21 December 2022
Ombudsman Diana Kovacheva has sent a recommendation to Caretaker Prime Minister Galab Donev and Caretaker Minister of Energy Rosen Hristov demanding fair compensation due to the highly increased natural gas costs for all households relying on this fuel.
“It is with deep concern that I turn to you in relation to the application Bulgargaz EAD has tabled for the approval of the price of natural gas for January 2023 in the amount of BGN 204.53/MWh. This unprecedented high increase – by 38.9% in comparison to the effective price for the current month – takes place during the heating season,” the Ombudsman states.
Prof. Kovacheva notes that during the period of significantly lower regulated prices of natural gas – between BGN 102.33/MWh and BGN 162.57/MWh, from December 2021 till May 2022 there was a Government Programme in place to compensate residential consumers of natural gas and heating companies using natural gas as their main fuel providing support with a fixed amount per MWh.
She emphasises that the regulated prices of natural gas for Bulgarian consumers continue to skyrocket in the months after the end of the Programme.
“In this regard as well as in relation to the significant increase in the prices of other types of energy for households, on 01.07.2022 I turned to the Government with a recommendation to adopt urgently a new programme to compensate for some of the increased energy costs of residential consumers. It is with concern that I note that, until now, no steps are known to have been taken to resolve this pressing problem,” Kovacheva points out.
She explains that many citizens complain to the institution demanding fair support from the State on account of the extreme increase in the prices of energy sources and of natural gas in particular.
“Further to my opinion tabled during the Public Discussion of the Draft Decree on measures to implement Council Regulation (EU) 2022/1854 of 6 October 2022 on an emergency intervention to address high energy prices, I call on you to draft and apply as quickly as possible a government programme to compensate for the high energy costs of residential customers of natural gas,” the Ombudsman writes. She also insists that the scope of customers entitled to compensations should include households in condominium residential buildings with local gas boilers which, so far, have not received financial support from the State.
The Ombudsman also emphasises that the extremely high prices of natural gas increase significantly the costs of heating companies which use this type of fuel and if they do not receive government support to cover the differences, the Energy and Water Regulatory Commission will need to include these unprecedented high costs in the prices of heat energy for end customers as of 1 July 2023.
“I am definitely of the opinion that this financial burden should not be passed on down to the residential consumers of heat energy taking into account that the prices and bills for heat energy are on the edge of affordability even now,” the Public Advocate points out.
Earlier this month Ombudsman Diana Kovacheva sent another opinion to Caretaker Prime Minister Galab Donev demanding urgent support for all residential customers of energy – the reasons was the publication for a public discussion of the Draft Decree on measures to implement Council Regulation (EU) 2022/1854 of 6 October 2022 on an emergency intervention to address high energy prices.
In her opinion, she emphasises her concern that end residential customers of energy have been omitted altogether from the Draft Decree as possible recipients of financial funds from the solidarity contribution payable from the surplus revenues of the obligated energy companies.
“The end residential customers of electricity, heat, natural gas, automobile fuels and solid fuels for heating have been bearing the brunt of the record-high energy prices for more than a year. At the same time, I expect guarantees that the Government will not allow any conflict between the compensations for households and those for economic subjects,” the Public Advocate pens.
Prof. Kovacheva calls for provisions in the Draft Decree for the support to alleviate the consequences of the high energy prices – for end residential customers and for vulnerable households in particular. To this end, she suggests three specific possible approaches.
The first one is to use a part of the financial resources made up by the earmarked contributions under the Regulation to pay government support to all households in relation to the high inflation rate resulting from the extreme prices of energy resources.
The second one is to target the support at energy-poor households.
“In view of the progress in elaborating a definition of “energy poverty” and of criteria to identify the households in a situation of energy poverty, I believe it is appropriate that they should be included in the regulatory framework and be used to determine the scope of households which will be entitled to receive support under Council Regulation (EU) 2022/1854,” the Ombudsman comments.
The third approach suggested by Prof. Kovacheva is only in case the executive is unable to propose a comprehensive solution in a short time – to allow the option for a decision of the Council of Ministers to extend a lump-sum financial support for heating in the current winter season 2022-2023 for the vulnerable groups as they are already identified.
Kovacheva also lists them – persons and families supported under Ordinance RD-07-5 of 2008 on the Terms and Procedure to Extend Targeted Heating Support; mothers (adopters) who receive monthly benefits for children up to the age of 1 under Article 8 (1) and (5) of the Family Benefits for Children Act; persons and families who are recipients of lump-sum support for students enrolled in the first grade under Article 10а of the Family Benefits for Children Act; persons with disabilities of more than 90 per cent and low personal income from pensions who receive monthly financial support under Article 70 of the Persons with Disabilities Act; persons and families who receive monthly support for children with permanent disabilities under Article 8e of the Family Benefits for Children Act and under Article 8f of the Family Benefits for Children Act; persons and families who are recipients of lump-sum or monthly support for prevention and reintegration, children raised by relatives and kin and in foster families under the terms and procedure laid down in the Implementing Regulations to the Social Assistance Act; persons and families who are victims of disasters and accidents in force majeure circumstances receiving lump-sum support under Article 16 of the Implementing Regulations to the Social Assistance Act based on the level of material deprivation.
In her opinion, Prof. Kovacheva emphasises the lack of specifics as regards the future programmes for spending the revenues as an essential omission.
Another deficiency in the Draft Decree identified by the Ombudsman is the full focus on the electricity sector. Thus, in practice, it completely lacks any actions under Chapter Three on Measures concerning the crude petroleum, natural gas, coal and refinery sectors.
“I am certainly of the opinion that such measures need to be developed in the shortest time,” Diana Kovacheva emphasises.
Referring to the main goal of Council Regulation (EU) 2022/1854 for “an emergency intervention to address high energy prices,” Diana Kovacheva extends the recommendation that the programmes to spend the revenues should be developed and presented for public discussion sufficiently early in view of the deadlines for implementation and reporting by the Member States set out in Council Regulation (EU) 2022/1854.