News

28 February 2024

Ombudsman Diana Kovacheva approached Ivan Ivanov, Chair of the Energy and Water Regulatory Commission (EWRC) to bring to him the numerous complains of household customers against the excessively high monthly heating bills during the current heating season 2023-2024.

Prof. Kovacheva emphasizes that the examination of the documents submitted by citizens shows that the main reason for the inflated bills is the unprecedented high heating tariff as approved by the EWRC for the period under regulation 1 July 2023 – 30 June 2024.

The Ombudsman gives as an example the customers of the Sofia District Heating Company who are currently paying an unprecedented highest regulated price for their heating – BGN 137.93/MWh (excluding VAT) while the price of natural gas from the public supplier is BGN 71.08/MWh (excluding VAT) for February 2024.

This provided Prof. Diana Kovacheva, further to her other recommendation of 19 December 2023, with a reason to draw again the attention of the EWRC to the need for an urgent review and reduction of the regulated prices of central heating.

She adds that as of 1 March 2024 the requirements will be met as laid out in § 1, point 20 of the Additional Provisions of Ordinance No. 5 on the regulation of heating prices regarding the existence of “a substantial change between the estimated price of natural gas as determined by the EWRC for the regulatory/price period compared to the achieved and estimated price for the remaining term of the period” in an amount exceeding 15%.

The Ombudsman emphasizes that the EWRC data give an estimated price of BGN 88.12/MWh for natural gas in the period 1 July 2023 – 30 June 2024. The accounted prices of the blue fuel in the third quarter (Q3) in 2023 were BGN 61.20/MWh, in Q4 2023 – BGN 76.68/MWh, in Q1 2024 – BGN 70.36/MWh (in January – BGN 77.60/MWh, in February – BGN 71.80/MWh and the EWRC forecast for March – BGN 62.39/MWh).

“According to your data, the estimated price for Q2 2024 is BGN 83.79/MWh. Thus the prices achieved and the estimate for the last quarter of the regulatory period give an average natural gas price of BGN 73.01/MWh which is 17.15% lower than your estimated price for the whole regulatory period 2023-2024 of BGN 88.12/MWh,” the Ombudsman writes.

Diana Kovacheva emphasizes that on the European Energy Exchange (ЕЕХ) the prices of the carbon emissions (CO₂ quotas) are likewise significantly lower than the EWRC estimated EUR 88.00/ton.

The Ombudsman writes that according to the EWRC data, the average price of the quotas for Q3 and Q4 in 2023 (until 18 December 2023) was EUR 80.53/ton and since then there has not been a single day when the quota prices exceeded EUR 83/ton. Moreover, there is a persistent downward trend to about EUR 55/ton approximately (data as of 26 February 2024).

“I have to draw attention to the fact the in view of the above-stated, in the current heating season 2023-2024 household customers of the district heating companies bear an excessive financial burden in consequence of the prices of heating that are now valid as approved by the EWRC. In addition, this gives the impression that the regulated prices are intensely moving away from the major economic factors that should determine them, viz.: the prices of natural gas as the main fuel and the exchange prices of the CO₂ quotas,” the Ombudsman summarizes and insists on a timely analysis and a comprehensive assessment that lies within the competence of the EWRC for the fastest possible reduction of the regulated prices of heating before the end of the price period.

“It is my firm conviction that when consumer prices are fixed for a long period at the highest ever levels, the customers need a dynamic examination of the factors for price reduction in the EWRC decisions, and not a long-lasting burden of unbearable prices,” the Ombudsman emphasizes and insists on a retroactive reduction of the regulated prices of heating – from 1 January 2024.

Further Diana Kovacheva emphasizes that she is still waiting for information from the Commission about the inspection of the Sofia District Heating Company (Toplofikatsia Sofia) with a deadline 30 September 2023 to check the settings of the automatic regulation system and, if necessary, to check all substations, interconnected to the heating transmission infrastructure all over Sofia and to align them to the heat pipes of the building in order to ensure the needed microclimate and to prevent the overconsumption of heat.