Measure for financial aid of the business due to the high prices of electricity in Bulgaria

09 November 2021

By Decision №771 of the Council of Ministers of November 6, 2021, a Program for Compensation of non-household end Customers of Electricity (the "Program") was finally adopted. The budget of the Program is in the total amount of BGN 450 mln. for the period from 01.10.2021 to 30.11.2021.

Who will be supported?

The program is aimed at all non-household end customers within the meaning of § 1, items 27d and 33a of the Additional Provisions of the Energy Act and provides a mechanism to support non-household end customers through i) electricity traders, ii) suppliers of last instance, iii) electricity producers, selling directly to non-household customers, and iv) the operator of an organized electricity exchange market (called "Suppliers" for the purposes of the Program).

It is expected that about 633,000 non-domestic end customers of electricity will benefit from the measure. They will be supported by compensation based on the quantities of active electricity, on which the price "debt to society" is charged, with a fixed amount of support of BGN 110 per MWh, excluding VAT. The compensation will automatically reduce the amount due to be paid by non-household end customers.

How the aid will be granted?

The compensation will be granted by the respective Supplier, with whom a non-household end customer has a contract for the supply of electricity.

The support will be granted on the basis of contracts concluded between the Ministry of Energy ("ME") and the Suppliers. In this regard, by the 15th of the next month, the Suppliers will submit to the ME an application together with a reference and a declaration in a form for receiving financial means for reimbursement of the expenses of their non-household end customers, for their invoiced quantities of electricity. where the price "debt to society" for the previous month is being charged.

Approved standard contracts with the Suppliers will be used for the implementation of the measure. When concluding the contracts with the individual Suppliers, the Minister of Energy may agree on different dates for applications by the Suppliers, as well as different dates for receiving the necessary information from the Electricity System Security Fund.

When the Program will enter into force?

As the Program represents a state aid scheme, in accordance with the requirements of the State Aid Act, the said should be notified to the European Commission, which will approve it in accordance with the Temporary Framework for State Aid, adopted by the EC on 19.03.2020. The expectation is that the Program will be greenlighted by 15.11.2021 at the latest, so that the first compensations (provided as reductions to the bills for October) can be received by the business by the end of November.