December 21, 2017 / 6:55 PM / 3 months ago

UPDATE 3-Bulgaria fines EVN, CEZ for competition breach

* Competition watchdog says EVN, CEZ breached competition rules

* Companies deny wrongdoing, plan to appeal

* Energy regulator slaps another $3.6 mln fine on EVN (Adds another combined fine of 6 mln levs imposed on EVN)

SOFIA, Dec 21 (Reuters) - Bulgaria’s competition watchdog fined Austria’s EVN and Czech CEZ a total of 5.99 million levs ($3.63 million) on Thursday for breaching competition rules.

The Commission for Protection of Competition imposed a combined fine of 3.79 million levs on two Bulgarian power distribution and supply units of EVN. It also levied a combined fine of 2.19 million levs on two units of CEZ.

The watchdog, which opened its investigation in July, said the companies breached the rules by discriminating against independent traders and restricting electricity trading at freely negotiated prices.

Both CEZ and EVN denied any wrongdoing and said they would appeal the fines.

“We will definitely appeal. We do not agree with the sanctions imposed,” spokeswoman for CEZ Bulgaria said.

EVN’s regional manager for Bulgaria Robert Dick said the fines were ungrounded and warned that the ruling sent a negative signal to foreign investors.

“We find those fines unfair and unjustified,” Dick told a news conference. “These penalties are a bad signal about the foreign investors in Bulgaria,” he said.

In a separate ruling a few hours later Bulgaria’s Commission for Energy and Water Regulation imposed another combined fine of 6 million levs on EVN after clients complained that their electric metres had been changed without notification.

In response, EVN said the energy regulator’s sanction was “obvious excess”.

“The disproportion of the sanction leads to conclusions about abuse of power and pressure of state institutions against one of the biggest investors in Bulgaria,” Kalina Trifonova, deputy chairman of EVN Bulgaria’s managing board, said.

The regulator said it would give more details on the its rulings against EVN on Friday.

Electricity bills are politically sensitive in Bulgaria and protests against high prices toppled a previous government in 2013.

The competition watchdog argued that both EVN and CEZ had applied a common strategy and practices to discriminate against traders that did not belong to their energy groups.

The watchdog has also investigated a third power distributor in the Balkan country, Czech Energo-Pro, and said it would publish its findings on Friday.

The competition watchdog had fined the three foreign power distributors in 2015 for charging unreasonably high prices for the use of the low-voltage grid, restricting competition and acting against the interests of consumers.

EVN, CEZ and Energo-Pro have all opened international arbitration proceedings against Bulgaria, seeking hundreds of millions of euros from the country after a series of regulatory decisions linked with the pricing of electricity.

$1 = 1.6484 leva Reporting by Tsvetelia Tsolova and Angel Krasimirov; editing by Mark Heinrich, David Evans and Jane Merriman

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