Energy watchdog says the prices of heating should go up by 39.26% from July 1

The Energy and Water Regulatory Commission (EWRC) foresees that from 1 July the prices of heating for households will increase by 39.26% on average for the whole country.

The regulator's proposed change is significantly lower than the energy companies' requests for an average increase of 123.58%.

Following the regulatory review and application of the pricing model, the Commission calculated an annual individual forecast price of heating for each of the companies for the regulatory period 1 July 2022-30 June 2023.

For household consumers of Sofia district heating, the price will be BGN 136.82/MWh, compared to the current price of BGN 98.48/MWh, which is an increase by 38.93%.

EVN Bulgaria Toplofikacija EAD consumers will pay a price of BGN 122.80/MWh, compared to the current price of BGN 99.55/MWh, which is a change of 23.26%.

The price of Veolia Energy Varna EAD is changed by 30.66% and becomes BGN 128.43/MWh, compared to the current price of BGN 98.29/MWh.

In practice, this means that a consumer in Sofia with a heating bill of 100 BGN will pay nearly 139 BGN in the new heating season 2022/2023.

The main reasons for the proposed increase in the prices of heating are the fourfold increase in the price of natural gas and the double increase in carbon emissions. These costs account for the largest share in terms of impact on final prices.

For companies across the country, these two components represent 80% of their heat generation costs on average. For example, for Sofia district heatin, gas and emissions account for 87.61% of the price of the district heating service, for Pleven district Heating, this share is 85.52%, for Vratsa District Heating - 83.08%, for Pernik District Heating - 81.68%. The situation is similar with the other companies, where natural gas and carbon emissions are also determining factors for the formation of the final price - from 64.36% to 79.34%.

As a result of the sharply increased demand for natural gas worldwide, and in recent months due to the military conflict in Ukraine, the prices of natural gas for the needs of district heating companies increased almost fourfold - from 45 BGN/MWh to over 160 BGN/MWh. During this period, the prices of heating for consumers remained unchanged, which led to an increase in the companies' costs and the accumulation of a deficit. In the new period, this deficit will be compensated as otherwise the companies may go bankrupt.

Carbon emissions prices over the past one-year period from 1 July 2021 have also increased by 79.02%, from €51/t on 1 July 2021 to €91.30/t on 1 July 2022. This further increases the costs of the companies, which should be accounted for in the heating prices.

In spite of the compensation for natural gas granted by the government in the total amount of more than BGN 220 million for the period December 2021-April 2022, the district heating companies have accumulated an additional deficit of gas costs of more than BGN 500 million. For Sofia district heating alone, the accumulated deficit over the past period is around BGN 350 million.

Notwithstanding these objective factors, which also justify the energy companies' requests for an average increase of 123.58%, the Commission has found regulatory mechanisms to cover part of the costs of the district heating companies through the Energy System Security Fund, which has so far served to compensate producers of green energy - from wind, water and sun.

Additionally, following analyses, the Commission adjusted a number of pricing elements of the companies that the regulator can directly influence - depreciation costs, repairs, remunerations, etc. In this way, the EWRC limited the increase in heating prices as much as possible.

As regards Sofia district heating company, the Commission doubled the technological costs of heat transmission - from 947 963 MWh to 457 963 MWh, or by 490 000 MWh. With this adjustment, the price for heat consumers is actually reduced from BGN 155,02/MWh to BGN 136,82/MWh. As a result, instead of being increased by 57.41%, the price for the metropolitan subscribers is projected to increase by almost 20% less - by 38.93%.

The Commission expects an additional positive effect on the prices of household consumers as a result of the measures announced by the government related to the reduction of VAT on electricity, heat and natural gas prices from 20% to 9% from 1 July 2022. The planned abolition of excise duty will also have a positive impact on electricity and heating prices.

The Commission's proposal on electricity prices is due to be considered at an open meeting and public consultation and finally adopted on 1 July 2022.

Чуйте последните новини, където и да сте!
Последвайте ни във Facebook и Instagram
Следете и канала на БНТ в YouTube
Вече може да ни гледате и в TikTok
Намерете ни в Google News