined 318 million levs ($224.69 million) that state power provider NEK says it is owed.

"We believe that all those disputes must be solved in court, rather than with administrative measures," Eurelectric's deputy director general Jerome Chauvin told a meeting of the Bulgarian Industrial Association on Friday.

Stripping the companies of their licences would be a blow for a sector already hit by the Socialist-led government's enforced cuts to electricity bills since taking power last May. The cuts have squeezed earnings for foreign distributors and local power producers.

"Such a procedure could deter many investors to come to your country," Eurelectric's Chauvin warned.

The Bulgarian energy regulator began the proceedings last month after the three companies refused to pay NEK. They argue that NEK - which had debts exceeding 2 billion levs last year - failed to repay them money owed for wind and solar power installations.

The regulator, however, says that EVN owes 216 million levs, CEZ 67.3 million and Energy-Pro 63.7 million.

"Our wish is for the foreign companies in Bulgaria to observe the Bulgarian legislation and respect the Bulgarian institutions," Bulgarian Economy and Energy Dragomir Stoynev said during Friday's meeting.

"These companies should behave in Bulgaria the same way they do in their own countries."

On Wednesday, Austria's EVN said it was ready to begin talks with NEK to try to reach an agreement in the payment dispute and NEK has said it is ready to begin talks with CEZ. ($1 = 1.4153 Bulgarian Levs) (Reporting by Angel Krasimirov; Editing by David Goodman)

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