Aspect: Compliance

SO8 Fines/sanctions as a result of illegal activities

In March 2014, the Bulgarian State Energy and Water Regulatory Commission (SEWRC/the regulatory authority) started administrative proceedings to revoke EVN Bulgaria EC’s licence. This action was justified by reference to EVN Bulgaria EC’s offset of certain receivables due from the national electricity company Natsionalna Elektricheska Kompania EAD (NEK), which the regulatory authority claimed led to the reduction of NEK’s cash reserves and impaired the company’s ability to meet its legal obligations. The administrative proceedings are currently pending. The regulatory authority imposed a fine of BGN 1.0m on EVN Bulgaria EC during the administrative proceedings. EVN Bulgaria EC filed an appeal against this fine with the Plovdiv district court (PDC), which is the court of first instance. On 10 October 2014, the court ruled in favour of the SEWRC and confirmed the fine. EVN Bulgaria EC has filed an appeal against this decision with the administrative court in Plovdiv.

The SEWRC also carried out investigations at EVN Bulgaria EP, which may lead to fines for violations allegedly revealed by a recent regulatory audit. The latest audit began on 6 January 2014 and covered EVN Bulgaria EP’s operations from 1 July 2008 to 30 November 2013. The regulatory authority had, however, already conducted three audits at EVN Bulgaria EP since 2010 (two audits in 2013 alone). No reasons were given for this last audit, and EVN Bulgaria EP is unaware of any specific event or alleged violation that would provide grounds for increased controls.

As a result of the audit, the regulatory authority imposed 50 fines as of 10 October 2014. Each fine equals BGN 20,000 (in total BGN 1.0m). EVN Bulgaria EP has filed appeals against all of these fines with the responsible Bulgarian court, and the related proceedings are currently pending.