AOBR INSISTS ON NOT EXTENDING THE TRANSITION PERIOD FOR SELECTING A NEW ELECTRICITY SUPPLIER

TO

Mr. VALENTIN NIKOLOV

CHAIRMAN OF

ENERGY COMMISSION

44TH NATIONAL ASSEMBLY OF

REPUBLIC OF BULGARIA

Subject: Request for a new extension of the transitional period for the selection of a new electricity supplier.

DEAR MR. NIKOLOV,

As you know,the energy sector and its market functioning is one of the most important priorities of ABEO, so we strictly monitor every action in it and respond in defense of consumer companies. Unfortunately, the attempts to delay the reforms have not stopped. We consider the request for a new extension period for the selection of a new supplier outrageous. This is just a further postponement of the full liberalization. The foreseen free of charge period of 9 months for finding a new electricity supplier by business customers "low voltage" is sufficient. The period should not be extended for the following reasons:

1. In previous stages of liberalization, such as the release of medium-voltage business customers, no smooth entry into the market was taken into consideration.
2. The extension of the "free of charge period" creates conditions for the retention and the increase of market shares by final suppliers, even in their capacity as traders under standard contracts, and does not give the customer the incentive to look for alternative suppliers. A situation is created in which "low voltage" customers remain with the understanding that they have been moved "officially" to the free market, which influences their behavior. A new time window opens for end suppliers to be able to easily transfer and retain their customers.
3. In addition, the EWRC's bid comparison platform should be operational and the institutions should have actively and adequately conducted the information campaign.
4. The small number of "low voltage" customers who have changed their supplier may be due to the understanding of "official" change of the segment (we remain with the old supplier, only the price is different). With the extension of the "transitional period", the problem will shift by another year, as the impression of the "servitude" of free market participation will be strengthened.
5. There is no equality between customers, as "high voltage" and "medium voltage" consumers automatically switch to last-instance delivery when they are left without a supplier, even if it is not their fault. At the same time, low-voltage customers who have chosen another supplier would also be subject to a last-instance supply hypothesis if they were left without a supplier before the expiry of the grace period because they terminated the standard contract with the final supplier. This also creates inequalities between "low voltage" customers and the market approach is not encouraged, as most consumers are likely to "play it safe" by postponing the free choice of supplier until the last possible moment.
6. It is the client's responsibility to be informed about the opportunities and risks provided by the free market. The role of the institutions in this case is to provide adequate and timely information to market participants, and not to create legislative protection for an entire segment of consumers and to create conditions for artificial retention of market shares of specific suppliers.

WITH RESPECT,

VASIL VELEV

Chairman of the Management Board of BICA

and Chairman of ABEO for 2021,

by order of BICA, BIA, BCCI and CEIBG