Bulgaria mulls cutting fees to boost power exports

Mon Apr 8, 2013 2:02pm BST

* Fees on exports may be cut by 3 euros from July 1

* Traders say move unlikely to spur power exports

SOFIA, April 8 (Reuters) - Bulgaria's energy regulator said it was looking at reducing electricity transmission fees to boost the competitiveness of its power exports, which have fallen due to lower domestic and regional demand.

Bulgaria charges 17.5 euros ($22.79) per megawatt hour in fees to transmit exports through its grid.

The high fees coupled with decreased demand both in the country and from its Balkan neighbours in recent weeks have forced Bulgaria to switch off some power plants to balance its system.

The energy regulator suggested on Monday that it may cut the fee for exporters by about 3 euros per MWh from July 1 by revoking an element designed to compensate for preferential tariffs it pays to co-generation plants.

"The so-called brown surcharge on electricity export prices could be revoked as of July 1," said Evgenia Haritonova, the regulator's chairwoman. "A reasonable decrease is about 6 levs ($4.00)."

Electricity traders, who have demanded the fees be completely removed, said the cut under consideration would probably not be enough to spur exports and that the remaining parts of the fee would continue to weigh on Bulgaria's power producers.

Many traders say they are finding cheaper energy in Hungary, Serbia or Romania, which they are selling to Bulgaria's chief customers Greece and Turkey, while Sofia has been forced to disconnect production units.

"This cut will not be enough and will not help the exports. We have always said these fees are a huge problem for free trade and price-setting in the Balkans. Now they are hitting producers," said Plamen Popov, a power trader with Statkraft.

Shrinking industrial activity and low household use have reduced consumption by more than 50 percent in recent weeks, while exports have been just a tenth of what they were at the same time last year, according to energy ministry data. ($1 = 1.5018 Bulgarian levs) ($1 = 0.7679 euros) (Reporting by Angel Krasimirov and Tsvetelia Tsolov; editing by Jane Baird)