March 16, 2014 / 1:25 PM / 3 years ago

Bulgaria threatens to strip foreign power companies of their licenses

3 Min Read

SOFIA, March 16 (Reuters) - Bulgaria may strip foreign-owned power distributors of their operating licences if they fail to pay their dues to indebted state public power provider NEK, the energy minister said on Sunday.

The Balkan country's energy regulator urged its three main power distributors - Austrian EVN, Czech CEZ and Energo-Pro - on Friday to pay some 318 million levs ($226.47 million) within three days.

CEZ and EVN have denied any wrongdoing, arguing that NEK - which had debts exceeding 2 billion levs last year - failed to repay them the money they were obliged by law to pay for wind and solar power installations. Energo-Pro was not immediately available for comment.

"If the power distributors do not pay by Tuesday, I will be forced to inform the chief prosecutor about possible crimes," Energy Minister Dragomir Stoynev told reporters.

"The energy regulator also has the right to launch procedure for the revocation of the licenses of the three companies."

Such a move would be another blow for foreign energy investors already hit by the Socialist-led government's decision to slash household electricity bills twice since taking power in May - squeezing foreign electricity distributors as well as local power producers.

The power cost cuts aimed to avoid fresh public protests over high utility bills that eat up a large part of household incomes in the European Union's poorest country. Protests over high prices and low living standards brought down the previous, centre-right government last year.

Stoynev said the authorities were very worried by the "irresponsibility of the power distributors".

Last year, the regulator investigated CEZ following allegations that it breached the country's energy regulations but then said it found no wrongdoing that would justify removing the company's distribution licence.

A spokesman for EVN said the company would give more details about NEK's claims on Monday and added all EVN companies were following Bulgarian regulations and legal requirements.

CEZ has said it does not have unsettled accounts with NEK.

Bulgarian nationalist party Attack, which holds the balance of power in parliament, wants to nationalise the country's energy distributors.

The ruling coalition, which groups the Socialists and their junior partners, the ethnic Turkish MRF party, is two seats short of a majority in the 240-member parliament and has to rely on the unofficial support of Attack, which has 23 deputies. ($1 = 1.4042 Bulgarian levs) (Reporting by Angel Krasimirov and Tsvetelia Tsolova; Editing by Sophie Walker)

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