The European Commission is inviting comments from interested parties on commitments offered by the State-owned Bulgarian Energy Holding EAD (BEH) to address competition concerns about BEH's behaviour on the non-regulated wholesale electricity market in Bulgaria.
The Commission has expressed concerns that BEH, the incumbent vertically-integrated energy company, has been preventing competition on the non-regulated wholesale electricity market in Bulgaria. In particular, BEH may be hindering the resale of electricity by imposing territorial restrictions on traders, in breach of EU antitrust rules.
To address the Commission's concerns, BEH has offered to set up an independent power exchange in Bulgaria and to ensure the liquidity of the day-ahead market on that exchange. If the market test confirms that the commitments are suitable to address the Commission's competition concerns, the Commission may make the commitments legally binding on BEH.
To alleviate the Commission's concerns, BEH has offered to:
- set up a power exchange in Bulgaria, with the assistance of an independent third party with expertise in the operation of power exchanges;
- offer predetermined volumes of electricity on the day-ahead market on the new exchange for a period of five years;
- ensure the independence of the power exchange by transferring its control to the Bulgarian Ministry of Finance.
The commitments aim at:
- ensuring that the predetermined volumes of electricity are sold on an anonymous basis;
- creating liquidity on the exchange;
- improving transparency on the unregulated wholesale electricity market in Bulgaria; and
- promoting the integration of the Bulgarian wholesale electricity market with those of neighbouring markets.
A summary of the proposed commitments has been published in the EU's Official Journal. Interested parties can submit comments within one month from the date of publication. The full text of the commitments is available at the case website.
The Commission opened antitrust proceedings into BEH's behaviour on the wholesale electricity markets in Bulgaria in December 2012.
In August 2014 the Commission issued a Statement of Objections, where it set out its competition concerns that BEH may have prevented traders from freely deciding where to sell electricity purchased from BEH, in particular by including territorial restrictions in its production subsidiaries' electricity supply contracts. Such behaviour, if established, would breach Article 102 of the Treaty on the Functioning of the European Union (TFEU), which prohibits the abuse of a dominant market position.
If the market test indicates that the commitments are a satisfactory way of addressing the Commission's competition concerns, the Commission may adopt a decision making the commitments legally binding on BEH (under Article 9 of the EU's antitrust Regulation 1/2003). Such a decision would not conclude that there is an infringement of the EU antitrust rules but legally binds BEH to respect the commitments it has offered.
If a company breaks such commitments, the Commission can impose a fine of up to 10% of the company's worldwide turnover, without having to find an infringement of the EU antitrust rules.
More information, including the full non-confidential version of the commitments, is available on the Commission's competition website, in the public case register under the case number 39767.