Bulgaria to Cap Power Producers’ Profits to Offset Rising Household Electricity Prices from July 1

The Bulgarian Cabinet has adopted a resolution to limit the profits of electricity producers in order to compensate for the expected rise in electricity prices for households starting July 1. This was announced on May 28 by Energy Minister Zhecho Stankov following a government meeting.

According to Minister Stankov, Bulgaria has also submitted a request to the European Commission for the approval of four new pumped-storage hydroelectric (PSH) projects to be built in the country.

Up to 1 billion leva (approx. €510 million) in additional revenue will be collected in the Energy Security Compensation Fund to ensure sufficient resources for compensating household consumers.

“The revenue for this fund comes from three main sources — profit caps based on generation technologies, 5% of the revenues of every electricity producer, and finally, the revenue from free CO₂ emission quotas allocated to us by Brussels,” said Minister Stankov.

The profit caps will vary depending on the type of electricity producer.

“For example, if the National Electricity Company (NEK) sells electricity on the energy exchange at a price above BGN 140/MWh, all revenue above that threshold will be transferred directly to the compensation fund,” explained the minister.

Stankov also disclosed that the state-owned gas company Bulgargaz has accrued a debt of BGN 300 million (approx. €153 million) to Turkish energy company Botas due to an unfavourable long-term supply contract.

“Negotiations are currently ongoing at a technical level, and we’ll see what final outcome is reached and what approach will be taken,” said Stankov.

Every day Bulgaria accumulates more than 1 million BGN debt under the contract.