Deregulation round-up


The Bulgarian energy market could open up this year, with the completion of the privatisation of the electricity distribution companies in the country. This privatisation began in 2003, and thus far has proved financially rewarding.

The state-owned Electricity of Vietnam (EVN) plans to introduce new pricing methods to stimulate competition in the electricity supply industry. EVN plans to replace the current purchase mechanism, which is based on a price agreed between it and power supply and production companies, with a request for bids on the price of electricity. The company will evaluate the bids, based on national power demand and supply, before contracting with power generators. This is regarded as the first step towards a competitive market; EVN and government departments are busy developing a plan which will be submitted to the government for approval.

The energy sector in Belarus is likely to be reformed in the near future. Government officials have developed four scenarios for restructuring the industry, based on the main objective of separating power generation from other operations. The first phase of the restructuring should see the separation of generation from transmission and the establishment of a company that will operate the high voltage grid and manage the distribution and sales sector. Administrative functions will be transferred from the state generation and distribution monopoly to the Ministry of Energy. Details of the plan should be released in the first half of 2004.

The state of Virginia in the US has embarked on an energy choice pilot programme, and thus far more than 70,000 residential and over 8,000 business customers of utility Dominion Virginia Power have signed up to be part of a buying group selected to receive an offer from an alternative supplier. The chosen volunteers will be placed in a buying group with other customers in their geographic area, and the State Corporation Commission will oversee a competitive bid process to select the lowest cost supplier to provide electricity to each group. The pilot project will run until mid 2007, but customers can return to Dominion for supply at their current at any time. Regardless of which company supplies the power, Dominion will deliver it, as well as maintaining wires, poles and other equipment.

Mattias Kurth has been appointed regulator for the German energy markets and will begin his task by focusing on access fees for the country’s electricity grids, which customers say are too high. Kurth heads the supervisory authority for telecommunications, RegTP, which will supervise German energy markets from July 1 this year. The appointment of an energy regulator is a direct result of European Union requirements for stricter monitoring of the industry in all member countries.