Alexander Galendinov[1]

The application of EU State aid rules in the Bulgarian energy sector continues to attract attention. In particular, in June 2015, following the adoption of the European Commission’s Guidelines on State aid for Environmental protection and Energy (2014 Guidelines), the Bulgarian authorities issued a draft-ordinance concerning aid in the form of reduction of “green electricity” support for energy intensive users (EIU). The ordinance contains the list of eligible sectors contained in Annex 3 of the Commission’s Guidelines while specifying that the beneficiaries will be paying as much as 15% of the additional costs. In addition, the ordinance explicitly provides that its entry into force is subject to the approval of the European Commission. The explicit reference to the notification obligation made by the Bulgarian authorities may be regarded as an important progress in itself considering the allegedly non-notified status of the whole Bulgarian renewable energy legislation.

Although the ordinance seems to be prima facie in compliance with the provisions of the 2014 Guidelines, there is a risk that the ordinary, non-energy intensive users, may be adversely affected by the measure given that their electricity bills might increase as a result in order to compensate for the reductions granted to the energy intensive users. Considering the tense socioeconomic context in Bulgaria and the general dissatisfaction with the raising utility prices in particular, the Bulgarian authorities could have chosen a more cautious approach where reductions for EIU are introduced in a gradual manner.

Another issue concerning the application of EU State aid rules in the Bulgarian energy sector relates to the recently adopted amendments to the Bulgarian Energy Act envisaging the establishment of the so-called “Electricity System Security Fund”. The Fund is a public entity entrusted with the specific task to curb the deficit at the National Electric Company (NEK), resulting from the latter’s obligations, under Bulgarian law, to purchase the entire quantity of electricity from renewable energy sources produced in Bulgaria on preferential rates. As to the resources of the Fund, they will be provided through compulsory contributions from electricity producers and electricity traders amounting to 5% of their monthly revenues.

However, the newly created Fund seems to constitute State aid within the meaning of Article 107(1) TFEU. More specifically, it is argued that the Fund operates with resources remaining under the control of the public authorities, while granting a selective advantage to a specific undertaking which threatens to distort competition and affect trade between Member States. In addition, the Fund doesn’t seem to fulfil the criteria laid down in the Altmark judgment. In the light of the above, the legislative amendments which created the above mentioned Fund, should have been notified, prior to their implementation, to the European Commission pursuant to Article 108(3) TFEU.

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Линк към статията на български език: ДЪРЖАВНИ ПОМОЩИ В БЪЛГАРСКИЯ ЕНЕРГИЕН СЕКТОР:  НОВИ ВЪЗМОЖНОСТИ, СТАРИ ПРЕДИЗВИКАТЕЛСТВА

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[1] Case handler at the Bulgarian Competition Authority, Master in Laws from the University Paris 1 Panthéon-Sorbonne, Postgraduate diploma in EU Competition law from King’s College London.