Energy and Water Regulatory Commission - EWRC (Bulgaria)

Regulation

Regulatory Model

Energy and Water Regulatory Commission (EWRC) is a national regulatory agency and according to its statutes, exercises regulatory functions over 4 sectors: electricity, central heating, natural gas and WSS (water supply and sanitation) services. Initially the national regulator covered only energy sector (1999 – 2005), later in 2005 the WSS services were added to its competences. The EWRC`s mission is to ensure the quality and availability of public services to consumers, balancing the interests of suppliers and consumers. EWRC`s duties in regard to WSS services sector include approving the business plans of WSS-operators and the WSS services prices; performing off- and on-site inspections over the activity of WSS-operators and out court ruling on consumers complains against WSS-operators.
Bulgaria has mandatory rule regulation model for WSS-operators with 1 national regulatory agency.
The Law on Waters and the Law on Regulation WSS services (LRWSSS) provides the main legal framework for WSS regulation in Bulgaria. The law sets 7 goals: satisfying the consumers water needs giving priority to the drinking – household water supply of the population; ensuring of accessibility, reliability and security of WSS services; increasing the quality and the efficiency of the rendered WSS services; preventing the waste waters flowing out of the sewerage network, as well as discharge of drainage waters in it out of the provided in the technological process; reducing the total water losses of water; balancing the interests of the WSS operators and of the consumers; equality between the different groups of consumers with regard to the quality and the price of the WSS services. EWRC is public administration authority (collective body of 7 members) accountable to the Government. Each year by 31 January, EWRC adopts annual report, which is presented to the Government and published on the Regulators website.

Regulated sectors

Activities encompass the natural gas, electricity including renewable energy, heating, and WSS sector. Companies, operating on the energy sector are subject of license procedure; companies operating on the water sector are subject of approval of business plans.
Energy sectorNatural Gas Sector – Gas distribution is carried out by private regional and local companies, with one public provider of natural gas and one transmission system operator. Licenses, issued by the regulator, are 28 for the activities „natural gas distribution" and "natural gas supply by end supplier". Electrical Power - towards 2014 the sector has two segments - regulated and liberalized market, organized on a different principle: the regulated market consumers buy at regulated prices, a common mix of energy and there is no obligation to balance, until the liberalized market consumers buy at freely negotiated prices, are obliged to announce a timetable for the supply and the market is subject to balancing. The state regulator sets: production quotas for the regulated market; prices on the regulated market (between producers and public supplier NEC; between NEC and end suppliers; for network services in the transmission and distribution systems; fees: green energy, brown energy, stranded costs); and quality indicators. Important role in the market plays the Electricity System Operator, which provides the link between the regulated and liberalized sectors. Its main task is centralized operational management, control and coordination of operation modes of the power system of Bulgaria. 4 electricity distribution companies operate on the country’s territory. Central heating - heating licenses are granted by the regulator of over 20 regional district heating companies. Other licenses are issued for heating in the composition of chemical, metallurgical, food processing, petrochemical and textile industries. Most of them have plants for cogeneration of electricity and heat. Heating companies are mainly in the big cities.
WSS services sector64 operators are active on the WSS market up to January 2015; they cover 100% of the market and have approved business plans and tariffs by the Regulator. There is no licensing for WSS operators in Bulgaria. Currently there are regional companies (with 100% or 51% of state ownership of the capital), small municipal companies, as well as small private operators. Only one large PPP (public–private partnership) is provided in the capital of Sofia.

Main responsibilities

EWRC`s responsibilities are provided by the Law on the Energy Sector (LES) and the Law on the Regulation WSS services (LRWSSS). They are published at: http://www.dker.bg/docsen.php?d=98

Tariff Setting

Price cap tariff regulation has been applied for WSS services. There are no different tariffs for low and high water consumption, but there are different tariffs for households and business in case of sewerage and wastewater treatment services.
As regard to the prices of WSS services: average price for WSS services 0.94 €/m3, where the average price for water delivery is 0.71 €/m3; for sewerage is 0.07 €/m3; and treatment – 0.16 €/m3.
The regulator is involved actively in the process of tariff settings – the WSS-operators filed to it applications for WSS tariffs, which it reviews, may change (if necessary) and approves.

Quality of Service

The Law on Regulation on WSS services gives a frame of 15 key performance indicators (KPI) for quality of service and WSS operator effectiveness. These 15 key PI are further elaborated in 72 sub-indicators, which are part of the business plans of WSS-operators. EWRC receives annual reports on the implementation of the business plans of WSS-operators, including the PI and perform its own analyses. Some of these analyses are published on its website.

The Regulator

Year of establishment: 1999  (energy sector), 2005 (WSS sector)
Characteristics: Multi-sector regulator, Independent National Regulatory Authority; Collective body
Legal basis: LES, LRWSSS, Law on the Energy from Renewable Sources, Law on the Waters
Number of employees: total - 128 positions (7 members of commission + 121 positions for administration); WSS sector: 2 members of commission + 16 employees.
Budget: 2 million Euros (2014).
Contacts: EWRC – State Energy and Water Regulatory Commission, 8-10, Blvd Donukov, Sofia / Bulgaria
Tel: + 359 2 988 2498
Fax: + 359 2 988 8782
Email: dker@dker.bg              Website:   http://www.dker.bg      

Other relevant entities

For the Water sector:

Ministry of Regional Development and Public Works – it is responsible for the implementation of state policy on spatial planning, coordinates the activities of central and local executive authorities, local authorities and local administration; further it is principal of WSS operators/companies with a state participation in the capital. (http://www.mrrb.government.bg/)
Ministry of Environment and Waters – it is responsible for the integrated water management in the public interest - water quantities, permits for water abstraction and  discharge, activity of waste-water treatment plants (sludge disposal)–  (http://www.moew.government.bg/)
Ministry of Health - the protection of public health (http://www.mh.government.bg/)
Bulgarian Water Association – non-government organization (http://www.bwa-bg.com)

For the Energy sector:

Ministry of Energy – is responsible for development of a competitive internal and external integrated market, building a reliable infrastructure, security and diversification of sources and routes of energy resources, improving energy efficiency.

Sector

Sector Description

The WSS (water supply and sanitation) service coverage of the population is 99% for the water supply; 66% for the sewerage and 50% for the wastewater treatment. Volume of activity for 2012: Abstracted water volume – 934 million m3/y (52%  surface and 48% underground water); Filed water, total – 947.92 million m3 /y; Delivered water to end users – 375.44 million m3 /y; Water losses – 572.48 million m3 /y (60%); Sewage water – 570.77 million m3 /y;Wastewater treatment – 475.88 million m3 /y; Average billed consumption – 136 l/p/d; Economic and financial data -  Turnover – 273,708 million Euros (2012); Average WSS service price – 0.94 €/m3 ; Average annual invoice per customer – …Euros, Employment – 16 000 Employees.

Legal and institutional framework

The current legal framework in the water sector consists of: Law on the Waters and Law on the Regulation WSS Services. Provision of water supply and sewerage services in Bulgaria is natural monopoly, subject of regulation by 4 state institutions - the Ministry of Regional Development and Public Works, the Ministry of Environment and Waters, Ministry of Health and the State Energy and Water Regulatory Commission (EWRC/State Regulator). The Council of Ministers has general competence on policy and strategy adoption. Ministry of Regional Development and Public Works Ministry is responsible for the implementation of the state policy and as a principal of WSS operators/companies with a state participation in the capital. Ministry of Environment and Waters is responsible for the integrated water management in the public interest; Ministry of Health is responsible for the protection of public health. EWRC is responsible for approving the business plans of WSS-operators and the WSS services prices; performing off- and on-site inspections over the activity of WSS-operators and out court ruling on consumers complains against WSS-operator.

Market Structure

Currently there are 64 WSS operators, which cover 100% of the market. All of them are subject of regulation and tariff approval by the Regulator.

Ownership and management of services.

The ownership and management of the WSS services is mainly in the public sector – 84% of operators. Presently 64 WSS-operators cover the whole territory of the country – 54 WSS operators are with state, municipal or both ownership. 10 WSS-operators have private ownership – 2 of them partial private ownership /respectively 77,1% and 48% private, the rest is municipal ownership/, other 8 WSS-operators have 100% private ownership.

Country profile

Main indicators of the water sector

Volume of activity for 2012:

*Abstracted water volume – 934 million m3/y  (52%  surface and 48% underground water);
*Filed water, total – 947.92 million m3 /y;
*Delivered water to end users – 375.44 million m3 /y; * Water losses – 572.48 million m3 /y (60%);
*Sewage water – 570.77 million m3 /y;
*Wastewater treatment – 475.88 million m3 /y; *Average consumption – 136 l/p/d;

Economic and financial data:

Turnover – 273,708 million Euros (2012);
Average WSS service price – 0.94 €/m3 ;
Average annual invoice per customer – …Euros, Employment – 16000 Employees.

Evolution

Bulgaria joined the EU beginning of 2007. The national legislation corresponds to the Acquis communautaire.  The country started reform in the WSS sector with amendments of the Law on Waters in 2009. The main characteristics of this reform includes:

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