News

5 July 2023

“The proposed amendments and supplements to the Regulation on water supply and sewer services prices (“the Regulation”) do not accord sufficient protection of consumers’ rights and fail to strike a balance between the interests of water supply and sewerage operators and those of consumers. Besides, according to the proposed amendments, the prices of water supply and sewerage services shall not be conditional on meeting the quality indicators, which is essential to be envisaged”, the Ombudsman Diana Kovacheva stated in her opinion to the Energy and Water Regulatory Commission (“the Regulatory Commission”) on the Council of Ministers bill amending and supplementing the Regulation on Water Supply and Sewer Services. The opinion was presented today during a public session of the Regulatory Commission by Mrs Tsvetanka Ilieva, expert with the Ombudsman institution.

Prof. Kovacheva further insists that the controversial provisions be reviewed.

The Ombudsman reiterates that every time water prices have been discussed she has paid special attention to the amounts of electric power compensations received by the Water Supply and Sewerage operators which however are not taken into account in the average price formation in the business plans.

Therefore the public defender is of the opinion that the costs actually incurred by the water supply and sewerage operators for the purchase of electric power at the free market are reflected yearly, account being held however of the compensations received and how the approved yearly target levels for water supply and sewerage services are met.  

“Regarding the definition of inflation set forth in Article 6, item 2 of the bill, I believe it is incorrect to alter prices by the inflation rate according to the monthly index of consumer prices. Accumulation of month-to-month inflation from the first price period to the date of recalculating the amended price in 2024, as well as the next years of the price period will significantly increase the price of water supply and sewerage services as the inflation rate for the last year is quite high”, the Ombudsman states.

Diana Kovacheva proposes to consider amending by the average annual inflation rate only some of the costs included in the price such as those earmarked for investments, repairs, and current maintenance. However, she insists that costs for wages, depreciation costs and costs for electric power be excluded: costs for wages are indexed by 15 pct. annually, while electric power is traded on an exchange and hence the price is determined at the exchange.

Prof. Kovacheva is clear in her opinion that a time limit should be set for consumers to have the opportunity to acquaint themselves with proposals by water supply and sewerage operators for change of prices as well as for reviewing such proposals. Therefore, she strongly opposes repealing the “one-month period”, “two-week period” and “in an appropriate manner” in Article 18 and Article 31, para 3 of the bill.

“Repealing those requirements on grounds that are “aggravating” and “causing undue delays” is incomprehensible, to say the least, and violates citizens’ right to information”, the Ombudsman points out.

Diana Kovacheva further reiterates that the amendments she has been continuously insisting on over the years have not been included in the bill – that each time water prices are determined, the investment costs should be taken into account as well as how the efficiency indicators are met, including as regards the social tolerance analysis pursuant to Article 29, para 3 of the Regulation on water supply and sewer services prices in case there is no public information about the average income in regions where the error is above 15.1 pct.

“Judging from information on the website of the National Statistical Institute, data for the general income over the period 2018-2022 is missing for the regions of Lovech and Montana (for 2018, 2019, 2020, and 2021), and for the regions of Vratsa, Razgrad, Dobrich, Targovishte and others for 2022. The National Statistical Institute cannot provide genuine data about the income by regions due to a high degree of deviation, yet the data is still used to calculate the level of social tolerance. However, the Energy and Water Regulatory Commission does not offer a solution to this problem”, the Ombudsman points out.