Competition Protection Commission imposes further penalty on electricity sector

In November 2013 the Competition Protection Commission imposed a penalty of Lev1,034,755 (approximately €529,062) on Energy Pro Grids AD – the electricity distribution company for Northeastern Bulgaria – for disproportionate management of production capacities which were joined to its distribution grid.

The investigation was initiated by a producer of electricity from renewable sources which was joined to the Energo Pro distribution grid. During the investigation the commission found that Energo Pro (as the electricity distributor) was obliged to limit electricity production when it was ordered to do so by the electricity system operator ESO EAD (a state-owned company performing the general operational planning, coordination and control of the Bulgarian electricity system). The limitations were necessary for the security of the Bulgarian electricity system. However, the commission established that Energo Pro allocated the limitations among the electricity producers which were joined to the Energo Pro's grid on a basis of non-transparent and discriminatory criteria. This meant that Energo Pro put other electricity producers at a disadvantage.

According to the commission, Energo Pro's unilateral behaviour violated competition on the electricity market because it impeded certain category electricity producers from producing and selling their own electricity. Further, it indirectly harmed final consumers because they could not benefit from the competition or diversification of the electricity sources in the long term.

As well as the penalty imposed on Energo Pro as a behavioural remedy, Energo Pro was obliged to manage the production capacities of the different electricity producers joined to its grid in a non-discriminatory manner and to limit them on ESO's orders proportionately.

For further information on this topic please contact Ilko Stoyanov or Mariya Papazova at Advokatsko Druzhestvo Andreev Stoyanov & Tsekova in cooperation with Schönherr Rechtsanwälte GmbH by telephone (+359 2 933 1072), fax (+359 2 986 1105) or email (i.stoyanov@schoenherr.bg or m.papazova@schoenherr.bg). The Advokatsko Druzhestvo Andreev Stoyanov & Tsekova website can be accessed at www.schoenherr.eu.