The National Energy Chamber expresses its serious concern about the “Law on the provision of financial support to household end-customers of electricity” adopted yesterday, and more precisely in relation to the proposed text of Article 4, under which the operators of electricity distribution networks are obliged to reimburse the state for the state aid paid. We believe that these texts are unconstitutional and create a dangerous precedent that threatens a number of fundamental legal principles – protection of private property, protection against double jeopardy, legal certainty, transparency, freedom of establishment.

This legislation transfers state responsibilities and direct financial burden to private companies. If the state can transfer its social costs to private companies in the energy sector, what would stop similar actions in other industries? This creates uncertainty for all employers, from industry to commerce and services. It sends a very negative signal about the market environment in the country, undermining investor confidence.

How did we come to that?

On December 30, the interim Prime Minister Dimitar Glavchev announced that the government will allocate 2.2 million BGN to support households who suffered power cuts due to severe winter conditions on top of the compensations that the Distribution System Operators (DSOs) are already paying under their General Terms and Conditions. Additionally, the Regulatory authority announced that after conducting checks it will also impose administrative penalties on the DSOs.

After much public discussion it became clear that there was no existing legal basis for the government to provide this compensation directly and it was decided that a special piece of legislation was needed. to establish a legal framework for the aid. On February 12, 2025, the Energy Commission of the National Assembly approved this bill that was intended to provide the needed legal basis for granting the financial support to the affected households. However, in second reading without any time for consultation, the Commission adopted amendments that fundamentally alter the purpose of the bill, obliging the DSOs to:

3. reimburse the government (via the Fund Security of the Energy System) for the disbursed financial aid within one month;
4. to write off these costs from the recognized by the NRA costs, meaning DSOs will bear them as direct financial losses;
5. in case they do not comply with the above, to pay a fine of 700 000 BGN each.

In practice, this is a mechanism for transferring state obligations to the private sector, which contradicts the Constitution of the Republic of Bulgaria and EU law. These texts of the Law are completely unacceptable, create an unstable regulatory environment allowing the state to impose arbitrary financial decisions on private companies, which is an unprecedented overstepping of its powers.

We would like to remind that investors, both domestic and foreign, rely on a stable regulatory environment to plan their long-term investments. Introducing obligations retroactively and without a clear legal basis undermines confidence in the legal system and makes Bulgaria less attractive for future investment. The forced transfer of public costs to private companies sends a worrying signal to all economic operators – that Bulgaria lacks predictability and protection against arbitrary regulatory interventions.

We call on the responsible institutions – the National Assembly, the Energy Committee and the Ministry of Energy to take urgent action to repeal the controversial texts and restore confidence in the legal framework of the Bulgarian business environment.