District Heating Companies predict lower prices for heating and hot water from July 1

Heating and hot water will become cheaper from 1 July. This is what Kremen Georgiev, the chairman of the Association of District Heating Companies, predicted on May 15. According to him, the reason for the price reduction is the cheapening of greenhouse gas quotas and the price of natural gas. Meanwhile, the Energy and Water Regulatory Commission published the applications of the district heating companies sent on 31 March this year. They request an average of 23% price increase, but the figures are no longer up to date. The EWRC explained to BNT that they cannot yet comment on the applications, but they will analyse and decide in the public interest.

The district heating companies propose to increase the price of hot water and heating from 1 July by between 11% and 151%. Only Sofia and Pleven district heating companies are proposing price reductions. After Veliko Tarnovo, the biggest increase is requested by the heating companies in Vratsa and Rousse. However, it turns out that the calculations are no longer up to date.

"My forecast is that the prices of heating will be reduced from 1 July, such are the economic conditions. It will be different in each district heating company, but I cannot say by how much they will be reduced." said Kremen Georgiev, chairman of the Association of District Heating Companies.

According to Georgiev, there is no explanation why Sofia district heating company has set a price reduction, while for the Pleven heating company the reason is new technology:

"Many of the district heating companies are investing, some have introduced, others are about to introduce new capacities, only in "Sofia district heating" unfortunately it is not happening."

Five district heating companies have hidden their requests for new prices on the grounds that they are a trade secret. Of these, only the Plovdiv district heating company announced at the end of March that it would propose an increase of 13 percent.

The Energy and Water Regulatory Commission sent a written comment to BNT, explaining that at the moment they could not commit to interpreting the prices proposed by the district heating companies. The EWRC explains that so far they have proved that they protect the public interest with their decisions.

The demands for new higher prices for heating and hot water come against the background of a decreasing natural gas price. Currently it is 54.76 BGN. For comparison, the price of heating set for last year is BGN 88.12. Only in December the actual gas price is close to the forecast. On average, there is a one-quarter deviation between the real and the value set in the price.

"Gas is cheaper at the moment, it was cheaper in the previous winter than expected, but the question here is what will be the forecast for the next regulatory period when these prices will be in effect," explained Kremen Georgiev.

In their application the district heating companies have also proposed new prices for the electricity they produce. On average, they are asking for a reduction of almost 28%. Only the Rousse district heating company, which is coal-fired, seeks a 3% increase. A check on the website of the Electricity System Operator shows that as of noon nearly 5% of the electricity in Bulgaria is produced by district heating.

Images by BGNES/archive

The work of the EWRC is that if it increases the electricity prices of some district heating companies for reasons that more costs go there, this will reduce the price of thermal energy of the same district heating company", Kremen Georgiev said.

It is possible that the reduction of electricity prices produced by district heating companies will turn into an increase, and the requested increase of heating and hot water prices into a reduction. Within days, the EWRC is expected to publish the applications for new electricity prices from July.