15 September 2023
District heating for about 4,100 households in the city of Gabrovo is guaranteed under the Energy Act (EA) in case of termination of the license of “Toplofikatsia – Gabrovo” EAD. This opinion was sent by the Ombudsman, Ms Diana Kovacheva, in response to a request from the Energy and Water Regulatory Commission (EWRC).
The reason is the application of “Toplofikatsia – Gabrovo” EAD, submitted to the Regulator in August this year, for early termination of two licenses of the company and termination of the heat supply in the city, for which EWRC formally requested the Ombudsman’s opinion.
This refers to license No. L-008-03 of 17 October 2000 for “production of electricity and thermal energy” and license No. L-009-05 of the same date for “transmission of thermal energy”, granted to the company.
In her reply to EWRC, Prof. Kovacheva emphasizes that the two licenses granted by the regulator of “Toplofikatsia – Gabrovo” EAD are not publicly available. She also draws attention to the fact that the licenses and their annexes are strictly confidential, so that the Ombudsman or any other third party is not able to comment on specific aspects of the implementation or termination of these licenses.
Nevertheless, the Ombudsman takes an attitude in defense of household customers, stressing that the company “Toplofikatsia – Gabrovo” EAD, as a licensee, is obliged to continue to carry out its license activity until a new license is granted to another person in accordance with Article 56, paragraph 3 of Energy Act, pursuant to Article 57, paragraph 1 of the Energy Act.
“The legislator has provided that when a new licensee is not appointed within the notice period with which the licensee has requested the termination of the license, the EWRC appoints a special commercial manager (under Article 56, paragraph 4 of the Energy Act), who takes inventory of the facilities where the licensed activity is carried out, and they are handed over to him for management. The special commercial manager continues the implementation of the license activity at the licensee's expense until the ownership of the energy facilities is transferred and a new licensee is appointed,” writes Diana Kovacheva.
She is adamant that the possible termination of the two licences of “Toplofikatsia – Gabrovo” EAD should not interrupt the operation of the company's installed heat generation and transmission capacities.
“It is also important to note that according to the findings of the EWRC, reflected in Decision No. И5-Л-008/23.12.2019 on extending the term of both licenses by 15 years – until 17 November 2035, and in Decision No. БП-15/23.12.2019 on approval of the business plan of “Toplofikatsia – Gabrovo” EAD for the period 2020–2024, the production and transmission facilities of the company are in good technical condition and technically capable of operating within the specified time limit. In addition, the company has qualified and trained operating personnel,” the public defender also notes.
Prof. Kovacheva also draws attention to the fact that during the last few heating seasons, the Ombudsman’s institution received numerous complaints and reports from household customers of “Toplofikatsia – Gabrovo” EAD because of the frequent and unplanned interruptions of the heating supply and the deteriorated quality of the service.
“At the beginning of this year, I again brought this issue to your attention and the EWRC carried out an extraordinary audit of the company on the fulfilment of its licensing obligations, and specifically on its compliance with the heat supply quality indicators. In that case, “Toplofikatsia – Gabrovo” EAD took an independent decision to grant certain financial compensations to household customers affected by the insecure heat supply. Formally, however, breaches of the quality indicators were not found by the EWRC, which in turn raises the question of how effective the implementation of these indicators is and the extent to which they fulfill their purpose of safeguarding the interests of end users”, emphasizes Diana Kovacheva.
In conclusion, the Ombudsman is adamant that a possible termination of the license of “Toplofikacja – Gabrovo” EAD for “transmission of thermal energy” should not lead to the termination of heat supply to household customers in the city of Gabrovo.