Bulgaria plans $866 mln aid to help businesses with soaring energy costs

SOFIA, Dec 21 (Reuters) - Bulgaria is planning financial aid of about 1.5 billion levs ($866.20 million) to help businesses, heating utilities and power distribution companies cope with soaring energy prices this winter, Energy Minister Alexander Nikolov said on Tuesday.

The government is working on a four-month scheme to ease the negative impact on industry and business from high electricity prices and on heating utilities from high natural gas costs from December until the end of March.

Nikolov said the relief measures were pending a government decision and approval from the European Commission.

The measures are focused on business consumers, as energy prices for households in the European Union's poorest member state are regulated and parliament voted to freeze them by the end of March. read more

The Balkan country has partially compensated businesses for high electricity bills in October and November.

The average electricity price on the Bulgarian energy bourse's day-ahead platform on Tuesday was 669 levs ($386.33) per MWh, compared to the price set for households of about 115 levs MWh.

The government plans to spend about 900-940 million levs to support businesses, 350 million levs for power distribution companies and about 200 million levs for firms that buy natural gas at regulated prices, which are mainly heating utilities.

Under the plan, which Nikolov hopes to be fully approved by the end of the year, Bulgaria will compensate companies that buy electricity at above 186 levs per MWh with up to 30% of the actual price.

Power distribution and network companies, which have to buy electricity at the energy bourse to balance power flows, will get bigger compensation, so that their costs will not be passed on to households at a later stage, Nikolov said.

The government will also provide aid to heating utilities that work on natural gas to alleviate the pressure for an eventual hike in heating costs during the winter, he said.

($1 = 1.7317 leva)

Reporting by Tsvetelia Tsolova, editing by Ed Osmond

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