Energy and Water Regulatory Commission (EWRC)

Bulgaria

Annual Report
to the European Commission

July 2023
TABLE OF CONTENTS

LIST OF ABBREVIATIONS

1. FOREWORD 4

2. MAIN DEVELOPMENTS IN THE GAS AND ELECTRICITY MARKETS 6

2.1. Evaluation of the market development and regulation 7
2.2. Report on the implementation of the Clean Energy Package 12

3. ELECTRICITY MARKET 12
3.1. Networks regulation and technical functioning 12
3.1.1. Unbundling 12
3.1.2. Network extension and optimization 12
3.1.3. Network tariffs 13
3.1.4. Security and reliability regulation 16
3.1.5. Monitoring balance of supply and demand 17
3.1.6. Cross-border issues 19
3.1.7. Implementation of Network Codes and guidelines 22
3.2. Competition and market functioning 23
3.2.1. Wholesale markets 23
3.2.2. Retail market 30
3.2.3. Consumer protection and dispute settlement 32

4. NATURAL GAS MARKET 34

4.1. Network regulation 34
4.1.1. Network and LNG tariffs for connection and access 35
4.1.2. Balancing 36
4.1.3. Cross-border issues 36
4.1.4. Implementation of Network Codes and guidelines 37
4.2. Competition and market functioning 40
4.2.1. Wholesale markets 43
4.2.2. Retail market 49
4.2.3. Monitoring the level of prices, the level of transparency, the level and
effectiveness of market opening and competition 52
4.2.4. Consumer protection and dispute settlement 54
4.3. Security of supply (if and insofar as NRA is competent authority) 59

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LIST OF ABBREVIATIONS

ACER Agency for the Cooperation of Energy Regulators

AAS of EA Act on the Amendment and Supplement of the Energy Act
BETP AD Bulgarian Energy Trading Platform AD
BGH EAD Balkan Gas Hub EAD
CCP Commission for Consumer Protection
CCR SEE Capacity Calculation Region South East Europe
CDM Central Dispatching Management
CDP Commercial Dispatching Platform
CEER Council of European Energy Regulators
CPC Competition Protection Commission
CS Compressor Station
DAM Day-Ahead Market
DSO Distribution System Operator
EA Energy Act
EMR Electricity Market Rules
ESO EAD Electricity System Operator EAD
ESSF Electricity System Security Fund
ЕPS Electric power system
ERSA Energy from Renewable Sources Act
EWRC, Regulator Energy and Water Regulatory Commission
GRP Gas Release Program
GTN Gas Transmission Network
GTTN Gas Transit Transmission Network
HECG High-efficient cogeneration
IBEX EAD Independent Bulgarian Energy Exchange EAD
IDM Intraday Market
ITО Independent Transmission Operator
NGMBR Natural Gas Market Balancing Rules
NGTN National Gas Transmission Network
NGTR Natural Gas Trading Rules
OEPR Ordinance №1/2013 on electricity price regulation
OLAES Ordinance №3/2013 on licensing the activities in energy sector
ONGPR Ordinance №2/2013 on natural gas price regulation
PCI Project of common interest
PEOR Power Exchange Operational Rules
PPAT Persons professionally arranging
RAS of PEOR Rules Amending and Supplementing the Organized Power
Exchange Operational Rules
REMIT Regulation (EU) No. 1227/2011 of the European Parliament and of
the Council of 25 October 2011 on wholesale energy market
integrity and transparency
RMESOCP Rules of maintaining electricity supply offers comparison platform
SEEGAS South-Eastern and Eastern European gas market
SDAC Single Day Ahead Coupling
SLP Standardized Load Profiles
SLR Supplier of Last Resort
TSO Transmission System Operator
VTP Virtual trading point
WPP Wind power plant
UMM Urgent Market Messages
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 1. FOREWORD

EWRC's priority in the electricity sector in 2022 was to minimize the effects of the drastic
spike in electricity and natural gas prices caused by the ongoing military conflict and the COVID-19
pandemic. The economic and geopolitical consequences for Bulgaria and Europe have necessitated
the need to provide alternative suppliers of energy resources.

In order to meet the challenges, EWRC has taken a number of important steps. Amendments
and supplements have been adopted to the Electricity Market Rules and to Power Exchange
Operational Rules, which have reformed the balancing services market. A 15-minute settlement
interval and 15-minute intraday market trading products have been introduced. The amendments led
to a fairer distribution of imbalances costs among trading market participants and to achieving
energy supplies at minimum costs. The new regulatory framework contributes to the fulfilment of
the EU main goal in the electricity sector - the creation of a fully functioning and interconnected
internal energy market, contributing to the security of energy supplies, increasing competitiveness
and ensuring the possibility for all consumers to purchase energy at affordable prices. The
amendments gave an impetus to the EU balancing markets coupling and created additional
opportunities for the exchange of balancing services, as well as to increase the operational security
of the electricity system.

In its pricing decisions during the period, EWRC has consistently applied a balanced and
conservative approach to avoid sudden price changes, considering the interests of all participants.
Electricity tariffs for the regulated market in 2022 remained without significant change – prices for
household customers increased by 3.4%. In order not to create financial losses for balancing service
providers, EWRC continued to apply the approach adopted in 2021 in determining the threshold
price for transactions in the balancing energy market for downward regulation. The price of this
energy was tied to hourly electricity prices achieved in the day-ahead market and to the regulated
price of producers participating in the public supply mix.

In 2022, the Regulator's efforts in the natural gas sector aimed at ensuring the required
quantities for the country's needs and controlling the sharply rising prices of natural gas due to the
suspension of supplies from Russia. As a result of the emergency measures at national and European
level, natural gas prices in the last months of 2022 began to normalize. An important role for that
was played by the high filling levels of gas storage facilities, the supply of liquefied natural gas
(LNG) and the decline in consumption. After the suspension of supplies under the long-term contract
with OOO Gazprom Export in April 2022, our country began to provide alternative routes and
natural gas supplies. The necessary alternative consumption quantities have been agreed upon and a
gas crisis has been avoided. EWRC included these quantities in the price mix when approving the
gas price for the respective months.

In crisis conditions with troubled supplies and high prices, the interconnection gas pipeline
IGB Bulgaria – Greece’s entry into commercial operation on 1 October 2022 was of key importance
for ensuring most favourable prices for Bulgarian consumers. EWRC made its significant
contribution in that matter by adopting important regulatory decisions in an extremely short period
of time, which fulfilled the necessary requirements and created the legal possibility for the lounge of
the interconnector. Via the new interconnector Bulgaria began to receive the agreed quantities of 1
billion cubic meters per year from Azerbaijan at competitive prices. Those quantities, covering
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National Report 2022 Energy and Water Regulatory Commission, Bulgaria
nearly one third of the country's needs, had a favourable effect on the price mix approved monthly
by EWRC.

In parallel with the adoption of the price decisions, the Regulator continued to issue licenses
for trading in natural gas. In 2022, 31 traders were granted a license, bringing their total number to
75. The increased number of participants increased liquidity and competition in the natural gas
market.

Assoc. prof. Ivan N. Ivanov, PhD

Chairman
Energy and Water Regulatory Commission

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 2. MAIN DEVELOPMENTS IN THE GAS AND ELECTRICITY MARKETS

In 2022 the Regulator’s efforts in the electricity sector were aimed at mitigating the
consequences of the drastic surge in electricity prices on the free market.

In its pricing decisions, EWRC continued to apply a balanced approach and did not allow
drastic price changes. In 2022 the weighted average increase in total electricity prices for household
customers on the regulated market amounted to 3.40%.

Heating energy prices with average 29.73% increase compared to 2021-2022 season were
approved. That was mainly due to the preferential electricity prices of the heating companies and the
increased costs of fuel and heat energy transmission. With the heat energy VAT reduction from 20%
to 9%, the real price increase was reduced to 17.84%.

Regarding control activities, in 2022 EWRC continued the activity of approving general
terms and conditions of energy companies with the aim of bringing them into line with the changes
in the regulatory framework. In accordance with the established practice, the Regulator carries out
checks on each received signal of violation of the license obligations. In terms of complaints
handling and work with consumers, EWRC undertakes strict control measures to comply with the
statutory deadlines for examining and resolving disputes and to improve communication between
customers and suppliers.

In 2022, a 15-minute settlement period was introduced in the balancing energy market in
accordance with the requirements of Regulation (EU) 2019/943 of the European Parliament and of
the Council of 5 June 2019 on the internal market for electricity. The aim of these amendments is to
enable market participants to self-balance as close to real-time as possible according to the closing
hours of the balancing energy market. That would facilitate the operation of the electricity exchange
market in the intraday market segment. By introducing a shorter settlement period, support would
also be provided for the trading activity of the intraday electricity exchange market, and the
development of a range of trading products with uniform delivery time intervals would be
encouraged as well.

The global natural gas market experienced a major upheaval in 2022 as Russia significantly
cut pipeline supplies to Europe, putting unprecedented pressure on supplies and triggering a global
energy crisis. That had a strong impact on natural gas prices, which reached record high levels in the
European Union and Bulgaria. The price of Europe’s largest and most liquid gas hub, the Dutch Title
Transfer Facility (TTF), which alone accounts for almost 90% of total gas trading volume, hit a
record high of €346/MWh in August 2022. The natural gas price in Bulgaria also reached record
levels, with the highest price of BGN 353.21/MWh approved by EWRC for Bulgargaz EAD in
September 2022. Nevertheless, European countries managed to fill their underground gas storages
well above historical averages, supported by a combination of targeted policy measures, record LNG
volumes and a sharp drop in consumption. At the end of December 2022, record high temperatures
were recorded, which led to significantly lower natural gas prices compared to previously reached
record levels.

Until 27th April 2022, the main natural gas quantities for Bulgaria were provided by imports
from the Russian Federation under the long-term contract between Bulgargaz EAD and Gazprom
Export and after that date the Russian supplier stopped supplying natural gas to Bulgaria.

After the suspension of natural gas supplies, Bulgargas EAD secured alternative supplies for
Bulgaria from various traders in order to ensure the natural gas quantities requested by its customers
mainly through supplies of liquefied natural gas.
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 In 2022 Bulgargaz EAD provided natural gas quantities also from Azerbaijan imports
according to a concluded long-term contract with an Azerbaijani company and until the end of
September, due to the unfinished construction of the interconnection gas pipeline Bulgaria - Greece
(IGB), these deliveries were made at Nea Mesimvria delivery point - interconnection point of the
Trans-Adriatic Gas Pipeline (TAP) and the Greek gas transmission network on the territory of the
Hellenic Republic. To deliver Azeri quantities to Bulgaria, transmission was carried out through the
Greek gas transmission network from Nea Mesimvria delivery point to Kulata/Sidirokastro – an IP
of the Bulgarian and Greek gas transmission networks. The delivery point in the concluded contract
between Bulgargaz EAD and the Azerbaijani company is the interconnection point of TAP and IGB.
Azeri quantities delivery to Nea Mesimvria IP was carried out under conditions different from those
in the contract between Bulgargaz EAD and the Azerbaijani company. From the beginning of
January till the end of June 2022 the Azeri quantities were delivered in a reduced volume at a price
different from that in the contract between the two companies, due to the fact that they were not
delivered through the IGB interconnector as its construction was unfinished. In the period from the
beginning of July to the end of September, the gas quantities were delivered in full volume, but
again and for the same reason at a different price compared to the one in the contract between the
two companies. On 1st October 2022 with IGB entry into commercial operation Bulgaria began to
receive the full agreed Azerbaijani natural gas quantities at the amount of 1 billion cubic meters per
year at a price determined in the contract between Bulgargaz EAD and the Azerbaijani company.
IGB is of key importance to increasing security of supply and ensuring diversification of natural gas
sources for Bulgaria, Greece and the South East Europe region. IGB enables secure deliveries from a
variety of sources to a number of countries in Central and South-Eastern Europe and the Western
Balkans, with the possibility of deliveries to Moldova and Ukraine as well. EWRC role in the IGB
commissioning was also of key importance as the Regulator adopted several important decisions that
fulfilled the necessary regulatory requirements and created the legal possibility for the gas
interconnector with Greece to enter into operation on 1st October. By its decision EWRC gave
permission to start IGB licensing activity and approved ICGB AD business plan for the period 2022
– 2026 as an integral part of the license. EWRC and RAE (the Greek Energy Regulatory Authority)
jointly adopted a final joint Decision on the certification of ICGB AD as an independent natural gas
transmission operator; a Decision to approve changes to IGB Network Code and its applications,
including Tariff Code and Gas Transmission Agreement; a Decision to change the date of
commercial operation of the gas pipeline from 1st July to 1st October 2022, which was required given
the delay in of IGB construction; a Decision to approve the Methodology for determining a daily fee
for imbalance in the Greece – Bulgaria interconnection.

Natural gas quantities have been supplied to Bulgaria both by Bulgargaz EAD and by other
natural gas traders through IGB gas pipeline, which contributed to the diversification of natural gas
supplies.

2.1. Evaluation of the market development and regulation

In 2022 EWRC took the necessary actions to develop and improve the secondary legislation
in accordance with its legal powers and considering the dynamically developing public relations in
the energy field. The purpose of that activity was for EWRC acts to comply with the national and
European legislation in the relevant areas, to create conditions for the electricity markets
development, as well as to overcome problems identified in the practice of applying EWRC acts.

In 2022 EWRC adopted the following secondary legislation acts:

Ordinance amending and supplementing Ordinance No. 3 of 21 March 2013 on
licensing the activities in the energy sector, promulgated, SG No. 25 of 29 March 2022, in force
as of 29 March 2022 (OAS of OLAES).
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National Report 2022 Energy and Water Regulatory Commission, Bulgaria
 With a view to clarifying the provisions of Ordinance No. 3 of 2013 on licensing the
activities in the energy sector (OLAES), regarding the obligation of market participants to keep a log
of concluded transactions with wholesale energy products, a procedure was initiated in 2022 for the
adoption of Ordinance amending and supplementing Ordinance No. 3 of 21 March 2013 (OAS of
OLAES).

The OAS of OLAES aims to introduce clear rules on the type and nature of information to be
kept by market participants and to remove the duplicative function of keeping a log of information
reported to the Agency for the Cooperation of Energy Regulators. Thus the additional administrative
burden for market participants has been removed and their financial expenses have been reduced.
Next, with the adopted amendments and additions to OLAES, regulatory conditions have been
created for the accurate implementation of the Energy Act (EA), Regulation (EU) No. 1227/2011,
Commission Implementing Regulation (EU) No 1348/2014 of 17 December 2014 implementing
Article 8(2) and (6) of Regulation (EU) No 1227/2011 of the European Parliament and of the
Council on trading market integrity and transparency wholesale energy with regard to data reporting
(Implementing Regulation (EU) No. 1348/2014), Directive 2009/72/EC, Directive 2009/73/EC and
Directive (EU) 2019/944. By establishing clear and precise requirements for the type and method of
storage of information in accordance with the mentioned acts, it will be possible for EWRC to
receive information in a timely manner when examining specific cases in which there is a suspicion
of a violation of Art.3 and Art.5 of Regulation 1227/2011, thereby achieving the goal of the law and
European legislation for the Bulgarian energy market to function on a competitive basis and to be an
indivisible part of the single energy market in the European Union.

Rules amending and supplementing the Power System Management Rules promulgated
SG No. 62 of 5 Aug 2022, in force as of 5 Aug 2022 (RAS of PSMR)
The need to adopt RAS of PSMR was determined by the requirement for the said Rules to be
brought into compliance with the Act on amendment and supplement to the Energy Act (AAS of
EA, promulgated SG No. 9 of 2021) and with the European Union legislation in the field, as well as
the established incompleteness and inaccuracies in the current version of the rules. Provisions in
chapters one, two and three of the PSMR have been amended.

The amendments and additions in PSMR chapter four aim at compliance of the conditions
and manner of using the electricity transmission network, as well as the provision of ancillary
services and receiving of system services with EA and Commission Regulation (EU) 2017/2195 of
23 November 2017 establishing guidelines for electricity balancing (Regulation (EU) 2017/2195).

With the amendments in chapter five and chapter six, necessary prerequisites have been
created in terms of the technical requirements under which the electricity transmission network
operator concludes deals for ancillary services. Also, PSMR provisions relating to ancillary services
have been brought into line with the current national and European legislation.

The adopted amendments and additions to PSMR will contribute to the real implementation
of the norms of the national and European legislation in the electricity sector, a high degree of
security of electricity supplies and access of new generation types and transmission technologies to
the electricity system of the Republic of Bulgaria.

Rules amending and supplementing the Power Exchange Operational Rules (RAS of
PEOR)
In November 2021, EWRC opened a procedure for amending and supplementing the
Organized Power Exchange Operational Rules, initiated at the proposal of the power exchange
operator Independent Bulgarian Energy Exchange EAD (IBEX EAD). As a result of the
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accumulated practice of the exchange market and its administration activity, a need has been
established to rearrange some relations arising in the course of electricity trading on an organized
exchange market in the bilateral contracts market segment and in the day-ahead market segment.
Therefore, with the Rules Amending and Supplementing the Organized Power Exchange
Operational Rules, promulgated, SG No. 2 of 7 Jan 2022 (RAS of PEOR, promulgated, SG No. 2 of
7 Jan 2022) the following provisions of the Rules have been amended and supplemented: Art. 34,
Art.139, Art.147, Art.153, Art.239 and Art.244. The adopted amendments and additions regulated a
procedure enabling trading participants to withdraw from the electricity exchange market at their
own wish, clarity has been introduced regarding the mechanism of clearing price formation and
submitting offers deadlines, publishing the delivery day clearing prices, relevant traded volumes,
supply and demand curves covering the submitted offers for demand and supply in the Bulgarian
market zone, net exchange position (import/export) for the relevant delivery interval, as well as
publication of trading results for the commercial participants, who entered into transactions in the
day-ahead market. The Art.153 wording has been edited with a view to protecting the exchange
operator from groundless objections leading to excessive administrative involvement. In addition,
IBEX EAD expressed an opinion that “guarantee insurance” should have been removed as a type of
security for payment and/or good performance of the bilateral contracts market segment, since in the
event of obligations’ non-fulfilment the non-performing party would create difficulties in absorbing
that type of collateral due to the process complexity of satisfying insurance claims compared to
satisfying a bank guarantee and/or cash deposit. To that end, the texts of Art.239 and Art.244 and §
1, item 18 of the Additional provision of the act had been amended. The adopted amendments aim at
the uncontroversial application of PEOR by market participants and providing more reliable
conditions and prerequisites for concluding transactions for long-term products for participants in the
bilateral contracts segment.

The adoption of amendments and additions to PEOR has been required due to the
dynamically changing conditions in the electricity market, the observed growth of electricity prices
and the need for effective financial risk management.

With the RAS to PEOR, promulgated SG No. 74 of 2022, in force as of 16.09.2022) the
possibility of trading with 15-minute products has been also introduced in the intraday market
segment with a view to introducing the requirements of Art. 8, par. 4 of Regulation (EU) 2019/943
of the European Parliament and of the Council of June 5, 2019 on the internal electricity market
(Regulation 2019/943), as well as specific requirements for invoicing transactions regulated in tax
legislation.

Self-invoicing by the exchange operator has been introduced with the RAS to PEOR, since
for the purposes of value added tax, self-invoicing should be carried out through a separate
document (agreement) signed by the parties, for which the National Revenue Agency should be
notified. For this purpose, Art. 13 and other related provisions of PEOR have been amended and the
basis for concluding such an agreement between IBEX EAD and the trading participants has been
created. Thus, the concluding of a self-invoicing agreement becomes a factual composition element
in the registration of a trading participant on the electricity exchange market in the day-ahead and
intraday market segments.

The adoption and implementation of the amendments and supplements of PEOR contributed
to the more efficient work of the exchange operator, smaller fluctuations in electricity prices, greater
competition between producers/traders, but also a larger potential market for their sales/purchases
would make the Bulgarian electricity market much more reliable and would be beneficial and in the
interest of all trading participants, including end customers.

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National Report 2022 Energy and Water Regulatory Commission, Bulgaria
 Rules amending and supplementing the Electricity trading rules, promulgated, SG No.
76 of 2022, in force as of 23 Sep 2022 (RAS of ETR)
The amendment and supplement to the Electricity Trading Rules (ETR) was initiated with a
view to aligning them with the rules contained in Regulation (EU) 2019/943 of the European
Parliament and of the Council of 5 June 2019 on the internal electricity market (Regulation
2019/943), Commission Regulation (EU) 2017/2195 of 23 Nov 2017 establishing a guideline on
electricity balancing, Regulation (EU) 2017/1485 of 2 Aug 2017 establishing a guideline on
electricity transmission system operation, as well as with the AAS of EA, prom.SG, no. 9 of 2021.

With the RAS of ETR, a 15-minute settlement period was introduced on the balancing energy
market in accordance with the requirements of Regulation 2019/943. The purpose of these
amendments was to enable market participants to self-balance as close to real-time as possible
according to the closing hours of the balancing energy market. This would facilitate the operation of
the electricity intraday exchange market. By introducing a 15-minute settlement period, trading in
the electricity intraday exchange market would also be supported and the development of a range of
trading products with uniform delivery time intervals would be encouraged.

Amendments to ETR expand the balancing market functions. In this regard, with the aim of
creating an opportunity for a more detailed balancing market setup and including more trading
participants, an amendment and addition was made to the relevant ETR sections, regulating that type
of public relations, with individual provisions being amended, while in Chapter nine Balancing
Market the balancing market functioning has been regulated in a new way. Provisions of
Methodology on determining prices of balancing energy, which is an appendix to ETR have also
been amended and supplemented. In this way, a fairer costs distribution for imbalances between
trading participants in the electricity market has been achieved, which, in turn, would lead to
achieving energy supplies at minimum costs - one of the goals introduced in Art.2, para 1, item 4 of
EA.
The adopted ETR amendments and additions relate to the main objective of the European
Union in the electricity sector, namely the creation of a fully functioning and interconnected internal
energy market, which is of crucial importance for maintaining the security of energy supplies,
increasing competitiveness and ensuring opportunity for all consumers to buy energy at affordable
prices.

Renewable energy sources

In 2022 EWRC set preferential tariffs for the purchase of electricity produced by renewable
energy for energy sites under Art. 24, item 1 of ERSA, namely - with a total installed capacity of up
to 30 kW inclusive, which are planned to be built on roof and facade buildings connected to the
electricity distribution network and on real estates attached to them in urbanized areas.

Next, EWRC updated the preferential tariffs of electricity produced from biomass with a
coefficient that reflects the change in the price-forming elements – energy production raw materials
costs; transport fuels costs and labour and salary costs.

Pursuant to §28, para 3 of the Transitional and Final Provisions of AAS of EA (promulgated
SG No. 9 of 2021) EWRC determined premiums for RES electricity generated by plants with total
installed capacity of 500 kW and over 500 kW, and they represented the difference between the
preferential price determined before the entry into force of the abovementioned act, respectively the
updated preferential price of the site, and the estimated market price determined for that period for
RES electricity depending on the primary energy source.

In 2022, EWRC reported increased investment interest in the construction and

commissioning of larger-scale PvPP projects, as a result of the reported higher prices on IBEX EAD
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day-ahead market in the second half of 2022 and the achieved futures levels for the Bulgarian market
on the European Electricity Exchange (EEX) for 2023.

Given the high electricity prices on the power exchange market, the industrial consumers’
interest in investing in that type of equipment continued in order for them to reduce their costs by
covering their own sites and/or factories’ needs or to sell the electricity generated on one of IBEX
platforms on one hand, and on the other hand, that gives investors the opportunity to return the
invested funds in shorter terms, which makes projects of this type even more attractive.

Electronic certificates of origin of electricity generated in high-efficiency cogeneration

On the basis of Art.21, para 1, item 18 of EA, EWRC issues, transfers and cancels monthly
certificates of origin for the commodity electricity produced in high-efficiency cogeneration (HEC)
of power and heat. The secondary regulation provides for the way to determine the amount of
electricity produced by cogeneration depending on the type of technological cycle, the technical
metering devices requirements, as well as cogeneration electricity registration and criteria for
determining the cogeneration as highly efficient.

The certificate of origin is an electronic document that is issued at the request of a producer,
for a minimum net quantity (1 MWh) of electricity, measured at the plant outlet and submitted to the
relevant grid, subject to compliance with the requirements for accuracy, reliability and impossibility
of manipulation. For each unit of electricity produced in HEC of power and heat, only one certificate
of origin can be issued, which shall be valid for 12 months since the respective unit of electricity has
been generated and it is used by the producer to prove to the energy buyer that it has been produced
in high-efficiency cogeneration.

Main priorities in the gas sector in the reported year were guaranteeing security of supply,
ensuring a liquid and competitive natural gas market and connecting the Bulgarian natural gas
market with EU member states gas markets in the region and in Europe in order to realize the
implementation of the European energy policy of building a single interconnected pan-European
natural gas market. The Bulgarian gas market liberalization and competitiveness depend on
diversification of supply sources and the development of the gas transportation infrastructure.

Regulator’s activity in the natural gas sector in 2022 aimed at creating prerequisites for
achieving a liquid and competitive natural gas market and connecting the Bulgarian market with the
natural gas markets of EU member-states in the region and in Europe. In the past year, EWRC
licensed 31 natural gas traders, and their total number reached 75. With an increase in the number of
market participants, the liquidity and competition in the natural gas market increased as well.

The steps taken by the Regulator in 2022 encouraged competition in the market, as well as
the development of the liberalization processes in the sector.
Trading on an organized natural gas exchange market in 2022 was carried out successfully,
and the number of registered participants also continued to increase. Traded volumes were higher
than in 2021, indicating that there were opportunities for market development and increased
competition.

EWRC priority task in 2022 was to exercise its powers under Regulation (EU) No.
1227/2011 of the European Parliament and of the Council of 25 October 2011 on wholesale energy
market integrity and transparency (REMIT). In 2022, the Regulator expanded its capacity to
investigate potential manipulation of organized wholesale energy markets, including by developing
new monitoring tools. The first decision was adopted, with which EWRC established a violation of
Art. 5 of the Regulation and imposed property sanctions on six energy companies in the total amount

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National Report 2022 Energy and Water Regulatory Commission, Bulgaria
of BGN 1 258 419 - NEK EAD, Interprom EOOD, Energy MT EAD, Most Energy AD, Grand
Energy Distribution EOOD and Interelectric EOOD.

2.2. Report on the implementation of the Clean Energy Package

According to the provision of Art.59, para.1 (u) of Directive (EU) 2019/944 of the European
Parliament and of the Council of 5 June 2019 on common rules for the internal market in electricity
and amending Directive 2012/27 / EU (Directive (EU) 2019/944), EWRC has the obligation to
monitor the implementation of rules relating to the roles and responsibilities of transmission system
operators, distribution system operators, suppliers, customers and other market participants pursuant
to Regulation (EU) 2019/943 of the European Parliament and of the Council of 5 June 2019 on the
internal market for electricity. This provision of the Directive has not been transposed into the
legislation of the Republic of Bulgaria. In this regard, it should be borne in mind that EWRC has no
powers to start up legislative initiative.

3. ELECTRICITY MARKET

3.1. Networks regulation and technical functioning

3.1.1. Unbundling

Pursuant to Article 59 (1), (j) of Directive (EU) 2019/944 of the European Parliament and of
the Council of 5 June 2019 on common rules for the internal market for electricity and amending
Directive 2012/27/EU (Directive (EU) 2019/944), EWRC should ensure that there is no cross-
subsidisation between transmission, distribution and supply activities or other electricity or non-
electricity activities. In this regard, Article 39, paragraph 1 of the Energy Act describes the types of
activities subject to licensing. EWRC issues a license for each of the indicated activities, for a certain
period and with specific conditions, which are an integral part of the decision for its issuance.

Pursuant to Article 37 of EA, energy companies keep separate accounting records for each
activity subject to licensing, the activities subject to licensing and other activities, for each branch
and enterprise, as well as for activities at regulated and freely negotiated prices. The rules for the
separate accounting of energy undertakings, including the assets for the purposes of pricing by
groups of customers, as well as the accounts form and content for regulatory purposes, shall be
determined by a decision of the Regulator. In addition, it should be noted that energy companies
subject to an independent financial audit submit to the Regulator an audit report on compliance with
the rules for keeping separate accounts.

3.1.2. Network extension and optimization

Pursuant to Article 59, paragraph 1, (k) of Directive (EU) 2019/944, EWRC monitors the
investment plans of the transmission system operators and provides in its annual report an
assessment of the investment plans of the transmission system operators as regards their consistency
with the ten-year Union-wide network development plan; such assessment may include
recommendations to amend those investment plans.

In connection with the above, with EWRC Decision № ДПРМ -1 of 17.11.2022, the Plan for
development of the transmission electricity network of Bulgaria for the period 2022 - 2031 was
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National Report 2022 Energy and Water Regulatory Commission, Bulgaria
approved. The 2022-2031 ten-year development plan contains the basic electricity transmission
infrastructure, which is planned for construction, expansion, reconstruction and modernization over
the next ten years. It ensures timely and harmonious construction and commissioning of new
elements in the electricity transmission network for economical and safe operation of the electric
power system (EPS), in compliance with the security criteria and the current quality standards of
electricity supply.

The annual estimated values of all costs for construction, expansion, reconstruction and
modernization of the electricity transmission network objects and of the EPS protection and
management systems for the 2022 - 2031 Ten-year plan, amount to 1 848 760 thousand BGN. For
the period 2022-2024 ESO EAD intends to make investments at the amount of BGN 580 667
thousand or 31% of the total investment amount.

In view of the above, after examining the investment needs, the Regulator considered that the
Transmission Electricity Network Development Plan of Bulgaria for the period 2022-2031 submitted
by the independent transmission operator covered all investment needs and that it was in accordance
with the ten-year plans of the network development in the European Union. The plan has been
developed considering the available information on forthcoming changes in generation, supply,
consumption and exchange with other countries, as well as the regional networks investment plans
and the EU networks.

3.1.3. Network tariffs

Pursuant to Article 21, paragraph 1, item 8 of EA, EWRC regulates prices in the cases
provided for in the same act. Pursuant to Article 30, paragraph 1, items 1, 6, 9, 10, 13 and 17 of EA,
prices subject to regulation by the Regulator are:
- access and/or transmission through the transmission network;
- access and/or transmission through the distribution networks.

In the pricing decisions during the said period, the Regulator consistently applied a balanced
approach taking into account the interests of all participants, in order to avoid sharp price changes.

The network tariffs development for the period 2018 - 2022 is presented in the table below:

2018 2019 2020 2021 2022

Access price to the transmission

network
BGN/MWh 1.39 0.41 0.45 0.49 0.68

Transmission price through the

transmission network
BGN/MWh 8.45 9.83 10.30 11.48 19.89

ESO EAD Access price to the transmission

network for PvPP and WPP
BGN/MWh 3.02 5.14 5.28 5.40 5.26

Access price to the transmission

network for power generators,
excluding PvPP and WPP
BGN/MWh - 2.12 2.26 2.42 2.30
generators

ERM Zapad Transmission price through the

distribution network MV
BGN/kWh 0.00971 0.01002 0.00980 0.01076 0.01653
EAD

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 Transmission price through the
distribution network LV
BGN/kWh 0.03245 0.03426 0.03355 0.03636 0.06759
Access price of non-household BGN/kWh/
customers day 0.01796 0.01989 0.01989 0.02151 0.02151
Access price of household
customers
BGN/kWh 0.00519 0.00577 0.00568 0.00605 0.00648
Transmission price through the
distribution network MV
BGN/kWh 0.00884 0.0095 0.00915 0.00994 0.01643

Transmission price through the

distribution network LV
BGN/kWh 0.03253 0.03576 0.03574 0.03783 0.07105
EP Yug AD
Access price of non-household BGN/kWh/
customers day 0.01733 0.01981 0.01977 0.0206 0.02256
Access price of household
customers
BGN/kWh 0.00516 0.00599 0.00529 0.00598 0.00598
Transmission price through the
distribution network MV
BGN/kWh 0.0117 0.01274 0.01285 0.01312 0.02648

Transmission price through the

ERP Sever distribution network LV
BGN/kWh 0.03278 0.03478 0.03531 0.03583 0.07073
EAD
Access price of non-household
customers
BGN/kWh 0.00854 0.00896 0.02053 0.02073 0.02311
Access price of household
customers
BGN/kWh 0.00854 0.00896 0.00890 0.00885 0.00885
Transmission price through the
distribution network LV
BGN/kWh 0.03303 0.03125 0.04429 0.06035 0.0453

ERP Zlatni Access price of non-household

Piasaci AD customers
BGN/kWh 0.00675 0.00644 0.01349 0.01325 0.00828
Access price of household
customers
BGN/kWh 0.00675 0.00644 0.01349 0.01325 0.00828

The graph below shows the change in transmission and access prices for the last five
years. It could be noted that the access price has significantly decreased in 2019 and has managed to
comparatively maintain its value over the last three years. In 2022, the price of access to the
electricity transmission network increased by 38.8%. The price of transmission through the
electricity transmission network maintained an upward trend, increasing by 73% in 2022 to 2021, by
nearly 11.5% in 2021 to 2020, and it increased by only 4.78% in 2020 compared to 2019.

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National Report 2022 Energy and Water Regulatory Commission, Bulgaria
 The price of transmission through the electricity distribution network of low voltage in 2022
marks a significant increase compared to 2021, which reached 86% for ERM Zapad EAD, 88% for
EP Yug EAD and 97% for ER Sever EAD.

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National Report 2022 Energy and Water Regulatory Commission, Bulgaria
 The graph below shows the movement of the access price for household customers over the
last three years. It shows that in 2022 there was almost no change in the fee of the three large
electricity distribution companies, with the exception of ERM Zapad EAD, where the increase was
very small - by 7%.

3.1.4. Security and reliability regulation

Cross-border infrastructure access, including capacity allocation and congestion management

procedures

Auction rules on conditions for access to the network for cross-border exchange of electricity
(Rules on transmission capacity allocation) and cross-regional cooperation between transmission
system operators have been developed in line with Regulation (EU) 2019/943, by introducing
common rules and procedures for the allocation and provision of available transmission capacity in
both directions on the interconnections of the EPS of Bulgaria and neighbouring power systems. The
rules were also drafted in conjunction with Regulation (EU) 2016/1719 of 26 September 2016
establishing a guideline on forward capacity allocation (Regulation (EU) 2016/1719) and
Commission Regulation (EU) 2015/1222 of 24 July 2015 establishing guidelines on capacity
allocation and congestion management (Regulation (EU) 2015/1222). The purpose of these rules is
to ensure optimal transmission network bottlenecks management, promoting energy exchanges
development and coordinated allocation of cross-border capacity through non-discriminatory
market-based solutions.

The Rules on transmission capacities allocation are to be submitted by ESO EAD every year
for EWRC approval and the Harmonized allocation rules for long-term transmission capacities at the
common borders between EU member states were approved on 29 Oct 2019 by ACER. Auction
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rules, users’ registers and agreed transmission capacities to be allocated are published on ESO EAD
website. The results of the annual, monthly and daily auctions organized by ESO EAD are publicly
available on ESO EAD website and in the public section of the electricity market administration
system. According to the above rules, ESO EAD performs the role of an auction operator for
allocation of 50% in both directions of the agreed transfer capacities on the Bulgarian-Turkish
border, as well as the daily transmission capacities on the border Bulgaria-North Macedonia. The
Single Allocation Platform JAO allocates transmission capacities on an annual, monthly and daily
basis on the Bulgarian-Greek and Bulgarian-Serbian borders, and on an annual and monthly basis on
the Bulgarian-Romanian border. TRANSELECTRICA (Romania) is the auction operator to allocate
the daily transmission capacities on the Bulgarian-Romanian border, and MEPSO (North
Macedonia) - the annual and monthly transmission capacities on the border Bulgaria-North
Macedonia. ESO EAD reports the data for which it is the auction operator in the ARIS system
(ACER REMIT Information System). Data on other auctions are reported by JAO or the relevant
auction operator.

Cooperation in relation to the implementation of EC Regulations

At the beginning of October, Electricity System Operator EAD started conducting fully daily
tender procedures for next-day delivery of the legally required operating reserves for power system
management. The service of frequency regulating and of exchange capacities to ensure reserves in
real time has been introduced in implementation of Article 6, paragraph 9 of Regulation (EU)
2019/943 of the European Parliament and of the Council of 5 June 2019 on the internal market for
electricity. European electricity transmission operators have been introducing the service of
frequency regulation and exchange capacities to provide real-time reserves in response to the
European electricity markets integration, which necessitates a new approach in electricity systems
balancing. The trend towards growth in RES electricity production also imposes the need to develop
services for providing operational reserves in real time. In accordance with the requirements of
Commission Regulation (EU) 2017/1485 of 2 August 2017 establishing a guideline on electricity
transmission system operation, ESO EAD has developed rules and an electronic platform to conduct
tender procedures of providing frequency containment and restoration reserves and exchange
capacities. Applicants willing to provide these services shall pass technical tests to demonstrate their
ability to provide frequency containment reserves, which are activated within 30 seconds, and
frequency restoration automatic and manual reserves and exchange capacities, which are activated
within up to 15 minutes. Such operating reserves providers can be thermal power units with proven
workability and commercial schedules, as well as fast-synchronizing units such as HPP or
aggregators that can change their generation within 15 minutes.

One of the main tasks related to the implementation of the requirements arising from
Regulation (EU) 2015/1222 establishing guidelines on capacity allocation and congestion
management (CACM) was the development of a Common capacity calculation methodology for the
day-ahead and intraday market time-frame for the SEE CCR, as well as other accompanying
methodologies. The implementation of the methodology is closely related to the activity of the SEE
CCR Regional Security Centre (RSC). Due to delays in the establishment of the Thessaloniki RSC,
the methodology implementation will be delayed too. Another important task regarding the
implementation of the requirements arising from Art.35 of Regulation 2015/1222 was the
development of a Methodology for redispatching and countertrading and a Methodology for cost
sharing.

As required by Art.76 and 77 of Commission Regulation (EU) 2017/1485 of 2 August 2017

establishing a guideline on electricity transmission system operation (Regulation (EU) 2017/1485), a
common methodology for the region of Southeast Europe has been developed to coordinate the
analysis of operational security. The methodology is in compliance with the already developed

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Methodology for redispatching and countertrading and a Methodology for redispatching and
countertrading cost sharing, as required by Art.76, paragraph 1 of Regulation 2017/1485.

One of the main tasks related to the implementation of the requirements arising from
Regulation (EU) 2016/1719 establishing a guideline on forward capacity allocation, is the
development of a Common capacity calculation methodology for long-term time frames for SEE
CCR under Art.10, as well as the other accompanying methodologies, and the development of a
Methodology for splitting cross-zonal capacity. The three regional TSOs chose for that methodology
the calculating method based on coordinated net transmission capacity.

3.1.5. Monitoring balance of supply and demand

Total energy shortage in 2022 was 1 499 995 MWh compared to 731 963MWh in 2021, which
is a double increase of approximately 105%. Total energy surplus in 2022 was 927 466 MWh
compared to 764 943 MWh in 2021, which is a decrease of approximately 21%. Percentages of
electricity shortage and electricity surplus in 2022 are shown in the figure below.

Pursuant to Art.21, paragraph 1, item 8, proposition 2 of EA, the Regulator determines

annually a marginal price for concluding transactions on the balancing energy market.

With Decision No Ц-44 of 30.12.2021, in force as of 01.01.2022, EWRC set a marginal price
for concluding transactions on the balancing energy market for upward regulation at the amount of
DAM price + supplement of BGN 100/MWh, where DAM price is the IBEX EAD hour DAM price
and a marginal price for concluding transactions on the balancing energy market for downward
regulation at the amount of 30% of DAM price, where DAM price is the IBEX EAD hour DAM
price, but not higher than the regulated price of HPP owned by National Electric Company EAD.
Under Decision No Ц-44 of 30.12.2021, item 3, the said marginal prices shall not be applied when
concluding transactions for balancing energy that is purchased/sold from/to neighbouring energy
systems under bilateral agreements or from a regional balancing market.
The Rules amending and supplementing the EMR, prom.SG, 76 of 2022, as of 1 Oct 2022 a
15-minutes settlement period has been introduced on the electricity balancing market in compliance
with the requirements of Commission Regulation (EU) 2017/2195 of 23 November 2017
establishing a guideline on electricity balancing and Regulation (EU) 2019/943 of the European
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National Report 2022 Energy and Water Regulatory Commission, Bulgaria
Parliament and of the Council of 5 June 2019 on the internal market for electricity. This amendment
leads to a fourfold increase in the number of settlement periods, accordingly it can have a significant
impact on the way and accuracy of forecasting the purchase/sale electricity quantities. At present, the
lack of sufficient real data on the application of the 15-minute settlement interval does not allow an
analysis of the achieved price levels for surplus and shortage. To that end, until accumulating a
sufficient volume of real data on the reported amounts of imbalances of the balancing groups and the
achieved price levels, it is not possible to justify the need to change the approach that EWRC has
used in determining the currently applied marginal contract price of transactions on the balancing
energy market.

With Decision No.Ц-27 of 30.12.2022, in force as of 01.01.2023, EWRC set a marginal price
for concluding transactions on the balancing energy market as follows:
1. marginal price for concluding transactions on the balancing energy market for upward
regulation at the amount of DAM price + supplement of BGN 100/MWh, where DAM price is the
IBEX EAD hour DAM price;
2. marginal price for concluding transactions on the balancing energy market for downward
regulation at the amount of 30% of DAM price, where DAM price is the IBEX EAD hour DAM
price, but not higher than the regulated price of HPP owned by National Electric Company EAD;
3. marginal prices under items 1 and 2 do not apply when concluding transactions for
balancing energy that is purchased/sold from/to neighbouring energy systems under bilateral
agreements or from a regional balancing market.

3.1.6. Cross-border issues

Regarding the technical cooperation between the EU transmission system operators and third
countries, the Bulgarian TSO is in close cooperation with the operators - members of the European
Network of Transmission System Operators for Electricity (ENTSO-E). In connection with the entry
into force of Regulation (EU) 2019/943, ESO EAD has sent letters with a proposal for cooperation
with third countries in the South East Europe Region (non-EU members of ENTSO-E: Turkey,
North Macedonia and Serbia) for the coordinated calculation of inter-zonal capacity under ACER
methodologies for determining the 70% threshold of the cross-zonal capacity and for the coordinated
calculation of operational security.

Market coupling projects in the day-ahead timeframe

Project of market coupling with the North Macedonia market zone

At the beginning of January 2017, IBEX EAD fully joined WB6 (West Balkan 6) and all
activities declared as its goals as coordinated by the Energy Community, together with ESO EAD
and EWRC. During the first meeting of the representatives of all parties to the project, which took
place on 12 April 2018 in Sofia, IBEX EAD signed a memorandum of understanding with the North
Macedonian Electricity Transmission System Operator (MEPSO), the Energy Regulatory
Commission of the Republic of North Macedonia and Electricity System operator EAD (ESO) of the
Republic of Bulgaria, which memorandum set the beginning of implementing the day ahead market
coupling between the two countries. In the same year, a document containing the general
management conditions and the structure of the project (Terms of Reference) was drawn up and
approved, on the basis of which a Steering Committee representing all project participants was
selected, as well as five working groups with relevant tasks. Physical meetings of the Legal and
Finance working groups were conducted and their activities commenced with the work on the
development of the so-called "Legal GAP analysis" and of an agreement on general costs allocation
and preparation of the project budget. Also, a detailed project activities schedule was drawn up,
agreed and approved by the Project Steering Committee, together with the responsible parties and
prerequisites for the implementation of the tasks (Gantt chart). A non-disclosure agreement (NDA)
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National Report 2022 Energy and Water Regulatory Commission, Bulgaria
between all participants was agreed and signed, allowing exchange of information on all tasks,
regardless of whether it was publicly known or not. In January 2019, a cost sharing agreement was
finalized, which would serve as a basis for other similar projects of the WB6 countries. The main
problem of the project was the lack of a licensed exchange operator in North Macedonia. This
process has been delayed, as it was previously announced that it would be operational from the
beginning of 2019, but as of now it is not yet active.

In early 2020, the North Macedonian side confirmed its intention to complete the process of
nominating NEMO for the market area by the end of April 2020 (i.e. before the parliamentary
elections), thereby renewing the project and making possible the start of the activities according to
the road map approved by the parties. It was also decided that the North Macedonian side would
update the members in the project (i.e. new member of the Steering Committee, new members from
the already existing MEMO, etc.)

In September 2020 the Regulator of North Macedonia adopted a decision for the designation
of the Macedonian electricity market operator (MEMO) as a Nominated Electricity Market Operator
(NEMO) under the partially implemented in the North Macedonian legislation CACM (Regulation
1222/2015). This allowed the market coupling project process to be resumed. After revising the
MoU and ToR and drawing up a new roadmap (with a project completion horizon Q1 2022), the
project has restarted. A schedule was set, the working groups arranged regular meetings and work on
the tasks set out in the roadmap began. After a meeting of the group of ministers of the Energy
Community (EnC) member states held on 17.12.2020, no agreement was reached on the mandatory
transposition of Regulation 1222/2015 (CACM) into the legislation of the EnC member states, which
left the project with the only alternative to receive explicit recommendations from the EC on the
overcoming of legal problems related to the participation of a non-EU country in a market coupling
with EU member states. Such recommendations are expected to come in response to a letter from the
project team addressed to EC and EnC, which has already been drafted. Such recommendations
could include an interstate agreement between the Republic of North Macedonia and the EC,
following the example of Switzerland and the EEA countries (Norway, Iceland and Lichtenstein). At
the end of March 2021 North Macedonia published a procedure (according to the procurement law)
for the selection of a platform provider. Unfortunately, the procedure was unsuccessful due to a lack
of participants who could fulfil the set criteria and a new one was held in February 2022. This was
an extremely important milestone in the project that would allow the actual work on the coupling
with the selected service provider to commence and enable an opportunity to plan the technical
readiness in 2023. Regarding the regulatory framework, it is expected that EC will make a last
attempt to encourage changes to the Energy Community Treaty agreed by December 2022. If this
does not happen, IBEX EAD will work towards a “border per border” solution, which in principle
has the EC support.

Market coupling project with the market zone of the Republic of Serbia
At the end of 2018 IBEX EAD took steps towards launching and participating in a trilateral
coupling project between Bulgaria, Serbia and Croatia. After an initial, informal meeting in
September in Belgrade with representatives of the market operators of the three countries, SEEPEX
(Republic of Serbia), CROPEX (Republic of Croatia) and IBEX EAD, it was decided to launch the
project with a common tripartite meeting between the market and transmission operators, as well as
the respective energy regulators of the three countries. That was followed by signing a joint letter
addressed to the regulators of the three countries, with which their support for the project was
obtained, and in April 2019 the Croatian side presented the results of a feasibility analysis and
specific next steps for the implementation of the project. The document was corrected and confirmed
by the other parties and finally completed. An Action Plan (Roadmap) of the project is pending,
which will reflect the readiness of the Republic of Serbia regarding the implementation of the EU
regulatory framework in relation to the operation of the electricity markets.
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National Report 2022 Energy and Water Regulatory Commission, Bulgaria
 Market coupling projects in the intraday timeframe

LIP 14 local project

In relation to obligations and objectives under Commission Regulation (EU) 2015/1222 of 24
July 2015 establishing a guideline on capacity allocation and congestion management, IBEX EAD
and ESO EAD have already become parties to the agreement signed between all market and
transmission operators for operating the intraday integrated market in Europe (IDOA - Intraday
Operational Agreement) and together with the provisions of CACM GL, this agreement defines the
obligations and objectives of all NEMOs (nominated electricity market operators) and transmission
operators related to the operation of the single market coupling on intraday markets. In this regard,
IBEX EAD officially took an initiative to join the XBID project for intraday market coupling in
2019 initially by joining in the so-called LIP 15 (Local implementation project including the
Bulgarian-Romanian border), in which the market and transmission operators of Romania, Hungary,
the Czech Republic, Slovenia, Croatia, Austria and Germany have already been members and which
project was part of the so-called second joining wave to XBID, and subsequently on 29.11.2022 and
through LIP 14, including the Bulgarian-Greek border.

The IBEX EAD initiative to join LIP 14 has been successfully implemented again thanks to
the cooperation with ESO EAD, and in this project IBEX EAD would have a shipper’s role again in
the sense of IDOA, for as a result of joining through a second border to XBID, it has already
acquired the role of a so-called “Transit Shipper”.

The whole project implementation was possible thanks to the active participation of IBEX
EAD in all working groups at LIP 14 regional project level (Testing WG, Project Team WG, LIP 14
Steering Committee) and at the XBID level (QARM group, XTG WG, ID SC, SIDC GL Preparation
TF).
Time market units/products in the intraday local and cross-zonal market SEE CCR 15 min
MTU Implementation Project
The provision of art.8 of Regulation (EU) 2019/943 of the European Parliament and of the
Council of 5 June 2019 on the internal market for electricity (Regulation 2019/943) stipulates that
NEMO (IBEX EAD for the market zone of the Republic of Bulgaria) should provide an opportunity
for market participants to trade energy as close as possible to the time of physical delivery, while at
the same time providing an opportunity to trade energy in time intervals not less than that of the
settlement period of the balancing market administered by ESO EAD in its capacity as a
transmission operator.in addition, under art.8, para 4 of Regulation (EU) 2019/943, an obligation has
been introduced that by 1 January 2021 the imbalance settlement period (ISP) shall be 15 minutes in
all scheduling areas, unless regulatory authorities have granted a derogation or an exemption.

After IBEX EAD and ESO EAD sent a request to EWRC on 28.05.2021 for a derogation
according to the terms provided for in the Regulation, EWRC set a final date for the introduction of
the 15 min. ISP and 15 min. MTUs (for the intraday segment) no later than 31.12.2022.

As a result of the derogation, ESO EAD and IBEX EAD launched a project to introduce 15
min. MTUs on the internal intraday market and on the Bulgarian-Romanian border, as well as a 15
min. ISP on the balancing market with a planned date of start-up in real work 01.10.2022. Request
for Change (RfC) was sent on 23.07.2021 to SIDC OPSCOM (Single Intraday Coupling Operational
Steering Committee) by the project parties (IBEX EAD, ESO EAD, OPCOM, Transelectrica) and all
common tests at SIDC OPSCOM level were conducted in November 2021.
Work on the project was successfully completed and on 1 Oct 2022 the offering of products
with a 15-minute intraday segment resolution was launched.

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National Report 2022 Energy and Water Regulatory Commission, Bulgaria
 Realized commercial electricity exchange according to schedules of trade participants

EXCHANGES
Realized commercial electricity exchange according to schedules of trade
participants
Border/Direction 2021 2022
MWh MWh
Bulgaria - Romania 4 671 117 5 583 182
Romania - Bulgaria 1 658 555 736 899
Bulgaria - Serbia 2 210 124 2 803 087
Serbia - Bulgaria 771 887 524 640
Bulgaria – N Macedonia 2 912 277 2 934 309
N Macedonia - Bulgaria 229 562 135 414
Bulgaria - Greece 3 657 455 3 351 023
Greece - Bulgaria 562 620 707 714
Bulgaria - Turkey 94 534 438 847
Turkey - Bulgaria 1 560 125 847 624
Physical electricity exchange between Bulgarian EPS and EPS of neighbouring
countries
Border/Direction
2021 2022
Import MWh MWh
Physical border - total 1 857 126 1 469 114
Including:
- Romania 1 485 974 1 183 656
- Serbia 39 392 42 295
- N Macedonia 8 204 22 025
- Turkey 259 218 126 035
- Greece 64 338 95 103
Export
Physical border - total 10 634 410 13 664 298
Including:
- Romania 2 330 182 3 651 934
- Serbia 2 708 246 3 222 131
- N Macedonia 2 561 358 2 530 371
- Turkey 1 063 456 2 293 437
- Greece 1 971 167 1 966 425

Physical exchange with distribution companies

2021 2022
MWh MWh
Between ESO EAD and ERM Zapad AD 9 366 852 9 019 917
Between ESO EAD and ERP Sever EAD 5 135 643 4 825 929
Between ESO EAD and EP Yug AD 8 466 282 8 084 296
Between ESO EAD and ERP Zlatni Piasaci AD 48 382 59 122
Between ESO EAD and NRIC 309 354 333 207
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National Report 2022 Energy and Water Regulatory Commission, Bulgaria
 3.1.7. Implementation of network codes and guidelines

In compliance with European regulations and with the aim of ensuring full transparency and
publicity, in 2022 EWRC continued to fulfil its obligations under network codes and regulations.
During the said period, activities were carried out on the adoption of methodologies and
accompanying papers in implementation of the European regulations in order to ensure the smooth
operation of the activities for the single market coupling and to ensure the necessary available cross-
border transmission capacity.

3.2. Competition and market functioning

3.2.1 Wholesale markets

Data on electricity generated and installed capacities in the period 2021 - 2022 have been
summarized by years in the table below:

Installed capacity in Electricity generated in

Electricity generated by energy MW MWh Change in %
sources
2021 2022 2021 2022
1. NPP 1 893 1 893 15 650 833 15 615 000 -0.23%
2. TPP lignite coal 3 585 3 585 16 076 443 19 920 231 23.91%
3. TPP black and brown coal 240 240 344 140 413 285 20.09%
4. TPP natural gas 1 044 1 076 2 136 970 1 461 015 -31.63%
5. HPP, incl. 2 867 2 867 4 149 484 2 975 860 -28.28%
5.1. PSHPP generation 1 386 1 386 816 829 444 333 -4.60%
5.2. PSHPP pumps * 932 932 383 221 51 621 -86.53%
6. RES, incl.: 725 930 1 230 356 1 514 767 23.12%
6.1. WPP 358 358 739 923 769 315 3.97%
6.2. PvPP 342 548 403 654 647 006 60.29%
6.3. Biomass PP 25 25 86 779 98 447 13.45%
Total: 1+2+3+4+5+6 10 354 10 592 39 588 226 41 900 158 5.84%
* the PSHPP pumps work represents electricity consumption and the electricity volumes under 5.2 are not
included in the sum in item 5

Data used for the installed capacities connected to the transmission network and the
generated net electricity in 2021 and 2022 has been provided by ESO EAD. Total amount of
electricity generated by those capacities was 41 900 158 MWh.

When analysing the differences between the generated electricity quantities of the plants
connected to the electricity network for 2022, in comparison to 2021, the following trends can be
observed: an increase in the generation by TPP lignite coal (23.91%), an increase in TPP black and
brown coal (20.09%), a decrease in TPP gas generation (31.63%) and in HPP (28.28%). An increase
in the electricity generation from renewable energy sources has been observed (23.21%) due to new
capacities in photovoltaic plants. Coal and nuclear power had the highest year-by-year shares.
The next table presents the installed capacity in MW, connected to the electricity distribution
networks and the energy produced in 2022 in MWh.

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National Report 2022 Energy and Water Regulatory Commission, Bulgaria
 ERP Zlatni Piasaci
ERM Zapad EAD EP Yug AD ERP Sever EAD
AD

Installed Generated Installed Generated Installed Generated Installed Generated

capacities electricity capacities electricity capacities electricity capacities electricity

Coal 37.22 26 607 0.00 0.00 0.00 0

Natural gas 0.0 177 415 21.01 52035.63 225.28 119 624
HPP 222.16 563 406 95.79 231626.14 14.78 24 387
WPP 18.57 23 053 47.90 57893.85 295.35 648 863
PvPP 269.84 305 844 662.91 826773.11 219.44 227 466 0.71 93
Other 13.65 49 233 28.62 87385.13 5.91 28 551
Total 561.44 1 145 557 856.23 1 255 714 760.76 1 048 891 0.71 93

Generated electricity total amount in Bulgaria in 2022 (45 350 413 MWh), distributed
depending on the primary energy source and the technology used for generation, has been
systemised in the next figure. Electricity generation largest share belonged to condensation TPP
(44% or 19 820 829 MWh) and NPP (34% or 15 615 000 MWh) followed by RES (around 12% or 5
435 299 MWh).

Monitoring the level of prices, the level of transparency, the level and effectiveness of
market opening and competition
In connection with the obligation under Art.59, par.1(n) of Directive (EU) 2019/944, EWRC
monitors the level of transparency, including wholesale prices, and ensures that electricity
companies fulfil transparency obligations. In this regard, an analysis of the wholesale trade in
electricity has been made.

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National Report 2022 Energy and Water Regulatory Commission, Bulgaria
 The main wholesale trade is carried out through the three segments of the Independent
Bulgarian Energy Exchange EAD (IBEX EAD), namely day-ahead market, intraday market and
centralized bilateral contracts market.

Day-ahead Market
In 2022 day-ahead market base energy traded volumes (Figure 2) increased by 2 324 345
MWh or by 9% compared to 2021. The biggest volume increase in absolute value has been reported
in 2021 with almost 64% as for previous years the increase was by 7 033 945 MWh in 2020
compared to 2019, by 2 358 003 MWh in 2019 compared to 2018 and by 1 826 633 MWh in 2018
compared to 2017.

The next figure presents a comparative analysis of IBEX EAD and regional exchanges day-
ahead market prices and traded volumes.

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National Report 2022 Energy and Water Regulatory Commission, Bulgaria
 The comparative analysis includes the average monthly baseload prices Euro/MWh in 2022
day-ahead market traded volumes on the following regional power exchanges: IBEX (Bulgaria),
LAGIE (Greece), OPCOM (Romania), SEEPEX (Serbia) and HUPX (Hungary).

Intraday Market
In 2022 the day-ahead market total traded volume was 1 187 GWh in comparison to 1 278
GWh in 2021 and 423 GWh in 2019.

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National Report 2022 Energy and Water Regulatory Commission, Bulgaria
 The graph below shows the average monthly prices of base energy traded on IBEX EAD
intraday market.

The total amount of electricity traded on the IBEX EAD platforms in 2022 was 37 842 GWh:
27 954 MWh on the day-ahead market, 1 187 GWh on the intraday market and 8 700 GWh on
bilateral contracts. Quantities percentage is shown on the following figure:

Summary indicators that characterize the dynamics of the wholesale electricity market
development for the period 2016-2022 are shown in the table below:

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National Report 2022 Energy and Water Regulatory Commission, Bulgaria
 Wholesale electricity market
2016 2017 2018 2019 2020 2021 2022
indicators

Total electricity generation, GWh 45 040 45 430 46 531 39 476 36 799 42 521 41 900
Total number of active electricity
traders 90 97 89 85 38 40 65
Total electricity consumption, excl.
pumps, GWh 37 714 38 864 38 218 37 794 36 723 38 631 29 653
Import volume, GWh 3 754 3 425 3 118 4 026 3 707 1 857 1 469
Export volume, GWh 10 120 8 906 10 931 9 822 7 115 10 634 13 664

Statistical data for the day during the year with the highest electricity consumption in
the country

Day with highest

Electricity consumption
electricity Registered on
(gross), GWh
consumption in:
2016 148 Thursday, 21 Jan 2016
2017 164 Tuesday, 10 Jan 2017
2018 148 Tuesday, 27 Feb 2018
2019 150 Tuesday, 08 Jan 2019
2020 137 Tuesday, 21 Jan 2020
2021 143 Tuesday, 19 Jan 2021
2022 151 Wednesday, 26 Jan 2022

Implementation of Regulation (EU) No. 1227/2011

The Regulator’s activity was aimed at ensuring equal access to the electricity and
transmission capacity trading markets, trading and information relevant to determining prices and
traded volumes transparency, as well as eliminating market abuses in implementation of Regulation
(EU) No. 1227/2011 of the European Parliament and of the Council of 25 October 2011 on
wholesale energy market integrity and transparency (REMIT, Regulation (EU) No. 1227/2011).

One of the main activities of the “Monitoring and Control of the Implementation of
Regulation (EU) No. 1227/2011 of the European Parliament and of the Council of 25 October 2011
on wholesale energy market integrity and transparency” Division (REMIT Division) is finding
violations of Art.3 and Art.5 of Regulation (EU) No. 1227/2011, pursuant to Chapter Seven “a” of
the Energy Act.

In 2022, in accordance with Art.15 of REMIT, the REMIT Division received 10 reports on
suspicious transactions from Independent Bulgarian Energy Exchange EAD (IBEX EAD). In total,
for the period 2019 - 2022, 34 reports from IBEX EAD have been received regarding suspicious
transactions in the electricity market. In 2022, in accordance with Art.16 of REMIT, the REMIT
Division received one signal from ACER. No reports of suspicious transactions from associations
and communities were registered at EWRC in 2022. One suspicious transaction alert was received
from market participants. One report was submitted by an individual entity.
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National Report 2022 Energy and Water Regulatory Commission, Bulgaria
 Statistics on received reports and signals of suspiciuos transactions
in electricity sector, 2019 - 2022
2019 2020 2021 2022 17
14
13
10 10 10
9

5 5
3
2 2
1 1 1 1 1 1 1 1
0

IBEX EAD Associations ACER Market Other/EWRC Total

and participants self referral
communities

In the case of established initial data on market manipulation within the meaning of Art.3 and
Art.5 of REMIT, the REMIT Division officials have the power to carry out a preliminary
investigation. After completion of the preliminary investigation, if sufficient evidence of a violation
has been established, EWRC may, by decision, initiate proceedings to establish a violation under
Art.3 and/or Art.5 of Regulation (EU) No. 1227/2011. It should be noted that these investigations are
carried out in partnership with ACER, in accordance with Art.16 of the Regulation. For each
individual case, EWRC shall regularly exchange information on the development of cases with
ACER. This exchange follows strict rules to ensure complete confidentiality and prevent leakage of
information on ongoing cases outside of the REMIT Division staff.

In view of the stated requirements for guaranteeing complete confidentiality in the

investigation of ongoing cases, the EA provides for the EWRC decision and minutes of sittings
related to the preliminary investigation and the establishment of a violation under Art.3 and/or Art.5
of Regulation (EU) No. 1227/2011, not to be published on EWRC website. Based on the above,
EWRC cannot provide specific information on the progress and outcome of ongoing investigations,
as it would be in violation of the requirements of ACER and Art.74a, para 8 of EA.

Based on all received reports of suspicious transactions and signals, a total of 42 cases of
preliminary investigation were formed in the REMIT Division pursuant to Art.74a of EA for the
period 2019-2022, all relating to the wholesale electricity market. The formed preliminary
investigations are less than the number of received reports and signals for the same period, because
several signals were received for one and the same suspicious transactions. For the purpose of
procedural economy and to achieve a complete clarification of the investigated cases, these signals
have been incorporated into one preliminary investigation. The purpose of the preliminary
investigation is to establish whether there is sufficient data in the report, on the basis of which a
reasonable assumption can be made of a violation of Art.3 and/or 5 of Regulation (EU) No.
1227/2011. When EWRC considers that the suspicion of a violation is supported by the facts
presented in the preliminary investigation report, it initiates proceedings to establish a violation of
Art.3 and Art.5 of Regulation (EU) No. 1227/2011.

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National Report 2022 Energy and Water Regulatory Commission, Bulgaria
 In 2022, EWRC initiated two proceedings to establish a violation of Art.3 and/or Art.5 of
Regulation (EU) No. 1227/2011, and due to lack of data on committed violations, terminated 8
preliminary investigations.

In 2022, in accordance with Art.74 (n) of EA, EWRC took its first decision establishing a
violation of Art.5 of Regulation No. 1227/2011 and imposed property sanctions to:
1. National electricity company EAD – BGN 625 097;
2. Interprom EOOD – BGN 336 237;
3. Energy MT EAD – BGN 144 984;
4. MostEnergy AD – BGN 34 289;
5. Grand Energy Distribution EOOD – BGN 27 337;
6. Interelectric EOOD – BGN 90 475.
In its decision, EWRC found that during the first six months of 2019 NEK EAD traded on
the two IBEX EAD market segments - intraday and day-ahead exclusively with Interprom EOOD,
Energy MT EAD, Grand Energy Distribution EOOD, Interelectric EOOD and Most Energy AD. In
the decision EWRC detailed the types of transactions and orders that were carried out by the
companies during the said period and accepted that the companies manipulated the wholesale
electricity market by applying a trading model that constituted pre-arranged trading. The companies
have carried out washed transactions of the ABA type, block trading and cross transactions, which
fall under the category of transactions giving false/misleading signals, leading to manipulation of the
wholesale electricity market, in violation of the prohibitions against market abuse under Article 5 of
REMIT.
In connection with the findings of the completed proceedings, EWRC sent a signal by
jurisdiction to the Sofia City Prosecutor's Office.

EWRC highly appreciates the role and support of ACER in the process of investigating the case,
including the clarifications, guidelines and ideas provided regarding the interpretation of the
provisions of Regulation (EU) No. 1227/2011.

In 2022, EWRC's capacity to investigate potential manipulation of organized wholesale

energy markets was increased, including through human resource development, participation in
ACER and CEER working groups, refinement of work processes and improvement of methodology.
The REMIT Division has seriously expanded the scope of inspections by developing new tools for
monitoring and controlling wholesale energy markets. The work will be significantly improved with
the upcoming introduction of the specialized software package for statistical analysis and data
processing developed jointly with IBM Bulgaria, which automates the monitoring and control
activities of the energy market. This will increase the accuracy and objectivity of assessments of the
behaviour of energy exchange participants.

With its work of investigating cases of violations under Regulation (EU) No. 1227/2011,
EWRC aims to meet public expectations and ensure that consumers and other market participants
can have confidence in the integrity of the electricity and natural gas markets, and that prices set in
wholesale energy markets reflect the interaction between supply and demand under conditions of
effective competition, and thus market participants would not be able to derive undue profits from
market abuses.
Pursuant to Art.74(n) of EA and Art.155(u), para 2 of Ordinance No.3 of 21.03.2013 on
licensing the activities in the energy sector, REMIT Division officials have carried out preventive,
ongoing and subsequent control for compliance with the obligations under Articles 4, 8, 9 and 15 of
Regulation (EU) No. 1227 /2011.

At the end of December 2022, EWRC published a message on its website reminding
market participants to update their registration in CEREMP in connection with the fulfilment of their
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National Report 2022 Energy and Water Regulatory Commission, Bulgaria
obligation to disclose inside information pursuant to Art.4 of Regulation (EU) No. 1227/2011. That
was in connection with the fact that as of 1 January 2023, insider disclosure shall only be done
through insider information platforms, which means that market participants can no longer use their
corporate websites for this purpose as a primary or fallback solution.

In 2022, EWRC carried out a total of 21 registrations and data updates of already registered market
participants in the Centralized European Register of Market Participants - CEREMP, with the
requests being approved by the REMIT Division experts. After a request has been approved and sent
to ACER, the market participant receives a unique ACER code, which is necessary in order to carry
out transactions on the organized markets.

Ongoing monitoring of compliance with obligations under Art.15 of the Regulation have
been carried out of the following persons professionally arranging transactions (PPAT):
 Independent Bulgarian Energy Exchange EAD (IBEX EAD);
 ESO EAD.
Finding protocols with relevant prescriptions have been drawn up, incl. for the
establishment of an independent market supervision unit and monitoring, control and analysis
procedures in cases of suspicion/presence of market manipulations, provision and access of the
REMIT Division to data on trade in the relevant market (organized exchange market or balancing
services market). IBEX EAD has also been given instructions regarding certification of the platform
for publishing inside information according to ACER requirements. ESO EAD has been instructed to
establish a unit to monitor the balancing market and capacity auction activity and ensure the timely
submission of Urgent Market Messages (UMM) to the ENTSO-E Transparency Platform.

3.2.2 Retail market

In the retail market, there are four operators of electricity distribution networks that are
licensed to distribute electricity to customers connected to the distribution network at low and
medium voltage level in the respective designated territories:
- ERM Zapad AD operates on the territory of 10 districts in Western Bulgaria;
- Electrodistribution North AD operates on the territory of 9 districts in North Bulgaria;
- Elektrorazpredelenie Yug EAD operates on the territory of 9 districts in South Bulgaria;
- ERP Zlatni Piasaci AD has a limited geographical area of activity in Varna region.
The market consists of three groups of suppliers from supply point of view:
- Free market supplier - a trader/producer/exchange that supplies electricity to household and
non-household customers at prices based on demand and supply;

- Supplier of last resort (SLR) – a supplier that guarantees the universal service provision as
a last resort in accordance with a license obtained from EWRC. It has the obligation to
supply electricity to customers connected to the distribution network that have not chosen
an electricity trader or when the electricity trader they had chosen failed to provide the
supply due to non-customer reasons. The SLR final selling prices are determined under
EWRC methodology on electricity prices of a supplier of last resort;

- End supplier (ES) - supplies low voltage electricity to sites of household and non-
household end consumers connected to the low voltage electricity distribution network at
regulated prices determined by EWRC.

Energy distribution companies’ market shares, as electricity volumes, distributed through

their own networks, are calculated on the basis of reported by them data for 2022 by ESO EAD. The
largest share of electricity transmission is traditionally for ERM Zapad EAD with 41% or 9 019 917
MWh, the second one is Elektrorazpredelenie Yug EAD with 37% or 8 084 296 MWh and third is

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National Report 2022 Energy and Water Regulatory Commission, Bulgaria
Electrodistribution North AD with 22% or 4 825 929 MWh. The graphic allocation is shown on the
figure below:

From a demand perspective, the retail market consists of two segments: household customers
and non-household customers. Total number of customers connected to distribution companies in
2022 was 5 243 173, of which household – 4 664 328. Total number of customers with an end
supplier was 4 660 949, and total number of customers in the free market, including with SLR, was
582 197.

Household consumer empowerment indicators

Household customers

Consumption in the household customers market decreased in 2022 compared to 2021 by

1.85%. The reported decrease shows that a significant number of small business users have already
concluded a contract with an electricity trader and purchase the volumes they need on the organized
exchange market.

The number of household customers increased from 4 479 397 in 2017 to 4 664 328 in 2022.
The number of household customers that changed supplier was insignificant.

Retail market indicators

2017 2018 2019 2020 2021 2022
(households)

Electricity consumption, MWh 11 068 228 10 965 494 14 729 883 13 979 423 12 088 565 11 865 505

Total number of electricity household

customers
4 479 397 4 495 926 4 513 355 4 544 739 4 586 448 4 664 328

Number of customers at regulated

tariffs
4 476 283 4 493 660 4 511 737 4 541 659 4 581 982 4 660 949

Number of customers supplied by

Supplier of last resort (SLR)
618 213 114 1 233 4 644 3 101

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National Report 2022 Energy and Water Regulatory Commission, Bulgaria
 Number of working days between the
bill payment notification and the
interruption in cases of actual non-
3 to 40 3 to 40 3 to 41 3 to 40 3 to 40 3 to 40
payment

Non-household customers

The number of non-household customers increased from 497 007 in 2016 to 631 433 in 2021,
with a decrease of 8.33% reported in 2022. The average time for switching supplier was between 20
and 30 days for different electricity distribution companies.

Retail market indicators (non-

2016 2017 2018 2019 2020 2021 2022
households)
Number of customers 496 007 605 990 611 588 624 910 629 863 631 433 578 845
Number of customers who switched their
supplier
64 707 86 055 101 932 79 290 20 754 23 920 171 672
Active traders 48 45 46 45 40 40 65
Average time for switching supplier (days) 18 18 18 18 18 18 18

3.2.3 Consumer protection and dispute settlement

The terms and conditions of complaints’ filing and handling are regulated by EA and by the
Ordinance on licensing the activities in the energy sector. EWRC handles complaints of: networks
and facilities users against transmission and distribution network operators, extraction companies,
natural gas storage facilities operators and LNG operators, related to the way these entities perform
their duties under EA; customers against electricity and natural gas suppliers, including end suppliers
regarding their duties’ performance under EA; as well as licensees against other licensees regarding
their duties’ performance under EA.

Within two months of filing a complaint, EWRC may assist an amicable dispute settlement.
The term may be extended by another two months if the nature of the dispute requires collecting
additional data and information by EWRC. The procedure is voluntary and confidential. Under the
amicable disputes’ settlement EWRC does not make a ruling/decision and the procedure ends with
an agreement.

In case no amicable settlement has been achieved or the parties reject amicable settlement,
EWRC shall decide on the complaint within two months after receiving it. That period may be
extended with another two months if the character of the dispute requires gathering of additional
data and information by EWRC. With the agreement of the appellant, the extended period may be
extended with two more months. When EWRC finds a complaint being justified, it issues a decision
with binding guidelines on the implementation of the law. EWRC decisions are subject to appeal
before the Administrative Court - Sofia City within a 14-day period of their notification.

In 2022 the total number of electricity complaints filed in EWRC was 1 539; 1 354 of them
were against licensed companies in the electricity sector and under the provisions of art.22, para.1 of
EA, administrative proceedings have been started.

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National Report 2022 Energy and Water Regulatory Commission, Bulgaria
 The greatest number of complaints was against ERM Zapad EAD and Electrohold Sales
EAD. Next were complaints against Electrodistribution North EAD and ENERGO-PRO Sales AD,
followed by Elektrorazpredelenie Yug AD and EVN Bulgaria Elektrosnabdiavane EAD. No
complaints were filed against Elektrorazpredelenie Zlatni Piasatsi AD and ESP Zlatni Piasatsi OOD.
Complaints against enterprises licensed for electricity trade activities mainly concerned contractual
relations between the parties.

In 2022, 13 complaints were filed against ESO EAD. No complaints against NEK EAD have
been registered.

In 2022, EWRC received 672 complaints from household customers against licensed
electricity sector enterprises.

In EA, Chapter Three: Regulation of the activities in the Energy Sector, Section VI:
Measures for Protection of Energy Service Clients of the Energy Act regulates the protection
measures for power consumers that involve also:
- regulated mandatory content of the contracts signed with energy services customers;
- information provided by the energy enterprises that are contracting parties in the contracts with
energy customers;
- energy enterprises draft and present for approval to EWRC rules on their work with consumers of
energy services;
- energy enterprises, supplying energy, shall establish informational centres for consumers of
energy services, as well as information on the work with them;
- energy enterprises, providing services of public interest shall determine special procedures for
providing vulnerable consumers with information, related to consumption and supply termination
to vulnerable consumers in the general conditions of supply and use of networks and in the rules
on work with consumers of energy services;
- end suppliers shall inform customers, together with the last month invoice of every semester,
when the electricity or natural gas metered consumption of the end customers in the said semester
was higher by more than 50% of the metered consumption in the respective semester of the
preceding calendar year;
- the customer may request from the electricity distribution network operator to carry out
metrological expert check of commercial measuring device;
- where by initiative of the end supplier the electricity or natural gas supply to the customer is to be
terminated, the end supplier shall be obliged to notify the customer thereof by a method chosen
by the latter, not later than three days before the date of supplies termination. If the customer has
not stated a specific method of notification, notification would be done by a method at end
supplier’s option.
In fulfilment of its powers, EWRC monitors the implementation of the regulated legal
measures on energy services consumers’ protection.

As per art.59, para 1(t) of the Directive (EU) 2019/944 of the European Parliament and of the
Council of 5 June 2019 on common rules for the internal market for electricity and amending
Directive 2012/27/EU, the regulatory authority shall have the duty to ensure non-discriminatory
access to customer consumption data, the provision, for optional use, of an easily understandable
harmonised format at national level for consumption data, and prompt access for all customers to
such data pursuant to Articles 23 and 24 of the Directive.

As per art.38b, para.1, items 3 and 8 of EA, energy enterprises - contracting parties - shall
provide for their consumers of energy services information on: actual quantities consumed and

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National Report 2022 Energy and Water Regulatory Commission, Bulgaria
provided service value in accordance with the agreed metering frequency at no additional cost of that
service; the conditions for providing electronic billing information and electronic bills.

In accordance with art.38b, para.2 of EA, the energy supplier shall provide to its customers a
wide selection of payment methods, including advance payment systems, which shall be fair and
adequately representing the potential consumption.

Art.38b, para.3 of EA stipulates that the energy supplier shall provide to another energy
supplier information of a household customer’s consumption, if so provided in an explicit agreement
between the customer and the energy supplier.

These provisions guarantee customers’ access to data on energy consumption and their provision and
use in an easily understandable format.

4. NATURAL GAS MARKET

4.1. Network regulation

In exercising its regulatory powers, EWRC is guided by the following basic principles:
development of competitive and well-functioning regional markets within the European Union;
preventing restriction or distortion of competition on the energy market; creating incentives for
competitive energy market development, where the conditions so permit; creating incentives for
effective development of secure, reliable and efficient networks in accordance with the customers
interests. EWRC monitors gas networks development for the benefit of all participants, which will
ensure sufficient and available capacity for all, monitors prevention and distortion of market
competition and its effective functioning, monitors the degree and efficiency of natural gas market
opening. EWRC monitors the security of supply, ensuring a balance between natural gas supply and
demand on the national market, the level of expected future consumption and the estimated
additional capacity under planning or construction, and the quality and level of networks
maintenance and overcoming the shortage of suppliers or traders.

4.1.1. Network and LNG tariffs for connection and access

Prices for network connection, access and transmission of natural gas through transmission
and/or distribution networks shall be subject to regulation by EWRC, except in the cases when the
Regulator at its discretion approves a methodology determining the price for access and transmission
through the transmission network. EWRC regulates and determines the terms and conditions of price
formation for connection to gas transmission and distribution networks.

Regarding the prices for access and transmission of natural gas through the transmission
network, EWRC has approved the Methodology for determining prices for access and transmission
of natural gas through the gas transmission networks, owned by Bulgartransgaz EAD. According to
Art.18a, para 1 of the Methodology for each price period by 1 March, the operator shall submit to
the Regulator a proposal for: entry and exit points/zones for which access and transmission prices
are set; access pricing coefficients for booking short-term capacity products based on the price of
reference firm capacity; seasonal multipliers to determine the prices for the reservation of short-term
capacity products; discount on the formation of access prices for booking interruptible capacity
products; discount in determining access prices for entry/exit points to/from natural gas storage
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National Report 2022 Energy and Water Regulatory Commission, Bulgaria
facilities; discount on the formation of access prices for entry points from liquefied natural gas
(LNG) facilities and for entry points from and exit points to infrastructure designed to overcome the
isolation of Member States with regard to their transmission systems. EWRC shall adopt a decision
to approve the multipliers, seasonal factors and discounts after carrying out a consultation in
accordance with Art. 28 of Commission Regulation (EU) 2017/460 of 16 March 2017 establishing a
network code on harmonised transmission tariff structures for gas (Regulation (EU) 2017/460) -
art.18a, para 2 of the Methodology. By decision № M-1 of 1.06.2022 EWRC approved pricing
elements for Bulgartransgaz EAD for the period 01.10.2022 - 30.09.2023. Pursuant to Art.21 of the
Methodology, the tariff structure of prices for access and transmission of natural gas through the gas
transmission system shall be determined by the operator. On the basis of the revenue requirements
and pricing elements approved by decisions EWRC Decisions № НГП-1 of 2.10.2020 and № M-1 of
21.06.2022 Bulgartransgaz EAD has set prices for access and transmission through the gas
transmission networks owned of Bulgartransgaz EAD, for the gas year 01.10.2022 - 30.09.2023.
Access and transmission prices have been published on Bulgartransgaz EAD website
https://www.bulgartransgaz.bg/files/useruploads/files/prozrachnost-
tarifi/TAR%20Period%202022_2023/Prices_2022-2023.pdf

With regard to IGB interconnector, EWRC together with the Energy Regulatory Authority of
Greece adopted a decision approving amendments to the IGB Tariff Code determining ICGB AD
tariff, which is used to calculate capacity fees for capacity booking requests. The tariff depends on
the requested capacity product and the entry or exit point at which capacity is booked.

Prices for natural gas access and transmission through the gas distribution network may
include the following components: access price (capacity price) and transmission price (price for
transported natural gas quantities) under the contract for transmission through the gas distribution
network. The transmission price through the distribution network shall be formed on the basis of the
approved annual revenue requirements for the approved estimated natural gas quantity for
distribution. According to Art.44, para 4 of EA any persons whom have been granted natural gas
distribution licenses shall not be granted licences for other activities, subject to licensing under EA,
except licences for natural gas supply from an end supplier, if the customers connected to the gas
distribution network in the respective area are less than 100 000. EWRC has also issued licenses for
the activity “natural gas supply by end supplier” to the companies holding a license for the activity
“natural gas distribution”. Prices for natural gas supply by end suppliers to customers connected to
the respective gas distribution networks shall be determined on the basis of purchasing natural gas
costs and approved estimated annual revenue requirements for natural gas supply. In exercising its
regulatory powers with regard to price regulation, the Regulatory Authority is guided by the
principles under Art.23 and Art.31 of EA. According to Art.3, para 2, item 2 of ONGPR, when
applying the “price cap” method for gas distribution companies, the regulatory period lasts from 2 to
5 years. The gas distribution companies’ price regulatory period allows for avoiding large price
fluctuations over the years and ensures predictability for the end customers. Energy companies shall
submit applications for price approval no later than three months before the expiry of the previous
price period.

There is one underground gas storage facility in Bulgaria – Chiren UGS, built on the depleted
gas condensate field site near the village of Chiren, Vratsa region. Bulgartransgaz EAD is the owner
and operator of Chiren UGS and provides natural gas storage services based on license № Л-214-10
of 29.11.2006 for natural gas storage issued by EWRC. Chiren UGS is connected to Bulgartransgaz
EAD gas transmission network. UGS main purpose is to cover seasonal irregularities in consumption
and guarantee security of natural gas supply. Tariff structure for natural gas access and storage in the
storage facilities is proposed by the operator according to Art. 53 of the Guidelines on pricing
natural gas access and storage in storage facilities (published State Gazette, № 2 of 9 January 2015)

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National Report 2022 Energy and Water Regulatory Commission, Bulgaria
applying “rate of return on capital” regulation. Вy Decision № Ц-34 of 13.08.2020, EWRC has
approved prices for natural gas access and storage in the storage facilities to Bulgartransgaz EAD.

4.1.2. Balancing

Natural gas market balancing is performed on the basis of the approved by EWRC Natural
Gas Trading Rules, Natural Gas Market Balancing Rules and a Daily Imbalance and Neutrality
Charge Calculation Methodology (Imbalance Methodology).

Natural Gas Market Balancing Rules set a balancing regime in accordance with Commission
Regulation (EU) № 312/2014 of 26 March 2014 establishing a Network Code on Gas Balancing of
Transmission Networks (Regulation (EU) № 312/2014). Conditions have been created for the
transmission system operator and all market participants to conclude transactions for short-term
standardized products through a natural gas trading platform. The possibility to offer natural gas for
purchase and sale through market mechanisms was enabled, so that network users can balance their
balance portfolios efficiently and that the transmission system operator can use flexible natural gas
products in balancing the transmission network aiming to increase natural gas market liquidity and
transparency in transactions with short-term products. Imbalance methodology ensures non-
discriminatory imbalance charges formation for transmission system users, creating conditions for
efficient management of their balance portfolios, as well as for their responsible balancing of
incoming and outgoing quantities of natural gas. Full compliance with Regulation (EU) № 312/2014
has also been achieved, in particular with the imbalance charge and the neutrality charge
requirements and the credit risk management mechanisms. Clear conditions for imbalance and
neutrality charges calculation have been created, both for transmission system operator and for all
market participants. Network users are able to balance their balance portfolios, and prerequisites for
disciplining them are established. Implementation of the methodology aims to increase short-term
gas market liquidity on the territory of the country through Transparent and non-discriminatory rules
as well as transparent imbalance charges, reflecting the actual balancing costs shall increase the
short-term gas market liquidity in the country.

4.1.3. Cross-border issues

Transparency requirements concerning transmission system operators are set in Art.18 of

Regulation (EC) № 715/2009 of the European Parliament and of the Council of 13 July 2009 on
conditions for access to the natural gas transmission networks and repealing Regulation (EC) №
1775/2005. Each transmission system operator shall make public information on technical,
contracted and available capacities on a numerical basis for all relevant important points including
entry and exit points on a regular and rolling basis and in a user-friendly and standardised manner.
According to Art.18, paragraph 4 of Regulation (EC) № 715/2009, the relevant points of a
transmission system on which the information is to be made public shall be approved by the
competent authorities after consultation with network users. In this regard, by Decision № ВТ-1 of
30.09.2022 ЕWRC approved an updated list of important points of Bulgartransgaz EAD
transmission system, for which information on the technical, contracted and available capacities is
publicly disclosed in accordance with Regulation (EC) № 715/2009. The update is related to the
commissioning of the interconnection point between Bulgartransgaz EAD and ICGB AD, as well as
the infrastructure construction to connect Bulgartransgaz EAD and SRBIJAGAS gas transmission
networks.

In 2022 EWRC and the Energy Regulatory Authority of the Republic of Greece (RAE)
adopted a Final Joint Decision on the certification of ICGB AD as an independent transmission
operator.
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National Report 2022 Energy and Water Regulatory Commission, Bulgaria
 By Decision № K-1 of 30.09.2022 EWRC adopted a Joint Decision of the Energy and Water
Regulatory Commission and the Energy Regulatory Authority of the Republic of Greece on the
amendment of the IGB Network Code and its annexes.

In September 2022 EWRC and RAE approved the amendment of the Final Joint Decision of
the Energy and Water Regulation and the Energy Regulatory Authority of Greece on the Exemption
Application of ICGB AD, as the gas pipeline’s commercial operation date was changed from 1 July
2022 to 1 October 2022. On 30 September 2022 EWRC adopted a decision to authorize the start of
the licence activity for natural gas transmission by ICGB.

By Decision № K-2 of 17.11.2022, EWRC adopted a Joint Decision of the Energy

Regulators on the amendment of the Gas Transmission Agreement for non-exempted network users
and Annex C to the IGB Network Code.

4.1.4. Implementation of network codes and guidelines

 Capacity Allocation Mechanisms NC (CAM NC)


Pursuant to Commission Regulation (EU) 2017/459, Bulgartransgaz EAD has introduced an
electronic capacity booking platform - Regional Booking Platform (RBP). On the RBP platform
network users book capacity at entry and exit gas transmission network points, using standard
capacity allocation mechanisms as required by CAM NC. Registered network users have the right to
book and use capacity products in the national gas transmission network. The procedures for
allocating annual, quarterly, monthly, daily and intraday capacity products shall be carried out
according to the timetables set out in the Capacity Auction Calendar published by ENTSO-G.

Bulgartransgaz EAD cooperates with the adjacent transmission network operators in order to
coordinate the maintenance (network repairs) in accordance with Art.4 of Regulation (EU)
2017/459. The Bulgarian TSO regularly exchanges information with the adjacent transmission
network operators as per Art.7 of Regulation (EU) 2017/459 on the basis of the Interconnection
Agreements concluded. Firm capacity products, announced by Bulgartransgaz EAD, go through a
bundling procedure under Art.19, §1 of Regulation (EU) 2017/459. If impossible to ensure the
bundling at RBP of firm capacity products, as well as in case of differences between the technical
and bundled capacities, these capacities shall be offered as unbundled capacity products (providing
capacity at the respective interconnection point only in Bulgartransgaz EAD gas transmission
network).

Pursuant to the provisions of Regulation (EU) 2017/459, ICGB AD has implemented and has
been using electronic capacity booking platforms. ICGB AD network users have the opportunity to
request capacity through auctions on PRISMA and RBP capacity booking platforms. Auctions for
the interconnection points at Komotini with the transmission system operators TAP and DESFA
have been performed on PRISMA. Auctions for the interconnection point at Stara Zagora with the
Bulgarian TSO Bulgatransgaz EAD, as well as for the exit point at Kardzhali have been held on
RBP. Available capacity is offered in accordance with the ENTSO-G auction calendar.

 Balancing NC (BAL NC)


In compliance with Regulation (EU) № 312/2014, the gas TSO Bulgartransgaz EAD has
admitted the Balkan Gas Hub EAD trading platform for natural gas trade as complying with
Regulation requirements and criteria. EWRC has approved the Balkan Gas Hub EAD Trading
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National Report 2022 Energy and Water Regulatory Commission, Bulgaria
Platform and has designated the company as an operator of the trading platform. Trading on the
platform shall be carried out on an anonymous basis, in accordance with the provisions of
Regulation (EU) № 312/2014. Through the platform, trading participants may post and accept, as
well as revise and withdraw, bids and offers for gas purchase and sale in order to meet short term
fluctuations in gas demand or supply, under the applicable rules of the trading platform, on which
the transmission system operator trades for balancing actions. The trading platform offers short-term
standardized products intraday and day-ahead. The platform complies with the requirements of
Regulation (EU) № 312/2014 regarding the transaction notification content, the continuous trading
regime for short-term standardized products, as well as the types of such products, the criteria to be
met by the trading platform for providing trading participants with sufficient information to confirm
the transaction after its conclusion, as well as to submit transaction notifications to the transmission
system operator and to provide information on the change of the marginal purchase price and the
marginal selling price after each transaction.

Marginal purchase and sale prices applicable for the purposes of determining the imbalance
charge by the transmission system operator shall be calculated in accordance with the terms and
conditions of the Daily Imbalance and Neutrality Charge Calculation Methodology, and shall be
published by the transmission system operator. In 2022 the small adjustment to the natural gas
balancing price was 8%.

For the purposes of balancing the natural gas market, the TSO introduced a Commercial
Dispatching Platform (CDP), which assumed the functions of a virtual trading point (VTP). It has
been operational since 1 January 2017. Network users and traders have access to CDP with
individual credentials where they can submit their bids, transaction notifications and receive data on
their imbalances every hour, as well as daily and monthly reports. Trade notifications are submitted
directly to the CDP. A re-nomination procedure cycle has been introduced in accordance with
Regulation (EU) № 312/2014 at both interconnection points, as well as at all entry and exit points in
the country.

The TSO procures balancing services carried out on a market basis, through a transparent and
non-discriminatory public tender procedure according to the Natural Gas Market Balancing Rules
approved by EWRC, concluding gas supply contracts at the gas transmission system entry point with
a maximum duration of one year. The contracts shall be concluded after a transparent, non-
discriminatory and market-based procedure and in accordance with the maximum amount of
possible natural gas imbalances in the gas transmission network. Purchased gas pursuant to Art.8 (b)
(a) of Regulation (EU) № 312/2014 shall be stored in the TSO’s gas storage facility – Chiren UGS
and shall be used (extracted and injected) when necessary, depending on the cumulative imbalances
of network users.

Pursuant to Regulation (EU) № 312/2014, ICGB AD provides network users with access to a
virtual trading point (VTP) for balancing trading portfolios. ICGB AD VTP is included as a separate
segment of the Balkan Gas Hub EAD trading platform. ICGB AD also has implemented a Daily
Imbalance Charge Calculation Methodology for IGB, approved by EWRC and the Greek regulatory
authority RAE.

 Interoperability and Data Exchange NC


In compliance with Commission Regulation (EU) № 703/2015 of 30 April 2015 establishing
a network code on interoperability and data exchange rules, the TSO Bulgartransgaz EAD has
signed Interconnection agreements (IA) with the Romanian gas TSO TRANSGAZ SA and Greek
gas TSO DESFA SA for the interconnection points Negru Voda 1/Kardam IP, Negru Voda
2,3/Kardam IP, Ruse/Giurgiu IP and Kulata/Sidirokastron IP. Essential parts of IA are common
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National Report 2022 Energy and Water Regulatory Commission, Bulgaria
nomination and re-nomination procedures for booking capacity products, as well as a default
nomination rule establishment.

In compliance with Commission Regulation (EU) № 703/2015, the ICGB AD has signed an
Interconnection Agreement with the gas transmission system operator TAP for the Komotini TAP-
IGB IP, as well as with Bulgartransgaz EAD for Stara Zagora Bulgartransgaz-IGB IP.

 Tariff (TAR NC)


Regulation (EU) 2017/460 provides for the obligation to carry out consultations on the
proposed reference price methodology. Pursuant to Article 6 (1) of Regulation (EU) 2017/460, the
reference price methodology shall be set or approved by NRA as referred to in Article 27 of
Regulation (EU) 2017/460. The reference price methodology to be applied shall depend on the
findings of the periodic consultations carried out in accordance with Article 26 by TSO or NRA, as
decided by NRA.

In connection with the above, by Decision № РТПГ-1 of 01.12.2017, pursuant to Article 6

(1), Article 26 (1) and Article 30 of Regulation (EU) 2017/460, EWRC has designated
Bulgartransgaz EAD, in its capacity as a gas transmission system operator, to conduct consultations
under Article 26 of Regulation (EU) 2017/460, as well as to publish before the tariff period
beginning the information under Art. 30 and the conditions set in the Regulation. Pursuant to
Regulation (EU) 2017/460 and EWRC decision, Bulgartransgaz EAD held a consultation on
the proposed methodology for reference price, as well as the related data, justifications and
elements according to Art.26 of Regulation (EU) 2017/460.

With regard to multipliers, seasonal factors and discounts for each tariff period, pursuant to
Article 28(2) of Regulation (EU) 2017/460, an obligation to carry out subsequent consultations with
the national regulatory authorities of directly connected Member States and with relevant
stakeholders is foreseen, and after this consultation the national regulatory authority shall take a
motivated decision on the multipliers and seasonal factors levels and the calculations referred to in
Article 15 of Regulation (EU) 2017/460; the discounts values referred to in Article 9, paragraph 2
and Article 16 of Regulation (EU) 2017/460. In this regard, the consultation document regarding the
multipliers, seasonal factors and discounts that the TSO Bulgartransgaz EAD will apply for
determining the transmission tariffs for the 2023/2024 gas year has been provided to the Regulatory
Authority for Waste, Energy and Water of the Republic of Greece and to the Romanian Energy
Regulatory Authority for their opinion. Following the consultation, by EWRC decision multipliers,
seasonal factors and discounts to determine access prices for short-term capacity products for the
period 1 Oct 2023 – 30 Sep 2024 were approved to the TSO.

4.2. Competition and market functioning

In 2022, key natural gas market participants in the country were:

- Bulgartransgaz EAD – combined operator, performing gas transmission and gas storage
activities;
- ICGB AD - Gas Interconnector Greece-Bulgaria (IGB) operator;
- Bulgargaz EAD – public provider, ensuring gas supplies to end suppliers and to persons
who have been issued a license for heat production and transmission at prices regulated by EWRC.
The company also holds a license for the activity of natural gas trading issued by EWRC;
- Gas extraction companies – carrying out natural gas extraction on the territory of the
country;

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National Report 2022 Energy and Water Regulatory Commission, Bulgaria
 - Gas traders – concluding gas supply transactions with the public provider, end suppliers,
customers, other gas traders, production companies, gas storage undertakings and with gas
transmission and distribution network operators;
- Gas distribution companies – performing activities “natural gas distribution” and “natural
gas supply by end suppliers” and delivering natural gas to customers connected to the distribution
networks in the respective licensed territories;
- Non-household customers connected to the gas transmission network;
- Non-household and household customers connected to the gas distribution network;
- Market Makers – entities that have concluded an agreement with the natural gas exchange
market operator for natural gas demand and supply with the purpose to provide liquidity on the
natural gas exchange market and forming price signals;
- Liquidity Providers – entities that have concluded an agreement with the natural gas
exchange market operator for demand and supply of natural gas with the purpose to provide liquidity
on the natural gas exchange market.

Bulgartransgaz EAD

According to EA, the gas transmission network operator shall be obligated to make gas
transmission network extension and reconstruction related to the connection of the gas distribution
networks facilities, mining enterprises, natural gas storage facilities, LNG facilities and facilities for
gas production from renewable sources, as well as non-household customers.

The total length of Bulgartransgaz EAD gas transmission networks as of the end of 2022 was
3318 km. In 2022, a new gas transmission network with a length of 42 km was built, and no new
facilities were built. The company’s investments made in the transmission system amounted to BGN
95 351 330. There were 228 customers connected to the Bulgartransgaz EAD gas transmission
networks.

EWRC shall approve for Bulgartransgaz EAD a ten-year network development plan of the
transmission network and shall monitor and control its implementation. In drawing up the 10-year
plan, the transmission system operator shall take into account the information available on upcoming
changes in production, supply, consumption and exchange with other countries, investment plans for
regional networks and networks within EU, as well as natural gas storage facilities investment plans.
The Regulator shall consult all current or potential network users on the 10-year network
development plan of the transmission network in an open and transparent manner. By Decision №
ДПМР-2 of 02.12.2022, EWRC approved the Ten-Year Network Development Plan of
Bulgartransgaz EAD for the period 2022-2031.

The structure of gas transmission network users who carried out transmission in 2022 was as
follows:
- public provider;
- two end suppliers;
- one non-houshold customer
- twenty-six natural gas traders.

In 2022, natural gas quantities from imports and local production transported by
Bulgartransgaz EAD through the gas transmission network for the domestic and foreign markets
were 163 593 503 MWh and are presented in the graph:

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National Report 2022 Energy and Water Regulatory Commission, Bulgaria
 Natural gas quantities transported by Bulgartransgaz EAD in 2022 are indicated in the graph:

For balancing the network, in 2022 Bulgartransgaz EAD made transactions at a VTP, selling
564 237 MWh and purchasing 4 988 MWh (green – residual imbalance, red – sales on VTP, blue –
purchased on VTP).

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National Report 2022 Energy and Water Regulatory Commission, Bulgaria
 Currently there is only one underground gas storage facility in Bulgaria – Chiren UGS,
which has 24 exploitation wells, a compressor station with a total installed capacity of 10 MW and
other technological facilities needed to ensure the injection, production and quality of stored natural
gas. Chiren UGS is operated by Bulgartransgaz EAD. The investments made in the storage facility in
2022 amounted to BGN 195 000. In 2022, 6 407 381 MWh of natural gas were injected in Chiren
UGS, incl. 2 816 028 MWh under the Emergency Action Plan and 3 591 352 MWh commercial
storage. Natural gas extracted in 2022 amounted to 4 263 011 MWh, incl. 2 832 683 MWh under the
Emergency Action Plan and 1 430 328 MWh commercially stored natural gas. Stored natural gas for
2022 was 4 698 418 MWh, incl. 2 968 343 MWh under the Emergency Action and 1 730 076 MWh
commercial storage. Through the gas quantities stored at Chiren UGS, seasonal fluctuations in
supply and consumption in the country are compensated. The UGS has essential role to ensure
security of gas supply in the country, provision of balancing gas, as well as to maintain gas
transmission system security and stability.

ICGB AD

IGB interconnector started commercial operation on 1 October 2022. ICGB AD is the owner
of IGB. IGB connects the Greek gas transmission network near the town of Komotini with the
Bulgarian transmission network at Stara Zagora. The interconnector is also connected to the
Transatlantic Pipeline (TAP). The overall length of IGB is 182 km (151 km in Bulgaria and 31 km in
Greece) and a technical capacity of 3 bcm that could be increased to 5 bcm per year by building a
compressor station.

IGB entry and exit capacity in the forward direction Greece – Bulgaria is 97 000 MWh/d and
in the opposite direction Bulgaria – Greece - 87 000 MWh/d.

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National Report 2022 Energy and Water Regulatory Commission, Bulgaria
 The total natural gas transported by ICGB AD through the pipeline for October, November
and December 2022 was: 4 875 908 MW in direction Greece – Bulgaria and 18 500 MWh in
direction Bulgaria – Greece. In 2022, the company did not buy or sell natural gas for balancing. The
maximum daily natural gas transported was 88 252 MWh/d.

The investments made in 2022 in the IGB pipeline and its facilities amounted to BGN 100
538 000.

4.2.1. Wholesale markets

The main quantities of natural gas needed for domestic consumption are provided by imports
with a small part of local production. Natural gas supply on the territory of the Republic of Bulgaria
is carried out through a gas transmission network owned by Bulgartransgaz EAD for directly
connected customers and through gas distribution networks (GDN), owned by the relevant gas
distribution companies to which non-household and household customers are connected. Through
the gas transmission network, natural gas is also transferred to neighbouring countries of the
Republic of Bulgaria, as well as from and to Chiren UGS. In 2022 natural gas supply for the local
market was carried out by Bulgargaz EAD, Gas Exploration and Production AD,
Petroceltic Bulgaria EOOD and natural gas traders.

Bulgargaz EAD

In 2022 main natural gas supplies for the local market were realized by Bulgargaz EAD. The
company purchased natural gas for the domestic market under gas supply contract with OOO
Gazprom Export (until April 2022), under a contract with an Azerbaijani company and from natural
gas traders.

Bulgargaz EAD has purchased 30 042 342 MWh of natural gas from imports to ensure its
customers demand. Natural gas purchased on the gas exchange market was 4 772 675 MWh. Natural
gas purchased by Bulgargaz EAD from Bulgartransgaz EAD for balancing was 164 061 MWh.
Natural gas sold by Bulgargaz EAD to Bulgartransgaz EAD for balancing was 406 893 MWh.

Natural gas sold by Bulgargaz EAD in Bulgaria was 28 974 345,484 MWh and natural gas
sold abroad – 106 422 620 MWh.

Consumption structure of the natural gas sold by Bulgargaz EAD in 2022 was as follows:
- energy sector – 9 036 746 MWh;
- chemical industry – 4 592 553 MWh;
- distribution companies – 3 637 861 MWh;
- metallurgy – 949 247 MWh;
- regional development and construction sector – 351 274 MWh;
- glass industry – 1 705 120 MWh;
- agriculture – 664 969 MWh;
- other – 483 108 MWh.

Demand structure by industry is presented in the chart below:

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National Report 2022 Energy and Water Regulatory Commission, Bulgaria
 In 2022 Bulgargaz EAD sold natural gas to end suppliers, district heating companies,
customers connected to the gas transmission network and natural gas traders. Share sales per clients
are presented in the chart below:

In 2022 Bulgargaz EAD sold to clients in Bulgaria the following quantities of natural gas:

- at regulated prices – 12 380 868 MWh;

- under the natural gas release programme – 6 252 432 MWh;
- at freely negotiated prices – 10 341 046 MWh.

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National Report 2022 Energy and Water Regulatory Commission, Bulgaria
 Natural gas quantities stored by Bulgargaz EAD in Chiren UGS, including the available
storage, withdrdrawal and injection capacity in 2022, were as follows:
- available storage capacity as of 1 Jan 2022 – 2 071 621,192 MWh;
- withdrawal capacity – 2 507 552,629 MWh;
- injection capacity – 3 373 899,035 MWh;
- available storage capacity as of 31 Jan 2022 – 2 937 967,598 MWh.

Bulgargaz EAD customers’ structure as of 31 Dec 2022 was as follows:

- at regulated price – 28;
- at freely negotiated price – 151;
- under gas release programme – 17;
- on Bulgartransgaz EAD network VTP – 1;
- on the anonymous segment – 27, incl. 24 on Balkan Gas Hub and 3 on BETP AD.

Extraction companies

Oil and Gas Exploration and Production AD and Petroceltic Bulgaria EOOD are the
extraction companies in the country. The quantities of natural gas produced in the country in 2022
are as follows:

In 2022 Oil and Gas Exploration and Production AD extracted 63 827 MWh of natural
gas and sold 57 465 MWh, of which 18 253 MWh were sold to one end customer, 18 633 MWh to
two gas distribution companies and 20 582 MWh to two traders. The remaining quantities were for
the company's own use. The extraction company sold no natural gas on the gas exchange market.

Petroceltic Bulgaria EOOD extracted 111 155 MWh of natural gas in 2022, which it sold to
two natural gas traders. The company offered and sold 13 636,832 MWh natural gas on the gas
exchange market.

Natural gas traders

In 2022, EWRC issued 31 natural gas trade licenses, and as of 31.12.2022 the Regulator
licensed 75 companies for natural gas trade activity. The companies that traded natural gas in 2022
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National Report 2022 Energy and Water Regulatory Commission, Bulgaria
purchased 37 288 145 MWh, including: 12 657 966 MWh on the gas exchange market in Bulgaria
and 24 630 179 MWh outside the organized exchange market in Bulgaria. The sold natural gas
amounted to 37 235 272 MWh, including: 14 224 927 MWh on the organized exchange market in
Bulgaria and 23 010 345 MWh outside the organized exchange market in Bulgaria. Licensed natural
gas traders transported 6 288 102 MWh natural gas, purchased outside Bulgaria, through the territory
of the country from entry to exit interconnection point.

Purchased and sold quantities on the gas exchange market and outside it are presented in the
following graph:

Natural gas exchange markets

Balkan Gas Hub EAD trading platform

The number of registered Balkan Gas Hub EAD members as of 31.12.2022 was 64, of which
about 40% were international companies with experience in trading natural gas on European markets
and managed a rich portfolio. The remaining 60% of the participants were local natural gas traders,
among whom large industrial natural gas consumers in the country. Compared to 2021, the number
of platform members increased by 28% (from 50 to 64).

The short-term segment of the trading platform offers short-term standardized products
intraday and day ahead as well as temporal and locational products for the TSO network balancing
purposes. The long-term segment of the trading platform offers products traded on a medium and
long-term basis - weekly, monthly, quarterly and calendar year(s). Balkan Gas Hub EAD also
provides an opportunity to administer bilateral contracts.

In 2022, 7 698 transactions were concluded on Balkan Gas Hub EAD trading platform and a
total of 16 324 870 MWh natural gas was traded, including from Bulgartransgaz EAD, on the
different segments, as follows:

Short term segment

Number of transactions on the short-term segment increased from 5 188 in 2021 to 7 246 in
2022. In January 2022 there were 441 transactions, reaching their highest number in November 2022
– 856 transactions. The average monthly number of transactions during the year was 604. Traded
quantities increased from 2 476 085 MWh in 2021 to 4 137 162 MWh in 2022.
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National Report 2022 Energy and Water Regulatory Commission, Bulgaria
 Long-term segment (including VTP transactions and a brokerage service)
Number of transactions on the long-term segment decreased from 1 292 in 2021 to 452 in
2022. The decrease happened due to the administration of Bulgargaz EAD contracts for 2022 on
another platform. In January 2022 there were 24 transactions, and in December 2022 there were 157
transactions, which was the highest number in the reporting year. The average monthly number of
transactions during the year was 38. Traded quantities increased from 10 195 742 MWh in 2021 to
12 187 708 MWh in 2022.

The lowest price reached on the trading platform for a monthly product was BGN
75.00/MWh in February 2022, and the highest price reached for a monthly product was BGN
480.00/MWh in March 2022. The largest amount of natural gas for a monthly product was realized
in December 2022 in the amount of 2 321 979 MWh, and the smallest amount was realized in
January 2022 in the amount of 127 937 MWh.

6 252 432 MWh of natural gas were realized on the trading platform under the gas release
programme (GRP). During the reporting year, 21 users out of 64 registered users were eligible to
participate as potential buyers in the auctions under the gas release programme based on agreements
signed with Balkan Gas Hub EAD for participation in this market segment. Auctions under the
natural gas release programme shall be conducted in accordance with the auction calendar published
on Balkan Gas Hub EAD website, agreed with the public provider. 6 252 432 MWh of natural gas
realized by Bulgargaz EAD under the gas release programme represented 98.59% of the minimum
natural gas quantities determined in EA for the year – 6 342 000 MWh. In connection with the
supplies termination under one of the long-term contracts, part of the tenders according to the
calendar for 2022 was not held.
By EA amendment, the gas release programme was terminated at the end of 2022.

Brokering services - through which products and services for end customers are offered to
natural gas consumers and end suppliers directly connected to the gas transmission system, who do
not have access to the gas transmission networks and to VTP, but would like to purchase natural gas
at exit points from registered BGH members for their own needs. In this case, the end customer/end
supplier has the status of a non-trading user and shall not pay membership and transactions fees
under the applicable price list. A non-trading user shall be entitled to use BGH brokering services by
signing a Brokering Services Agreement, and shall be granted with special rights to access a
specialized section of BGH website. A non-trading user shall not have access to the trading
platform's screens, but shall purchase quantities at the exit point to which it is connected through
registered BGH members. The total number of transactions under the BGH brokering service for the
reporting year was 273.

Bulgarian Energy Trading Platform AD trading platform

As of 31.12.2022, 13 members were registered on the Bulgarian Energy Trading Platform

AD (BETP AD) exchange market. By the end of 2022, 29 transactions were concluded for a total of
265 661 MWh.
The total volume traded in 2022 by product was as follows:
- intraday – 3 transactions, 540 MWh;
- day ahead – 11 transactions, 8400 MWh;
- individual day – 3 transactions, 3720 MWh;
- weekend and holiday – 4 transactions, 2600 MWh;
- month –1 transaction, 31,000 MWh;
- bilateral contracts – 7 transactions, 219 401 MWh.

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National Report 2022 Energy and Water Regulatory Commission, Bulgaria
 BETP AD forms indexes that reflect the traded products price levels, formed by products
traded on BETP AD market, as follows:
- Volume Weighted Average Price – VWAP;
- Reference price (Reference price) – RP;
- Weighted average price for delivery over a calendar month - BETPDMI.

For each of the trading months in 2022, BETPDMI is as follows: January – BGN
134.43/MWh; February – BGN 111.50/MWh; March – BGN 117.74/MWh; April – BGN
145.69/MWh; May – BGN 163.72/MWh; June – BGN 142.94/MWh; July – BGN 188.29/MWh;
August – BGN 299.61/MWh; September – BGN 355.32/MWh; October – BGN 235.84/MWh;
November – BGN 125.34/MWh and December – BGN 147.73/MWh.

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National Report 2022 Energy and Water Regulatory Commission, Bulgaria
 4.2.2. Retail market

Non-household customers and gas distribution networks are connected to Bulgartransgaz

EAD gas transmission network.

The number of non-household customers connected to the gas transmission network at the
end of 2022 was 228. Most of the gas distribution networks in the country are also connected to the
gas transmission network. Three gas distribution networks are connected to domestic extraction
facilities and receive natural gas from local extraction, and two of these networks simultaneously
receive alternative supplies. In eleven gas distribution networks gas supply is carried out by trucks
delivering natural gas with bottles, due to the lack of connection between the distribution networks
and the transmission network.

The main supplier of customers connected to the gas transmission network is Bulgargaz EAD
(191 customers by the end of 2022). Supplies to those customers have also been carried out by
natural gas traders.

At the end of 2022, 24 DSO companies licensed for the activities “natural gas distribution”
and “natural gas supply from an end supplier”, operate in 35 license territories of Bulgaria, covering
173 municipalities, representing 65% of all municipalities in the country. Non-household and
household customers are connected to the gas distribution networks of these companies. Nine
companies delivered CNG supplies to customers in municipalities that have no connection to the
transmission network. An important prerequisite for increasing the number of natural gas non-
household and household customers in the country is the construction of gas pipelines connecting the
gas distribution networks (GDN) of the licensed areas with the gas transmission network.

The necessary infrastructure for natural gas distribution in the country is under construction
and the number of connected to the GDN household customers is low. The regulatory mechanism
implemented by EWRC provides for incentives for the gas distribution enterprises to continue the
development of GDN and the connection of new customers with the aim of gradually increasing
their number, as well as natural gas consumption.

The constructed by gas distribution companies network in 2022 was 128 086 m, and the total
length of the gas distribution network within the country was 5 587 371 m. The investments made by
the distribution companies in 2022 were 32 392 000 BGN.

The total number of clients of the gas distribution companies as of 31 Dec 2022 was 152 383,
of which non-household 8 253 (5.4%) and 144 130 household customers (94.6%). The number of
customers has increased with 4.2% over one year - from 146 243 in 2021 to 152 383 in 2022, which
is an increase of 4.2%. The household customers have increased by 4.4%, and the non-household –
by 1.2%.

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National Report 2022 Energy and Water Regulatory Commission, Bulgaria
 Breakdown of natural gas consumers by companies is presented in the graph below:

Overgas Mrezhi AD serves the largest number of customers – 89 793, which is 59% of all
natural gas customers in the country, followed by Aresgas AD with 18%, Citygas Bulgaria EAD
with 7%, Sevlievogas 2000 AD with 4%, Balkangas 2000 AD with 4%. Total consumption by
distribution companies’ customers in 2022 was 4 877 195 MWh, a decrease of 13% compared to
2021, when consumption was 5 605 628 MWh. The share of non-household customers was 76% or 3
708 562 MWh and the share of household customers was 24% or 1 168 633 MWh.
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National Report 2022 Energy and Water Regulatory Commission, Bulgaria
 Overgas Mrezhi AD, Citygas Bulgaria EAD and Aresgas AD customers had the highest
consumption:

Gas consumption of the other companies’ customers is presented in the graph below:

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National Report 2022 Energy and Water Regulatory Commission, Bulgaria
 In 2022 four non-household customers connected to the gas distribution network changed
supplier, while household customers did not report a supplier change.

4.2.3. Monitoring the level of prices, the level of transparency, the level and
effectiveness of market opening and competition

In exercising its regulatory powers with regard to price levels, EWRC is guided by the main
principles of developing competitive and well-functioning regional markets within the European
Union and preventing the restriction or distortion of competition in the energy market.

Gas price regulation is carried out in accordance with EA and Ordinance № 2 of 19 March
2013 on Natural Gas Price Regulation (ONGPR). According to EA, the prices at which end suppliers
sell natural gas to customers connected to the relevant gas distribution networks, connection prices
and prices for access and transmission through the transmission networks shall be subject to
regulation by EWRC. The Regulator shall approve prices, at which the public provider sells natural
gas to end suppliers and to entities holding a license for production and transmission of heat energy.

ONGPR sets out natural gas price regulation methods, rules for price formation or
determination and amendment, procedure for providing information, submission of price proposals
and their approval; methods for energy enterprises compensation of costs incurred by imposed
public service obligations under EA; terms and conditions on networks connection price formation;
terms and conditions on natural gas access and transmission through transmission and/or distribution
networks price formation. Prices subject to regulation are formed by the energy companies in
accordance with EA and ONGPR. The Regulator's guidance on price regulation is binding for
energy companies. EWRC approves prices for transmission through the gas distribution networks,
prices for natural sale from end suppliers and prices for connection to the gas distribution networks
based on analysis of the data presented in the applications and based on reasoned justification by
applicants that the proposed prices will enable the companies to realize the investment and
production programme parameters in their business plans.
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National Report 2022 Energy and Water Regulatory Commission, Bulgaria
 Prices of natural gas distribution and natural gas supply by end supplier are regulated under
the price cap method under Art.3 of ONGPR. EWRC approves tariff structures by customers’
groups, reflecting the allocated annual revenue requirements for the service for each consumer
group, based on submitted cost service study. The existing tariff structures and prices for end
customers of the gas distribution companies are differentiated depending on consumption type
(household and non-household), consumption evenness and unevenness and the relevant
consumption.

Gas market liberalization is an important part of European energy policy and is linked to the
strategic objectives of improving security of supply and natural gas supply sources diversification, as
well as building an interconnected and single pan-European gas market.

One of the main EWRC guiding principles is to prevent restriction/distortion of competition

in the energy market, as well as to ensure a balance between the interests of energy companies and
consumers. The Regulator monitors the existence of restrictive contractual practices and exclusivity
provisions which may prevent non-household customers from concluding contracts with more than
one supplier at a time or restrict their choice of suppliers. In exercising its powers, EWRC shall
analyse the performance of regulated energy companies, in order to prevent abuse of monopoly
position or restriction/distortion of competition in the energy market in Bulgaria. EWRC may refer
to the Commission for Protection of Competition (CPC), which in turn shall review the submitted
information and after assessing the data on a case-by-case basis may initiate proceedings under the
Law on Protection of Competition. When, in exercising its powers, EWRC finds that a licensee
distorts or restricts competition, it shall refer the matter to CPC. EWRC shall assist CPC by
providing any necessary information and documents that may be used by CPC with regards to the
case. In case CPC finds by a decision that the licensee distorts or restricts competition, EWRC may
impose coercive measures provided for in EA, and in case of a systematic violation of competition
rules established by CPC, EWRC may revoke the license.

EWRC continuously monitors the market in order to ensure non-discrimination between all
market participants, as well as between participants of one and the same category and to promote
efficient competition and proper market operation. EWRC is in close cooperation with the
Commission for Consumer Protection (CCP), as well as with other non-governmental consumer
protection organizations.

EWRC monitors the level and efficiency of market opening and competition and is guided by
the following basic principles: development of competitive and well-functioning regional markets
within the European Union; preventing the restriction or distortion of competition on the energy
market; creating incentives for the development of the competitive market for energy activities,
where conditions permit so; creating incentives for effective development of secure, reliable and
efficient networks in accordance with the customers interests. EWRC monitors gas networks
development for the benefit of all participants, which will ensure sufficient and available capacity
for everyone and monitors market competition and its effective functioning.

Implementation of Regulation (EU) No 1227/2011

In conditions of increasing competition on the gas market and growth in the natural gas
exchange trading volumes, EWRC monitors the market in order to prevent opportunities for market
manipulations and in implementation of Regulation (EU) No. 1227/2011.

No signals were received from Balkan Gas Hub EAD and Bulgarian Energy Trading
Platform AD (BETP AD) in 2022 for possible violations of Art.3 and/or Art.5 of Regulation (EU)
No. 1227/2011. In 2022 EWRC started one official proceeding regarding a violation of Art.3 and/or
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Art.5 of Regulation (EU) No. 1227/2011. In fulfilment of the requirements of Art.74n of EA, art.
155u, para.2 of Ordinance No.3 of 21.03.2013, the REMIT Division carried out preventive, ongoing
and follow-up control for the implementation of Art.4, 8, 9 and 15 of REMIT.
EWRC carried out ongoing monitoring of compliance with obligations under REMIT Art.15
of the following persons professionally arranging transactions (PPATs) in wholesale energy
products:
 Balkan Gas Hub EAD
 Bulgarian Energy Trading Platform AD (BETP AD)
Finding protocols with relevant prescriptions have been drawn up, including measures to
ensure operational independence in preparing suspicious transaction reports and REMIT Division
access to trade data on the relevant organized exchange market. In addition, questionnaires were sent
to Balkan Gas Hub EAD and Bulgarian Energy Trading Platform AD regarding required monitoring
mechanisms and procedures in the natural gas wholesale market.

A meeting was held with Bulgartransgaz EAD in order to clarify whether it met the criteria
for a person professionally arranging transactions with wholesale energy products (PPAT).

In 2022 EWRC REMIT Division carried out a total of 13 registrations and 2 data updates of
already registered gas market participants in the Centralized European Register of Market
Participants – CEREMP.

4.2.4. Consumer protection and dispute settlement

EA transposes the requirements of Directive 2009/73/EC aiming to ensure effective and

adequate consumers rights and interests protection, strengthen and guarantee their rights and ensure
greater transparency of market relations. The requirements of Annex 1 to Directive 2009/73/EC are
enforced regarding the energy services contracts content that should be disclosed to consumers prior
to the conclusion or confirmation of the contract.

In exercising its regulatory powers, EWRC is guided by general principles defined in EA,
including ensuring a balance between the interests of energy companies and customers, equality
between different categories of energy companies and between consumer types and establishing end
customers’ protection measures. To protect energy customers’ rights EWRC closely cooperates with
the Commission for Consumer Protection, the Ombudsman of the Republic of Bulgaria, as well as a
number of consumer protection NGOs.

As a specialized state authority EWRC regulates the activities in the energy sector, approves
the General conditions of contracts provided for in EA and the Rules on work with energy services
consumers developed by energy companies that provide services of public interest. These contracts
have mandatory content defined in EA, guaranteeing consumers’ rights protection. The contracts
shall state: term of the contract; temporary suspension conditions, termination of service provision
and of the contract; rights of energy services consumers, including information concerning the
procedure of considering complaints and making decision on them, conditions for unilateral
termination of the contract by the user of energy services including upon a change of the contractual
conditions and prices, incl. the possibility for such termination without additional payment. They
provide for conditions and procedures of setting-off and reimbursement of sums in case of failure to
comply with the requirements for quality of the contracted services. Licensees providing services of
public interest are obliged to guarantee consumers’ rights protection and equality between customer
groups in the contracts’ General conditions and Rules on work with energy services consumers.
EWRC shall ensure that the approved General conditions include the content of invoices or bills
which reflect the actual consumption and contain specific data on the metering device number,
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natural gas consumption, value added tax (VAT) and a price breakdown by components, if
approved.

Energy companies shall provide to their customers information about: payment methods;
prices of supply suspension or resumption; prices of maintenance services and prices of other
services related to the licensed activity; procedure of switching supplier and information that energy
services users do not owe additional payments when switching supplier, including a final equalizing
bill at each supplier switching; a procedure of handling complaints and ruling on the actual
quantities consumed, as well as the service provided value in accordance with the agreed metering
frequency at no additional cost. The information shall be presented in the invoices or together with
them in informational materials and on the websites of the energy companies. In accordance with
that procedure, the energy and natural gas suppliers shall provide also to energy services users a
checklist adopted by the European Commission, containing practical information about their rights.

Energy companies shall provide customers with detailed information on daily, week, month
and annual consumption where smart metering systems are used, by providing the final customers
(via the Internet or via the metering device interface) with data for a period covering not less than 24
previous months or since the entry into effect of the supply contract, if that is more recent. Natural
gas suppliers shall provide customers with a wide range of payment methods, including advance
payment systems that are fair and adequately reflect the expected consumption. Energy companies
shall notify the domestic energy services customers of each proposed change to the contractual
conditions and prices of the services provided, as well as of the customers’ right to terminate the
contract unilaterally within 30 days as of the notification date, if they do not accept the new
conditions and/or prices. The end supplier shall inform the customer, together with the invoice, on
the last month of each 6-month period, when the reported natural gas consumption of the end
customer for that 6-month period is higher by more than 50 percent than the reported consumption
for the respective 6-month period of the previous calendar year.

Energy companies performing natural gas supply shall establish information centres where
they will both provide users with information on energy services and customers’ relations.

Energy companies providing services of public interest shall determine in the General
conditions for supply and networks use and in the Rules on work with users, special procedures of
providing vulnerable customers with information related to consumption and suspension of supply.

Complaints handling terms and conditions are regulated by EA and Ordinance № 3 on

licensing the activities in the energy sector. EWRC shall consider complaints of: networks and
facilities users against transmission and distribution network operators, extraction companies, natural
gas storage facilities operators and LNG operators related to the way these entities perform their
duties under EA; customers against energy and natural gas suppliers, including end suppliers,
regarding their duties under ЕA as well as licensees against other licensees regarding their duties’
performance under EA.

EWRC may assist an amicable dispute settlement on a complaint. In case no amicable

settlement is achieved or the parties reject amicable settlement, the Regulator shall decide on the
complaint within two months after receiving it.

Periodically EWRC checks the licensees’ obligations fulfilment regarding the creation of a
specialized unit for work with consumers within the company's structure, in which a sufficient
number and qualified personnel must be appointed; the maintaining of a sufficient number of
customer service centres to cover the needs of the license territory; provision of services to
customers in accordance with the quality indicators of natural gas supply adopted by EWRC;
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maintenance of a quality management system for the licensing activity, certified by an independent
competent organization; maintaining a system for receiving and processing complaints.

Complaints filed at EWRC

The total of 33 complaints in the gas sector was filed at EWRC in 2022. Of these, 32 were
from customers against licensees and 1 from licensee against licensee. In addition, 7 complaints
were not within EWRC competence and they were forwarded to other authorities.

The graph below presents information on complaints filed by years.

Out of 152 383 natural gas customers complaints were filed by 0.03% of those customers.

The main reason for the insignificant complaints number is the small number of gas supplied
sites in the country, both household and non-household, which determines the low number of
complaints filed both to the Regulatory Authority and to companies. On the other hand, the tendency
to maintain a low level of complaints in the sector is due to the fact that energy companies inform
the customers of their rights and obligations according to the contracts general terms and the users’
procedures rules, including the manner of complaints filing and handling. Energy companies
promptly examine the complaints and satisfy the reasonable ones.

EWRC shall periodically verify and control the fulfilment of licensees’ obligations related to
the establishment of a specialized unit for work with customers in the company structure, in which
sufficient and qualified personnel must be appointed; maintaining a sufficient number of centres for
work with customers to cover the needs of the licensed area; provision of services to customers in
accordance with the quality indicators of natural gas supply adopted by EWRC; maintenance of a
quality management system for the licensed activity, certified by an independent competent
organization; maintaining a system for receiving and handling complaints.

The number of clients’ complaints filed to the gas distribution companies in 2021 is 106. The
customers filing these complaints represent 0.07% of all 146 243 gas distribution companies’ clients
in 2021. Most complaints were filed with Overgas Mrezhi AD for the licensed territory of Sofia
Municipality and Bozhurishte Municipality – 40, which represents 38% of all complaints in the
sector.

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 Complaints received at the Regulator were distributed by subject of complaint as follows:

- connection to GDN - 8;
- disagreement with amounts charged for natural gas consumption - 7;
- inaccurate metering of natural gas consumption - 2;
- disagreement with specific clauses of natural gas supply contracts – 2;
- price (disagreement with the high price of natural gas and request to change prices of
natural gas distribution and supply) – 2;
- unfair trade practices (non-receipt of invoice) - 1;
- interruption of gas supply due to lack or delay in payment - 1;
- disagreement with the procedure of replacing a commercial metering device - 1;
- complaints with more than one request – 9.

A case file was created for each of the complaints and they were examined in accordance
with Chapter Nine “Complaints handling and dispute settlement” of OLAES. In 2022 EWRC issued
decisions on thirty-four complaints, of which five received in 2021.

The Regulator accepted two of the complaints as well-founded, giving mandatory

instructions to the licensees and setting deadlines for their implementation. Under the first well-
founded complaint, the mandatory instructions were not fulfilled by the company due to an appeal
against EWRC's decision, and under the second well-founded complaint EWRC ruled its decision in
2023 and the company fulfilled the given mandatory instructions in time.

EWRC took decisions by which it closed the files on thirty-two complaints, as follows:
- eight of the complaints EWRC accepted as unfounded;
- in eight complaints the proceedings were terminated due to lost legal interest;
- sixteen were inadmissible and have not been examined in essence, being terminated on the
basis of Art.4, para.3 of OLAES due to non-removal of irregularities within the statutory
period.
EWRC did not issue decisions within the calendar year 2022 on four complaints due to the
factual and legal complexity of the cases, and it is expected for the Regulator to issue decisions on
these in 2023.

Complaints received in the gas distribution companies

The number of customer complaints in 2022 submitted to the gas distribution companies was
69. Customers filing the complaints were 0.05% of all 152 383 DSO customers in 2022. The largest
number of 29 complaints was submitted at Overgas Networks AD for the licensed territory of Sofia
and Bozhurishte municipalities, where 27% of all customers of the gas distribution companies are
located. This represents 42% of all complaints in the sector.

Complaints in the gas distribution companies were differentiated as follows:

- 28 complaints related to inaccurate measurement of the consumed natural gas amount, of
which 19 were satisfied and 9 were groundless;
- 11 complaints related to connection to the gas distribution network, of which 5 complaints
were well-founded and satisfied, and 6 were considered groundless;
- 5 complaints related to price, of which one was justified. The complaint was about paying
twice the connection price even though there were arguments that the customer had
changed his option for a connection point - the complaint is upheld by EWRC decision;
- 3 complaints related to the content of issued invoices – groundless;
- 2 complaints related to unfair commercial practices (invoice non-receipt, failure to notify
about a bill), of which 1 was justified and satisfied and 1 was groundless;
- 1 complaint related to compensation – groundless. The complaint was about a request for a
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 penalty for delay due to non-connecting of the complainant, as the delay was due to a
municipality moratorium on digging;
- 1 complaint related to customer service – groundless;
- 15 other complaints, of which 7 were well-founded and accordingly satisfied, and 8 were
considered groundless.
Companies use different sources to raise customer awareness about the services provided and
the possibilities to receive information about disputes settlement, clarification of the customers’
rights on filing complaints, and the possibility to address EWRC in case they are not satisfied with
the received answer. They inform their clients via company’s webpage, telephone, e-mail.

Household customers indicators 2019 2020 2021 2022

Number of household natural gas customers 112 210 124 652 138 087 144 130
Number of natural gas household customers,
having been connected to the gas
0 0 0 0
distribution network of the company and
which have switched natural gas supplier
Number of disconnections of final
2 104 1 741 2493 2981
household consumers due to non-payment
Number of working days between
notification to pay a bill and disconnection 18 18 18 18
in cases of non-payment in practice
Number of household vulnerable customers
according to paragraph 1, item 66c of EA 6 8 12 12
Supplementary Provisions
Number of household customers with smart
3281 5589 14 316 45 409
meters

There has been a significant increase in installed smart meters of household customers, which
increased from 3 281 in 2019 to 45 409 in 2022.

The average percentage of household customers who have been disconnected due to non-
payment in the period 2019 – 2022 is relatively constant and amounts to about 2%.

Although all gas distribution companies provide their customers with information on the
switching procedure and that energy service users do not owe any additional payments when
changing supplier, there has been no change of supplier by household customers yet. They remain
customers of the end suppliers.

4.3. Security of supply (if and insofar NRA is competent authority)

The Ministry of Energy is the state body that conducts the energy policy in the country. The
Minister of Energy is the competent authority concerning security of supply in the meaning of Art.3,
paragraph 2 of Regulation (EU) 2017/1938 of the European Parliament and of the Council of 25
October 2017 concerning measures to safeguard the security of gas supply and repealing Regulation
(EU) № 994/2010 (Regulation (EU) № 2017/1938). Pursuant to Art.8, para.2, letters (a) and (b) of
Regulation (EU) 2017/1938 the competent authority of each Member State, shall, after consulting
the natural gas undertakings, the relevant organizations representing the interests of household and
industrial gas customers, including electricity producers, electricity transmission system operators,
and, where it is not the competent authority, the national regulatory authority, establish: a preventive
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action plan containing the measures needed to remove or mitigate the risks identified, including the
effects of energy efficiency and demand-side measures in the common and nationals risk
assessments and in accordance with Article 9; an emergency plan containing the measures to be
taken to remove or mitigate the impact of a disruption of gas supply in accordance with Article 10.
In compliance to Regulation requirement, an inter-institutional group has been established,
appointed by the Minister of Energy, which shall draft the above-mentioned documents.
Representatives of EWRC have been included and they have participated in the documents drafting
process.

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