Electricity Prices Surge in Eastern Europe, Sparking Public Outcry
Eastern European consumers are bracing for a significant increase in electricity costs, effective January 1st, following a decision by the Energy and Water Regulatory Commission (KEVR). The price hikes, averaging 8.42% for households, are substantially impacting citizens already reeling from recent power outages.
The increases vary slightly depending on the supplier: Electrohold customers face an 8.36% jump, EVN customers see an 8.39% rise, and Energo Pro customers experience an 8.55% increase. These figures encompass network service charges.
The primary driver behind this price surge is a dramatic increase in the projected annual market price for electricity – a jump from BGN 173.09/MWh to BGN 212.12/MWh, representing a more than 23% increase. KEVR is legally obligated to adjust prices when the difference exceeds 15%.
Adding to the pressure on household budgets, the public supplier faces higher costs due to increased electricity demands for the regulated market, reaching 927,000 MWh. A substantial portion of this increased demand will be met by TEC maritsa Iztok 2 EAD, which sells electricity above market rates.
The energy regulator explained the situation in a statement: “An additional factor regarding the change in favorable prices for electric energy and the prices of producers of electric and thermal energy is the need to update the price of natural gas, achieved and assessed for the remaining period. more than 17% higher than the estimated price determined at the beginning of the price period.”
The timing of this price increase is particularly sensitive, coming on the heels of widespread power outages during the Christmas holidays that left thousands of homes without electricity for days. Citizens are directing their anger towards electricity distribution companies, while energy experts warn that artificially suppressing electricity prices leads to underinvestment in grid infrastructure, increasing the risk of future disruptions.
Public frustration boiled over into protests. Residents in affected areas blocked the Sofia-Veliko Tarnovo road for an hour, and on December 30th, citizens demonstrated outside the KEVR building to voice their opposition to the price hikes.
Natural Gas Prices Also Climb
Adding insult to injury, the KEVR also confirmed an 8% increase in natural gas prices for January, setting the price at BGN 81.94/MWh (excluding access, distribution, excise tax, and VAT). While slightly lower than the initial projection by Bulgargaz (BGN 83.16/MWh), this still represents a 7.97% increase compared to December.
The price incorporates Azeri natural gas delivered via the Bulgaria-Greece Interconnector (IGB) under a long-term contract. KEVR highlights the importance of these quantities in securing favorable pricing for Bulgarian consumers. Bulgargaz also secured two liquefied natural gas (LNG) supply contracts through an auction, ensuring a minimum delivery price and a structured payment plan from the Chiren gas storage facility.
The combined impact of rising electricity and natural gas prices is expected to significantly strain household budgets across the region, raising concerns about the affordability of essential utilities and the potential for social unrest.
