(BTA). Before the Bulgarian Energy Holding (BEH) is dissolved, which is expected to happen in the middle of 2010, all state-owned electricity companies will be grouped into a single structure in which the National Electric Company (NEK) will be the leading entity, Deputy Economy, Energy and Tourism Minister Maya Hristova told journalists on Wednesday. She specified that the grouping will not have to be cleared with the European Commission. "The companies will be grouped according to licensed activity, without having to be divided according to operating activity," Hristova explained.
The idea of grouping the electricity companies is to achieve stability of the companies' assets, while keeping NEC as the leading trader in electricity. "If NEC is merged with other companies, it will be very difficult to achieve such independence of the company considering its position," the Deputy Minister noted.
She commented that the idea of setting up the BEH was to secure the construction of the Belene Nuclear Power Plant by the assets generated in the holding, "but this is no longer feasible." The assets of all state-owned energy companies are of a lesser value than the estimated value of the Belene N-Plant. So far the BEH has assumed obligations on the major energy projects like Nabucco, South Stream and Belene on paper only, Hristova also said. She argued that the grouping of the state-owned electric companies on a different basis will precisely achieve the securing of the large energy projects.
Once the BEH is dissolved, the debt of the Sofia District Heating Company will be swapped for equity or will be deferred and rescheduled, Hristova said. Another option is to transfer the debt to Sofia Municipality together with the ownership of the heating utility.
"NEC has run into debt not because it has purchased more expensive electricity but because the way the price was formed," the Deputy Minister commented. "The regulatory framework has not been revised for years. Some of the price components which were recognized in the prices charged by the electricity distribution companies were not taken into account in the NEC pricing framework," she added. "When the electricity distribution companies were privatized in 2004, Bulgaria was not yet a EU member. Since July 1, 2007, we have an open market and we have directives to implement, and this is not transposed in the regulatory framework," Hristova explained, adding that the State Energy and Water Regulatory Commission is already addressing the matter seriously.
The Deputy Minister said that NEC has not incurred excessive expenditures but has made investments which do no reckon adequately with the company's yield and the possibilities to attract capital. She does not think that NEC and Bulgargaz risk being decapitalized. Hristova declined to comment on the checks conducted by the State Agency for National Security at the EVN customer centres and said that there have been no such checks at NEC.
