Energy sector on Competition Protection Commission's radar

On March 27 2013 the Commission for the Protection of Competition announced that it has extended the scope of the ongoing sector inquiry into the supply and distribution of gas in the production, trade, transmission and electricity supply markets. In the extended inquiry the commission will analyse the level of transparency in price formation in the electricity sector where regulated tariffs are applied. Further, the inquiry will identify possible vertical restraints applied in the sector, as well as eventual problems on the downstream market occurring in the relationships between electricity distributors and end consumers.

The sector inquiry will also be part of a commission-run project which studies the structure and competition environment in the electricity sector. The project is intended to support the implementation of the EU Third Energy Package by developing possible competitive models for the electricity sector post-implementation.

On March 28 2013 the commission conducted a dawn raid in the offices of certain companies within the economic groups of EVN, CEZ and Energo-Pro – electricity distributors in Bulgaria - as well the Association of Traders with Electricity in Bulgaria and the Institute for Energy Management Association. The dawn raid was initiated by the commission based on signals for coordinated practices between electricity distributors which prevent end consumers from switching from one electricity distributor to another. The commission opened an investigation and received permission from the Sofia Administrative Court to conduct the dawn raid. The commission's investigation will establish whether the companies have conducted the alleged coordinated behaviour, and have thus infringed Bulgarian and European competition law.

These actions were undertaken immediately after wide public discussion in February 2013 about the quasi-monopoly position of electricity distributors in Bulgaria and its eventual abuse due to high electricity prices for end consumers.

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).