Bulgaria Introduces Monthly “Electricity Meter” Fee for All Households

Household consumers in Bulgaria may soon face a new fixed fee for their electricity meters, even if they do not consume any electricity.

This development follows a proposal from the country’s electricity distribution companies (ERPs) and the Energy and Water Regulatory Commission (EWRC) during an open meeting to discuss household electricity prices.

The proposed fee, aimed at supporting the forthcoming liberalization of the electricity market for households, has sparked significant debate and concern among consumers, particularly those with properties used only seasonally or occasionally.

The Proposal

The introduction of a fixed electricity meter fee is a notable shift from the current practice, where households only pay for electricity access and transmission based on their actual consumption. Under the new proposal, all households would pay a monthly fee irrespective of their electricity usage.

This change is intended to ensure a stable revenue stream for electricity distribution companies as the market undergoes liberalization.

Zornitsa Genova from “Electricity Distribution Networks West” advocated for the introduction of the fee starting July 1, suggesting it be calculated either in kilowatts per day or in amperes.

She emphasized that the fee should be paid monthly to align with the upcoming changes in the electricity market. Shteru Radev from “Elektrorazpredelenie Yug” echoed this sentiment, proposing a uniform fee for each month of the year to be applied to every electricity meter.

Rationale Behind the Fee

The primary justification for the new fee is the forthcoming liberalization of Bulgaria’s electricity market, which aims to increase competition and potentially lower prices in the long run.

However, the transition requires significant investment and operational stability for ERPs. According to Alexander Yordanov, a member of the EWRC, the access fee would be based on connected power, providing a more predictable revenue model for electricity distribution companies.

Yordanov also recommended that energy operators synchronize their approach to setting the new network access fee to ensure fairness and uniformity across different regions.

Currently, households pay access and transmission fees based on their consumption, which means they incur costs only when they use electricity.

The proposed fee structure would change this, affecting all property owners, including those with villas, holiday homes, or uninhabited apartments.

Impact on Property Owners

The introduction of a fixed electricity meter fee has raised concerns among property owners who do not use their properties year-round.

Villas and holiday homes, often occupied only for a few months each year, would still incur monthly fees. Critics argue that this is akin to requiring people to pay for a road vignette even if they do not own a car, simply because owning a property might necessitate travel.

The potential impact on such property owners is significant. Many of these properties are secondary homes or investment properties, and the additional monthly fee could represent a considerable financial burden.

For instance, retirees with vacation homes or individuals with inherited properties might find the new charges particularly onerous.

European Context

Interestingly, only five EU countries—Austria, Spain, Italy, the Netherlands, and France—currently impose similar fixed fees on households that do not consume electricity. In over 20 other EU countries, there is no such practice.

This discrepancy raises questions about the necessity and fairness of the proposed fee in Bulgaria, given the diverse regulatory approaches across Europe.

Market Liberalization and Price Increases

While the fixed fee proposal is still under discussion, Bulgarian households are already bracing for an increase in electricity prices from July 1.

The EWRC has proposed an average price hike of 1.39%, with the most significant increase expected in Western Bulgaria.

Conversely, Northeast Bulgaria might see a slight decrease in prices. However, if current trends in the free market continue, the price rise could exceed initial estimates.

The anticipated price increase is partly attributed to the broader liberalization efforts. As the market opens up to more competition, initial adjustments and transitional costs are likely to drive prices up.

Over time, however, the introduction of competition is expected to foster efficiency and potentially lower prices for consumers.

Stakeholder Reactions

Reactions to the proposed fee have been mixed. Consumer advocacy groups have voiced strong opposition, arguing that the fee is unfair to those who use minimal or no electricity.

They contend that the fee would disproportionately affect vulnerable populations, including pensioners and low-income families with secondary properties.

On the other hand, proponents of the fee argue that it is necessary for the stability and modernization of Bulgaria’s electricity infrastructure.

They point out that maintaining the electricity grid incurs costs regardless of individual consumption levels, and a fixed fee would ensure that all users contribute to these essential services.

Future Developments

The EWRC Working Group, tasked with preparing the July 1 electricity price report, has noted that ERPs have proposed different methods for setting the access fee, each tailored to address specific regional challenges.

For example, the ERP in Western Bulgaria faces issues related to the high number of villas in its territory, while the ERP in Southeastern Bulgaria is grappling with the growth of renewable energy installations.

The Working Group has emphasized the need for a unified approach, suggesting that a common position among the three ERPs could be reached by the autumn, potentially leading to the fee’s implementation by July 1, 2025.

As discussions continue, the final decision on the new fee structure will likely consider various factors, including consumer feedback, regional disparities, and the broader goals of market liberalization. The outcome will significantly shape the landscape of Bulgaria’s electricity market and impact millions of household consumers.

Conclusion

The proposal to introduce a fixed electricity meter fee for Bulgarian households represents a significant shift in the country’s electricity market policy.

While aimed at supporting market liberalization and ensuring stable revenue for electricity distribution companies, the fee has sparked considerable debate.

Property owners, particularly those with seasonal or uninhabited properties, are concerned about the financial impact, while consumer advocates argue against the fairness of the fee.

As Bulgaria moves towards a more liberalized electricity market, balancing the needs of consumers with the operational requirements of ERPs will be crucial.

The ongoing discussions and eventual decision by the EWRC will play a pivotal role in shaping the future of electricity pricing in Bulgaria, setting a precedent that could influence regulatory approaches in other countries as well.

 

This article was created using automation technology and was thoroughly edited and fact-checked by one of our editorial staff members