RECOMMENDATIONS TO SMALL AND MEDIUM ENTERPRISES FOR TIMELY TRANSITION TO THE FREE MARKET OF EL. ENERGY
On June 26, 2020, the Law for amendment and supplement of the Energy Act – issue 57 of the State Gazette was promulgated. As a result of the changes made on October 1, 2020, non-household customers connected to the electricity distribution network – low voltage, must enter the free market. This is another step towards the full liberalization of the electricity market. The aim is to ensure competition between electricity suppliers under better conditions for users, tailored to their specific consumption profiles.
How to proceed?
You should already have received a notification for termination of electricity supply from October 1, 2020 at sites connected to the low voltage electricity distribution network by the final electricity suppliers used so far – CEZ Electro Bulgaria AD, EVN Bulgaria Power Suply” EAD,“ Energo-Pro Sales ”AD or“ ESP Golden Sands ”Ltd. – according to your region. Attention: this does not mean that you will not have electricity supply after October 1, but is simply a notification that the mentioned companies will now have the status of a standard electricity trader and can be changed at your choice!
If for some reason you are not sure about your status, you can check on the website of your current electricity supplier whether you are present in the list of non-residential customers of sites connected to the low voltage electricity distribution network in the relevant license area.
You have the opportunity until September 30, 2020 to conclude a contract with an electricity trader of your choice, providing the best conditions for you. It is important to know that the chosen electricity supplier must also be a balancing group coordinator in accordance with the Electricity Trading Rules.
Information about all electricity suppliers, in connection with the licenses issued to them by the EWRC, with names, contact numbers, e-mail addresses and other contact information is available on the EWRC website.
For initial registration on the electricity market at freely negotiated prices with the supply contract, you authorize the supplier to submit an application for initial registration with the respective network operator, as well as to conclude contracts with the network operator and the last supplier on your behalf and at your expense from last instance.
Selection and change of electricity supplier on the free market can be done every month. Switching from a free market provider is a free service.
The procedure begins with selection and signing a commercial contract with the supplier selected by the customer, after which the supplier announces the change to the network operator. (If the application is by the 10th of the month, the change will be a fact from the 1st of the next calendar month. If the application is submitted after the 10th – the change will be a fact from the 1st of the following month).
In case that by September 30, 2020, inclusive, you have not signed a contract with a electricity supplier at freely negotiated prices, the supply of electricity from October 1, 2020 will continue to be performed by your current supplier in his capacity as a holder of an electricity trading license.
In order to supply electricity in the above case, your current supplier, but at his capacity as a trader, will sign a standard contract with you. Until the conclusion of the standard contract, the company, as a current supplier in its capacity as a final supplier, ensures the supply of electricity, provided that you timely pay all amounts due in connection with the supply.
The standard contract is valid from October 1, 2020 to June 30, 2021 and is concluded according to a model approved by the EWRC, which regulates the rights and obligations of the parties, the conditions for supply of electricity from the current supplier.
If in spite of everything, for 11 months, ie. until July 1, 2021 you don’t chose a supplier of electricity at freely negotiated prices, you will have to procure from your existing supplier, but in his capacity as a supplier of last resort. This is expensive and nonsensical, because in transactions with a supplier of last resort, the price of electricity is significantly higher! This is due to the fact that the function of the supplier of last resort is to supply electricity incidentally, until the choice of another supplier. The change of a supplier of last resort with another supplier shall be carried out in accordance with the procedure provided for in the Energy Act and the Rules for Electricity Trade. You have almost an year to avoid such an extreme measure.
How the price of electricity is formed
The main part is the price of the active energy – when they tell you about the stock market price, market price, producer price – they mean the price of the active energy. Practice shows that the lowest price is in case you consume the same amount of electricity throughout the whole day, as well as for the entire delivery period (for example, one year). This is called band (even) consumption. Most often, consumers have uneven consumption – both within a day and throughout the year. Logically, this uneven consumption implies a slightly higher average price of active energy.
Just because your consumption is uneven doesn’t mean it’s not well planned. When you plan your work, you also plan your electricity consumption. This becomes your obligation to ESO when registering your 24-hour user schedule. This is usually handled by your electricity supplier. Of course, current deviations and differences between forecast and consumption are very likely – this is where the balancing service comes in: when the deviation leads to a shortage of electricity – you will be charged extra and vice versa – in case of excess (eg unexpectedly decide to turn off the machine, electrical appliance, etc.) you will be charged for the amount of electricity. Balancing energy is significantly more expensive than normal active energy – when you don’t have enough (turn on an unplanned machine, appliance, etc.), and when you have excess – it will be “bought” from you at a significantly lower price. Conclusion: any poorly planned consumption, deviating from the forecast, requires balancing, and this will cost you additional costs.
It is possible that some retailers will only offer you a price for active energy and the balancing costs will not be specified – this is not in your interest unless you plan and manage your consumption effectively. In the general and most common case, we recommend that you specify with your chosen retailer how the balancing will take place, asking him to engage with it.
Remember that to the formed amount – the price of active energy and the price of balancing, you have to pay more to the final price: the price for obligations to society (until June 30, 2021 this component is 0.02147 BGN / kWh, network fees for access and transmission through the electricity transmission system – a total of BGN 0.01075 / kWh, as well as the following network price components:
if you are in the network of CEZ Distribution Bulgaria – price for transmission through a low voltage network 0.03355 BGN / kWh, as well as access price 0.01989 BGN/kW/ day (attention, calculated according to the requested connected power, and not according to your consumption);
– if you are in the network of Elektrorazpredelenie Yug – price for transmission through a low voltage network 0.03574 BGN/kWh, as well as access price 0.01977 BGN/kW/ day (attention, it is calculated according to the requested connected power, not according to your consumption);
– if you are in the network of Elektrorazpredelenie Sever – price for transmission through a low voltage network 0.03531 BGN/kWh, as well as access price 0.02053 BGN/kW/ day (attention, calculated according to the requested connected power, not according to your consumption);
– if you are in the network of Elektrorazpredelenie Golden Sands – price for transmission through a low voltage network 0.04429 BGN / kWh, as well as access price 0.01349 BGN/kWh.
The above prices are without VAT and excise (0.002 BGN / kWh).
When concluding a contract for the supply of electricity at freely negotiated prices, the parties enter into a contract for combined services, the subject of which is the sale of electricity and payment for all services used by the end customer, including network services and balancing.
It should be considered that in the case of electricity supply at freely negotiated prices, the price of liabilities to society is charged on the invoice separately from the price of electricity.
In order to be more fully informed and to provide an opportunity for participation in the electricity market at freely negotiated prices, by December 31, 2020, the EWRC will establish a platform and determine the rules for working with it. The rules will be published on the EWRC website.