President Radev vetoed the amendments to the Energy Act

President Rumen Radev vetoed the law, which provides for the full liberalisation of the electricity market for household consumers as of 2026. "The standard of living of the majority of Bulgarian citizens remains the lowest in the European Union, and the envisaged changes could make it even more difficult for people who already have difficulty meeting their basic living expenses," the head of state wrote in his motives on October 19.

The President noted that the adopted law has moved away from the goals of the welfare state and its adoption was not accompanied by a full impact assessment, as the necessary models and forecasts were not made, although provisions were introduced that directly affect the welfare of Bulgarian citizens and the sustainability of the energy system.

The law proposes the regulation of a transitional market model, which will enter into force in July 2024, by compensating household consumers and will be in force until the introduction of full liberalisation of the retail market, i.e. until the end of 2025, which implies the abolition of compensation for household consumers as at that date. However, there is currently still a significant price difference between the regulated and free retail electricity markets. A real rebalancing of regulated prices to bring them in line with free market prices should take place within a short period of 18 months, risking a price spike for final household customers by early 2026.

While not disputing the need for regulatory changes in line with Bulgaria's commitments to the European Union, the Head of State recalls that it is European law that allows and requires member states to protect energy-poor and vulnerable household customers. The too limited definition of energy poverty, the vagueness of the compensation mechanism and the uncertainty about the availability of sufficient funds to assist those in need do not sufficiently guarantee the achievement of this objective.

Rumen Radev warns that the deletion of the figure of the public supplier and the removal of the energy mix could cause the shutdown of electricity production from TPP Maritsa-Iztok 2 and will threaten the functioning of Maritsa-Iztok as early as the middle of next year.

"New discussion of the changes to the energy act adopted on 5 October 2023 is an opportunity for the MPs to reconsider both the parameters of the reform and the mechanisms to support those affected," he said.

Household consumers enter the free electricity market in 2026, Parliament decides