Sunday, 20 April 2014

ČEZ says receives no official notification on errors in Bulgaria

18 March 2013

Prague/Sofia, March 17 (CTK) - Power utility CEZ has not received "any official notification of any errors" yet from the Bulgarian Prosecutor's Office, CEZ said Sunday in reaction to reports of agency AFP that Bulgarian Chief Prosecutor has asked for the revocation of the company's licence.

The results of the control should not be known earlier than within the next several days, CEZ said.

A control in CEZ proved "massive regulatory breaches" by CEZ, according to Bulgarian Chief Prosecutor Sotir Tsatsarov.

"We are absolutely convinced that we comply with all Bulgarian laws as well as the laws of the European Union," CEZ spokeswoman Barbora Pulpanova told CTK Sunday.

The Czech Finance Ministry, which executes shareholder rights in CEZ, said it will not comment on the matter.

Prime Minister Petr Necas said he has no information at this moment about the alleged breach of regulations by CEZ.

"But I think it is very important that we were assured on Friday by Bulgarian President (Rosen) Plevneliev that problems linked to CEZ will be resolved in such a way so that the reputation of Bulgaria in Europe is not damaged. And that they will be dealt with in line with the European law," Necas said in reaction to the matter through government spokesman Michal Schuster.

CEZ is the sole electricity distributor in the western part of Bulgaria. It became one of the targets of public anger in the Balkan country in the past weeks because of high electricity prices.

The demonstrations in February toppled the Bulgarian right-wing government whose prime minister Boyko Borisov promised to take away CEZ's licence just a day before his resignation.

The Czech Industry and Trade Ministry said Sunday that Bulgaria's statement is a political one again.

"We again have to appeal to the European Commission and insist that apolitical procedure is maintained in the process to withdraw the licence. The process should be free of pre-election statements and pressures of some Bulgarian political players," Industry and Trade Minister Martin Kuba said.

Bulgarian regulator announced earlier it would decide about the licence of the Czech electricity company on April 16. It launched the licence proceedings on February 19.

"The ongoing check on CEZ activities has revealed massive irregularities in the ways CEZ accounts for power used by customers," Tsatsarov told Bulgarian television.

"As a result, the Supreme Administrative Prosecutor's Office has requested a revocation of the CEZ license," he added.

Tsatsarov also asked the regulator to initiate penalty proceedings against CEZ for each detected regulatory breach.

Bulgarian Prosecutor's Office launched the check of Czech companies CEZ and Energo-Pro, and of Austria's EVN at end-February.

CEZ said then it does not fear the check because there is no reason for a loss of licence, but expressed willingness "to take into account all the regulator's recommendations". The Bulgarian public accused distribution companies of an excessively high hike in electricity price despite the fact that the price is subject to government regulation in the country.

Bulgaria will be governed by a caretaker cabinet until early elections to be held on May 12. The cabinet said on Saturday it will make an international audit of the Bulgarian energy sector which should reveal possibilities of cutting energy prices.

Apart from Bulgaria, CEZ also run into problems in Albania where local authorities took away the power distribution licence from the company. CEZ took steps to launch an arbitration suit against Albania over compensation for damaged investment. The total value of the loss in Albania is estimated to reach Kc5bn.

CEZ bought a majority stake in three distribution companies in Bulgaria in 2005 and later merged them into one. In 2006 it acquired Bulgarian thermal power plant Varna and last year it launched into operation photovoltaic power plant Oresec.

Activities in Bulgaria account for around one-tenth of revenues of the entire CEZ group, according to analysts.

Czech Prime Necas met Bulgarian President Rosen Plevneliev on the sidelines of the Brussels summit on Friday to discuss the problems of Czech distributors in Bulgaria.

Necas said Plevneliev assured him that Bulgaria wants to follow European regulations and practice when dealing with the problems.

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