Bulgaria freezes power prices for households until end-March

SOFIA, Dec 16 (Reuters) - Bulgaria's lawmakers voted on Thursday to freeze power and heating prices for households until the end of March, giving the new ruling coalition time to come up with a plan to shield the European Union's poorest nation from surging energy costs.

Lawmakers froze the regulated prices on Wednesday without saying when the measure would end. Power distribution companies and energy analysts have decried the move as populist and warned it could bring down the whole power system. read more

In the past, rising power prices have sparked street protests in the Balkan country, where many households often struggle to pay winter bills. High electricity costs toppled the second government of former premier Boyko Borissov in 2013.

"A shocking price increase could bring many households to the brink of poverty ... The interests of the supply companies and the consumers should be balanced," said Radoslav Ribarski, deputy from the ruling centrist PP party.

The moratorium prevented the independent energy regulator from increasing power prices by an average 11.5% and heating prices by about 30%, bringing them more in line with the market prices power companies pay for electricity and natural gas.

Bulgaria's new Prime Minister Kiril Petkov welcomed the freeze and said regulated prices would only be increased after all steps that could limit the costs of energy suppliers are taken. He did not elaborate.

"It is a very important and clear sign that before a serious analysis of the power system the additional costs cannot be passed on to the consumers," Petkov told a government meeting.

Distribution and supply companies have to buy electricity at much higher market prices to balance power flows. They said they were already in a liquidity crunch since prices soared in September and the freeze would deepen their losses.

Some energy suppliers have gone bust elsewhere in Europe because price caps stopped them passing on surging wholesale prices to consumers.

The average price on the Bulgarian energy bourse's day-ahead platform on Thursday was 563 levs ($325.11) per MWh, compared to the electricity price set for households of about 115 levs MWh.

($1 = 1.7317 levs)

Reporting by Tsvetelia Tsolova Editing by Andrew Heavens and Mark Potter

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