Chapter One
GENERAL PROVISIONS

Article 1. (Supplemented, SG No. 74/2006, amended, SG No. 49/2007) This Act regulates the social relations associated with the activities of generation, import and export, transmission, transit transmission, distribution of electricity, heat and natural gas, oil and oil product transmission through pipelines, trade in electricity, heat and natural gas, as well as the powers of state bodies in formulating energy policy, regulation and control.
Article 2. (1) The principal purposes of this Act are to create conditions for:
1. high-quality and secure supply of electricity, heat and natural gas to the general public;
2. energy development and the energy security of the country through efficient use of energy and energy resources;
3. creation and development of a competitive and financially stable energy market;
4. energy deliveries at minimum costs;
5. (repealed, SG No. 49/2007);
6. promotion of the combined generation of electricity and heat.
7. (new, SG No. 74/2006) development of electricity, natural gas, oil or oil product transmission infrastructures on the territory of the country, and through it.
(2) (Amended and supplemented, SG No. 74/2006) The generation, import, export, transmission, transit transmission, distribution and trade in electricity, heat, natural gas, oil and oil products shall be carried out under the guaranteed protection of the life and health of citizens, the property, the environment, the interests of consumers, and the national interests.

Chapter Two
ENERGY POLICY
Section I
State Governance of the Energy Sector
Article 3. (1) The Council of Ministers shall define the state policy in the energy sector.
(2) The Council of Ministers shall adopt the Energy Strategy of the Republic of Bulgaria on a motion by the Minister of Economy and Energy that shall state basic objectives, stages, means and methods for the development of the energy sector.
Article 4. (1) (Amended, SG No. 74/2006) The national energy policy shall be implemented by the Minister of Economy and Energy.
(2) (Amended, SG No. 74/2006) The Minister of Economy and Energy shall perform the following functions:
1. elaborate the Energy Strategy of the Republic of Bulgaria and lay the said energy before the Council of Ministers for adoption;
2. adopt the short-term, medium-term and long-term overall national forecast energy balances in accordance with the strategy as adopted;
3. (supplemented, SG No. 74/2006) lay a list of energy works of strategic national importance, including ones extracting local hard fuel, before the Council of Ministers for endorsement;
4. (supplemented, SG No. 74/2006) define, by an order, the mandatory parameters of the level of reliability of electricity supply, as well as minimum safety standards for natural gas supply;
5. approve an inventory of the required new electricity generating capacities solely in cases where the security of electricity supply cannot be guaranteed through the effective licensing system under this Act, and promulgate the said inventory in the State Gazette;
6. lay before the Council of Ministers for endorsement an inventory of new self-contained areas for natural gas distribution and for modification of existing self-contained areas for natural gas distribution for which no licence has been issued, and promulgate the said inventory in the State Gazette;
7. approve restructuring programmes and strategies for the energy sector;
8. determine an overall annual quota for mandatory acquisition of electricity from producers utilizing primary local energy sources (of fuel), of up to 15 per cent of the combined primary energy required for the generation of electricity that is consumed in the country during each calendar year, for reasons of security of supply;
9. (repealed, SG No. 49/2007);
10. (supplemented, SG No. 74/2006, repealed, SG No. 49/2007);
11. (amended, SG No. 74/2006) based on adopted criteria, prepare analysis of the national potential for high efficiency combined production and evaluates the progress made on increasing the share of high efficiency combined production in the gross consumption of electric power every 4 years and publish it on Ministry of Economy and Energy web site;
12. make proposals for establishment and maintenance of national energy reserves and wartime energy reserves;
13. approve standard levels for the stocks of fuels necessary for secure energy supply;
14. (effective until 31.12.2005) lay before the Council of Ministers a proposal for grant of state aids to certain entities and/or activities in the energy sector;
15. exercises control in the cases provided for by this Act;
16. issue permits for prospecting and exploration of energy resources and organize procedures for the award of concessions for extraction of energy resources and for construction of hydro power works;
17. publish an annual bulletin on the status and development of the energy sector;
18. formulate and implement a state policy related to the activities comprehended in the transmission of oil and petroleum products through pipelines within and through the national territory;
18a. (new, SG No. 74/2006) represent the government in its relationships with other countries, as well as with commercial companies in all matters, related to the application of the Agreement to the Energy Charter and the implementation of transnational electricity, natural gas and oil transmission infrastructure building projects;
18b. (new, SG No. 74/2006, effective as of the date of entry into force of the Treaty concerning the Accession of the Republic of Bulgaria to the European Union) provide competent authorities in the European communities with all information under the law of the European communities;
18c. (new, SG No. 74/2006, effective as of the date of entry into force of the Treaty concerning the Accession of the Republic of Bulgaria to the European Union) according to its authority, send requests and notices to the competent authorities of the European communities for granting temporary relief from the application of provisions in the law of the European communities and transitional periods in the field of energy in all cases under the law of the European communities.
19. issue the statutory instruments of secondary legislation provided for in this Act according to the competence vested therein;
20. represent the Republic of Bulgaria in international organizations on energy matters;
21. exercise other powers as well, conferred thereon by other statutory instruments.
(3) The Energy Strategy adopted by the Council of Ministers under Item 1 of Article 4 (2) herein shall be promulgated in the State Gazette.
Article 5. (1) The list of energy works of strategic national importance, referred to in Item 3 of Article 4 (2) herein, shall be prepared on an annual basis by the Ministry of Economy and Energy and shall be laid by the Minister of Economy and Energy before the Council of Ministers for endorsement.
(2) Any persons performing activities under this Act by means of works included in the list referred to in Paragraph (1) shall enjoy protection which includes:
1. (supplemented, SG No. 74/2006) organization and control of physical protection (security) of works, implemented by the authorities of the Ministry of Interior or by persons conducting activities under the Private Security Business Act ;
2. information security, implemented through administrative, organizational and technical measures.
(3) The protection covered under Paragraph (2) shall be for the account of the persons performing the activities under this Act by means of works included in the list referred to in Paragraph (1).
(4) (New, SG No. 74/2006) Any persons carrying out activities under this act through sites, included in the list under Paragraph 1, shall carry out activities and work during military and non-military crises, as assigned to them by the Minister of Economy and Energy.
Article 6. (1) Municipality mayors shall require from energy companies operating on the territory of the municipalities thereof to submit forecasts of the development of demand for electricity, heat and natural gas, programmes and plans for electricity, heat and natural-gas supply.
(2) Acting on a proposal by the energy companies, municipality mayors shall mandatorily project, in the master plans and detailed plans, spatial renewal works required for implementation of the programmes and plans referred to in Paragraph (1).
(3) (Amended, SG No. 74/2006) Municipality mayors shall ensure the construction, operation, maintenance and development of the outdoor lighting networks and facilities within the territory of the municipality in respect of corporeal immovables constituting municipal property.
Article 7. (1) (Amended and supplemented, SG No. 74/2006) Upon conduct of the state policy in the energy sector, the Minister of Economy and Energy may be assisted by industrial branch chambers and organizations of energy and energy resource extraction sector workers.
(2) (Supplemented, SG No. 74/2006) Employers in the energy sector may establish and participate in industrial branch chambers and organizations of energy and energy resource extraction sector workers.
(3) (Supplemented, SG No. 74/2006) The industrial branch chambers and organizations of energy and energy resource extraction sector workers shall be registered under the terms and according to the procedure established by the Not-for-Profit Legal Entities Act .
(4) (Supplemented, SG No. 74/2006) The industrial branch chambers and organizations of energy and energy resource extraction sector workers shall:
1. have as an objective to represent and protect the common interests of the members thereof;
2. may negotiate with trade unions on issues of common interest and be parties in signing an industry-wide collective agreement;
3. (supplemented, SG No. 74/2006) elaborate rules for good manufacturing practices, models of systems for risk analysis of energy generation and/or energy resource extraction, as well as other professional criteria;
4. participate in the elaboration of strategies, analyses, programmes and opinions on the development of the sector and facilitate the implementation thereof;
5. (supplemented, SG No. 74/2006) create data bases on professionals in the sector available to assist energy producers and energy resource extractors, as well as the state bodies;
6. (supplemented, SG No. 74/2006) elaborate a Code of Ethics regulating professional ethics in the sector and prevention of unfair competition between energy producers and energy resource extractors;
7. (supplemented, SG No. 74/2006) notify the competent authorities of violations committed in the production of and trade in energy and/or energy resource and natural gas extraction;
8. give opinions on any amendments to statutory instruments for the respective industrial branch;
9. organize and deliver vocational training;
10. perform other functions as well assigned thereto by a law.
(5) (Supplemented, SG No. 74/2006) The state bodies and the management bodies of the industrial branch chambers and organizations of energy sector workers shall collaborate and inform each other of violations detected in the production of and/or trade in energy and/or energy resource and natural gas extraction.
(6) (Supplemented, SG No. 74/2006) The state bodies, institutions and central-government departments, the bodies of local self-government and local administration work shall assist and provide the industrial branch chambers and organizations of energy and energy resource extraction sector workers with information the said chambers and organizations need to perform the functions thereof provided for under this Act.

Section II
Energy Forecasting and Planning
Article 8. (1) (Amended, SG No. 74/2006) The Minister of Economy and Energy shall elaborate the Energy Strategy of the Republic of Bulgaria.
(2) (Amended, SG No. 74/2006) On the basis of the Energy Strategy of the Republic of Bulgaria, the Ministry of Economy and Energy shall prepare programmes and strategies for restructuring of the energy sector that shall be approved by the Minister of Economy and Energy. Commercial corporations in the energy sector shall be privatized in accordance with the programmes and strategies for restructuring of the energy sector, as approved by the Minister of Economy and Energy.
(3) There shall be short-term, medium-term and long-term overall national forecast energy balances. The said balances shall be prepared on the basis of:
1. (amended, SG No. 74/2006) forecasts, studies and plans of enterprises engaged in the activities comprehended in extraction, processing, conversion, transmission and distribution of energy resources and energy;
2. information from the overall indicative energy balances;
3. information provided by the National Statistical Institute.
(4) (Amended, SG No. 74/2006) The Minister of Economy and Energy shall determine the need of construction of new generating capacities and shall approve the inventory referred to in Item 5 of Article 4 (2) herein on the basis of:
1. the overall forecast energy balances;
2. the mandatory parameters of the level of reliability of electricity supply;
3. (amended, SG No. 74/2006) the development plan at minimum public expenses for new generation capacity, prepared by the electric power grid operator.
(5) (Amended and supplemented, SG No. 74/2006) The Minister of Economy and Energy shall implement an energy policy targeting national energy development with efficient utilization of energy and energy resources and meeting the demand of the public for electricity, heat and natural gas, oil products, and solid fuels on the basis of the overall forecast energy balances and in accordance with the Energy Strategy as adopted by the Council of Ministers.
(6) (Amended, SG No. 74/2006) The Minister of Economy and Energy shall perform oversight on the security of supply and shall publish all measures planned and taken, the results from the oversight, as well as the energy policy guidelines in the bulletin under Article 4, Paragraph 2, Item 17, as well as on Ministry of Economy and Energy's web site.
Article 9. (1) (Supplemented, SG No. 74/2006) Companies engaged in activities comprehended in energy resource extraction, processing and trade in fuels, conversion, transmission, distribution and trade in energy and natural gas shall:
1. (supplemented, SG No. 74/2006) conduct studies and analyses, elaborate short-term, medium term and long-term forecasts of the energy resource extraction, processing and trade in fuels and energy, and adopt the relevant plans ensuring the said activities;
2. (amended, SG No. 74/2006) prepare, at least once every two years, and submit to the Minister of Economy and Energy plans for rehabilitation, for measures to improve the efficiency of existing generating capacities and networks, and for the construction of new capacities and networks at minimum costs. The said plans shall be accompanied by a feasibility study, a financial analysis and an environmental impact analysis, and alternatives for energy saving.
(2) (Supplemented, SG No. 74/2006) The forecasts referred to in Paragraph (1), including the respective reporting information and the preliminary studies and a list of required new generating capacities and networks, and natural gas storage facilities, shall be submitted as follows:
1. (amended, SG No. 74/2006) to the Minister of Economy and Energy;
2. (supplemented, SG No. 18/2005) to the State Energy and Water Regulatory Commission;
3. to the mayors of the municipalities concerned for fulfilment of the obligations under Paragraph (6);
4. (supplemented, SG No. 74/2006) to the transmission companies and the electric power grid operator;
5. to the relevant distribution companies.
(3) (Amended and supplemented, SG No. 74/2006) The content, structure, terms and procedure for submission of the information covered under Paragraphs (1) and (2) shall be established in an ordinance of the Minister of Economy and Energy.
(4) (New, SG No. 74/2006) The content, structure, and procedure to present all information under Article 4, Paragraph 2, Item 18b, as well as under Article 21, Paragraph 1, Item 19a, shall be defined by a Council of Ministers ordinance, after a proposal by the Minister of Economy and Energy, and of the State Energy and Water Regulatory Commission.

Chapter Three
REGULATION OF ENERGY SECTOR ACTIVITIES
Section I
State Energy and Water Regulatory Commission
(Title amended, SG No. 18/2005)
Article 10. (1) (Amended, SG No. 18/2005) The State Energy and Water Regulatory Commission, hereinafter referred to as the "Commission", shall regulate energy-sector and water-supply and sewerage activities.
(2) The Commission shall be an independent specialized state body, a legal person with a head office in Sofia.
Article 11. (1) (Amended, SG No. 18/2005) The Commission shall be a collegial authority and shall consist of thirteen members, including a Chairperson and two Deputy Chairpersons, of whom one shall have experience in the energy sector, and the other shall have experience in water-supply and sewerage.
(2) (Amended, SG No. 18/2005) The Chairperson, the Deputy Chairpersons and the members of the Commission shall be elected and removed from office by a decision of the Council of Ministers and shall be appointed by an order of the Prime Minister.
(3) The term of office of the members of the Commission shall be five years.
Article 12. (1) Eligibility for membership of the Commission shall be limited to capable Bulgarian citizens who have graduated from a higher educational establishment, attaining an educational qualification degree of Master, and at least one of which shall be a qualified lawyer and one economist:
1. (supplemented, SG No. 18/2005) with length of employment and/or civil-service seniority of at least ten years, of which at least three years in the energy sector, applicable to five of the members, and in water supply and sewerage, applicable to the remaining five members;
2. who has not been sentenced to deprivation of liberty for a premeditated offence at public law.
(2) The following shall be ineligible for members of the Commission:
1. (supplemented, SG No. 18/2005) sole traders, shareholders, partners, managing directors, managerial agents or members of management or supervisory bodies, as well as liquidators and consultants of commercial corporations engaged in activities subject to licensing under this Act or to regulation under the Water-Supply and Sewerage Services Regulation Act;
2. occupants of another salaried position with the exception of academic research or teaching.
(3) Members of the Commission shall be removed prior to the expiry of the term of office thereof solely:
1. upon resignation in writing;
2. upon ascertainment of incompatibility with the qualifications for occupation of the office under this Act;
3. upon actual inability to discharge the duties thereof for more than 6 months;
4. when sentenced to deprivation of liberty for a premeditated offence at public law by an effective sentence.
(4) In the cases referred to in Paragraph (3), the Council of Ministers shall elect a new member to serve the remainder of the original term.
(5) The remuneration of the members of the Commission shall be fixed as follows:
1. (amended, SG No. 18/2005) for the Chairperson: 93 per cent of three average monthly wages of persons hired under an employment or under a civil-service relationship in the Electricity, Gas and Water Supply Sector as reported by the National Statistical Institute;
2. (amended, SG No. 18/2005) for the Deputy Chairpersons: 90 per cent of three average monthly wages of persons hired under an employment or under a civil-service relationship in the Electricity, Gas and Water Supply Sector as reported by the National Statistical Institute;
3. (amended, SG No. 18/2005) for the rest of the members of the Commission: 85 per cent of three average monthly wages of persons hired under an employment or under a civil-service relationship in the Electricity, Gas and Water Supply Sector as reported by the National Statistical Institute.
Article 13. (1) (Amended, SG No. 18/2005) The Commission shall be a standing body and shall meet if not fewer than seven of the members thereof are present, and shall exercise the powers thereof as follows:
1. under this Act: in the presence of not fewer than five of the members with experience in the sphere of the energy sector;
2. under the Water-Supply and Sewerage Services Regulation Act : in the presence of not fewer than five of the members with experience in the sphere of water supply and sewerage.
(2) (Amended, SG No. 18/2005) The Commission shall rule by reasoned decisions, which shall be individual or general administrative acts and shall be adopted by a majority of not fewer than seven votes, of which five shall belong to members of the Commission with experience in the relevant sphere in respect of which the decision is adopted.
(3) Commission meetings shall be open to the public when considering applications or requests related to:
1. the issuance, modification, supplementation, withdrawal and termination of a licence;
2. (amended, SG No. 18/2005) endorsement of prices proposed by the energy companies and by the water and sewerage utilities.
(4) In certain cases, the Commission may decide that the meetings referred to in Paragraph (3) be held behind closed doors, attendance thereat being limited to members of the Commission and the parties to the relevant proceeding.
(5) (Amended, SG No. 18/2005, supplemented, SG No. 74/2006) The decisions of the Commission under Paragraphs (3) and (4) shall be made in a meeting behind closed doors and shall be announced according to a procedure established in the Rules referred to in Article 16 (2) herein.
(6) In performance of the powers thereof, the Commission shall apply the rules of procedure provided for in this Act, and in cases unregulated thereby, the rules of the Administrative Procedure Code .
(7) Any decisions of the Commission, including a tacit refusal, shall be appealable before the Supreme Administrative Court. An appeal shall not stay the execution of a decision.
(8) The general administrative acts of the Commission that establish rules under this Act shall be promulgated in the State Gazette.
Article 14. (1) (Supplemented, SG No. 18/2005) The Commission shall conduct a procedure for public discussions with interested parties when drafting general administrative acts provided for in this Act and in the Water-Supply and Sewerage Services Regulation Act , as well as on other matters of public relevance for development of the energy sector and of the water and sewerage sector.
(2) (Supplemented, SG No. 18/2005, amended, SG No. 74/2006) Interested parties under Paragraph (1) shall be the state bodies, the industrial branch organizations, the energy companies, the water and sewerage utilities, the eligible consumers, directly related to the draft prepared, as well as consumer organizations.
(3) The Commission shall discuss with the interested parties the basic principles set in the draft and shall allow not less than 14 days for preparation of opinions on the said draft.
(4) The Commission shall consider all opinions submitted by interested parties and shall reason its own opinion, posting the reasoning on the Internet site thereof.
Article 15. (1) The Commission shall make public the policies pursued and the practice established in the implementation of its acts and reasoning for revision of the said acts in the bulletin published by the Commission or in another appropriate manner.
(2) The bulletin of the Commission shall be published once every six months and shall be posted on the Internet site of the Commission.
Article 16. (1) In its activities, the Commission shall be assisted by an administration.
(2) The activities of the Commission, the structure and organization of the administration thereof shall be determined in Rules of Organization adopted by the Council of Ministers.
(3) The ineligibilities referred to in Items 1 and 2 of Article 12 (2) shall apply to the employees of the specialized administration.
Article 17. The members of the Commission, as well as the employees of the administration thereof, shall be obligated to comply with the professional ethics rules adopted by the Commission.
Article 18. (Amended, SG No. 74/2006) (1) The Commission's Chairperson, its members and administrative officials shall not disclose any classified information they have created and stored, and which has become known to them in the course of their duties under this Act and under the Water-Supply and Sewerage Services Regulation Act , contained in list of facts, data, and subjects, constituting an official secret.
(2) The Commission, after coordination with the State Commission on Information Security, issues a decision to endorse, amend and supplement the list under Paragraph 1.
(3) The list under Paragraph 1 may include information, declared to be commercial secret by the applicants and licensees, only if its publication would not lead to unfair competition between companies or threaten commercial interests of third parties. This category of information the Commission shall include in the list after coordination with the Protection of Competition Commission.
(4) Any information constituting an official secret may be disclosed only to judicial authorities or other public authorities according to the procedure established by the law.
Article 19. (1) State bodies, energy companies and public officials shall assist the Commission in the performance of the functions thereof.
(2) In the performance of the functions thereof, the Commission may collaborate with persons representing and protecting consumer interests.
Article 20. The Chairperson of the Commission shall perform the following functions:
1. organize and direct the activities of the Commission and of the administration thereof according to this Act and the decisions of the Commission;
2. represent the Commission in dealing with third parties;
3. appoint and dismisses the employees of the administration;
4. submit annually a report on the performance of the Commission to the Council of Ministers;
5. organize the preparation of the budget and lay it before the Commission for consideration and adoption;
6. be responsible for the implementation, balancing off and reporting of the budget of the Commission;
7. lay the annual report and the periodic financial statements before the Commission for adoption.

Section II
Powers of the Commission
Article 21. (1) (Previous Article 21, SG No. 18/2005) For regulation of the activities comprehended in electricity generation, transmission and distribution, natural gas transmission and distribution, trade in electricity and natural gas, heat generation and transmission, the Commission shall exercise the following powers:
1. issue, modify, supplement, suspend, terminate and withdraw licences in the cases provided for in this Act;
2. adopt and publish guidelines for the activities thereof;
3. draft the statutory instruments of secondary legislation provided for in this Act;
4. approve the general conditions of the contracts provided for in this Act;
5. exercise control in the cases provided for in this Act;
6. perform price regulation in the cases provided for in this Act;
7. (amended, SG No. 74/2006) adopt the rules for trade in electricity and natural gas (Market Rules) and the technical rules for the networks (Grid Code), proposed by energy companies, and control compliance with the said rules;
7a. (new, SG No. 74/2006, effective 1.07.2007) adopts rules on electricity and natural gas supply from end suppliers as part of the electricity and natural gas trade rules under Item 7;
8. adopt and control the implementation of a methodology for setting of prices for balancing electricity as part of the rules for trade in electricity under Item 7;
9. set the rules for access to the electricity and natural gas transmission networks, respectively to the electricity and natural gas distribution networks (Rules on Network Access);
10. acting on a proposal by the relevant transmission or distribution company, decide on the classification of the electric power lines, heating mains, natural gas pipelines and the facilities appurtenant thereto within the transmission or distribution networks and issue mandatory directions for their purchase and/or provision of access thereto;
11. conduct the tendering procedures under Article 46 herein;
12. develop and control compliance with the conditions and rules for supply of electricity, heat and natural gas to consumers, including the quality of service standards;
13. (amended, SG No. 74/2006) review energy companies' requests for the reimbursement of any non-recoverable costs or any costs resulting from public obligations imposed on them under Articles 34 and 35, endorse the reasonable size and the terms of such reimbursement;
14. issue certificates to electricity producers on the origin of the electricity commodity that is generated from renewable energy sources and upon combined generation of electricity and heat;
15. (repealed, SG No. 74/2006) ;
16. (amended and supplemented, SG No. 74/2006) set, according to a methodology or instructions adopted by the Commission, the permissible allowances for technological losses of electricity in the process of its generation, transmission and distribution, in the process of generation and transmission of heat, and in the process of natural gas transmission, distribution and storage;
17. (repealed, SG No. 74/2006, effective 1.07.2007) ;
17a. (new, SG No. 74/2006, effective 1.07.2007) set the electric power availability for generation, according to which each producer shall make agreements with end suppliers and/or the public provider with regard to the implementation of principles under Article 24, Paragraph 1;
18. grant consent to the division by the formation of new companies, division by acquisition, merger by acquisition, or merger by the formation of a new company in respect of any energy companies which are holders of licences under this Act;
19. approve the transactions in property used in the performance of licensed activities (Capital Improvements and Lending Operations) in the cases provided for in this Act, as well as in other transactions that will or may affect the security of supply as a result of indebtedness of the energy company;
19a. (new, SG No. 74/2006, effective as of the date of entry into force of the Treaty concerning the Accession of the Republic of Bulgaria to the European Union) provide the competent authorities of the European Communities all information under the law of the European Communities;
19b. (new, SG No. 74/2006, effective as of the date of entry into force of the Treaty concerning the Accession of the Republic of Bulgaria to the European Union) according to its authority, send requests and notices to the competent authorities of the European communities for granting temporary relief from the application of provisions in the law of the European communities and transitional periods in the field of energy in all cases under the law of the European communities;
19c. (new, SG No. 74/2006) publish an annual report on its activity, including results from the control to avoid restriction and violation of energy market competition and efficient functioning.
20. adopt the draft annual budget and the financial report of the Commission, as submitted by the Chairperson, and the report referred to in Item 4 of Article 20 herein;
21. exercise other powers provided for by a law.
(2) (New, SG No. 18/2005) The powers of the Commission to regulate activities in the sphere of water supply and sewerage shall be determined in the Water-Supply and Sewerage Services Regulation Act.
Article 22. (1) (Amended, SG No. 18/2005) The Commission shall consider complaints:
1. by consumers against licensees or by licensees against other licensees, related to performance of the licensed activity;
2. by consumers against water and sewerage utilities, or by water and sewerage utilities against water and sewerage utilities, related to the subject matter regulated under the Water-Supply and Sewerage Services Regulation Act.
(2) Upon receipt of a complaint, the Chairperson of the Commission shall order an inquiry according to the procedure established by Chapter Eight herein.
(3) The Commission may facilitate an amicable settlement of the dispute within two months after receipt of a complaint under Paragraph (1). The Commission may extend this period by an additional two months if the subject of dispute requires collection of additional data and information by the Commission.
(4) Where the dispute has been settled amicably by means of reaching a written agreement between the parties and any of the parties has failed to comply with the obligations thereof under the said agreement, the other party may refer the dispute subject of the agreement to a court of law for settlement.
(5) The procedure for the submission of complaints, the consideration thereof and the procedure for amicable settlement of disputes shall be regulated in the ordinance referred to in Article 60 herein.
Article 23. (1) In exercising the regulatory powers thereof, the Commission shall be guided by the following general principles:
1. prevention and preclusion of limitation or distortion of competition on the energy market;
2. balancing the interests of energy companies and consumers;
3. ensuring non-discrimination between the various categories of energy companies and between groups of consumers;
4. providing incentives for efficient operation of regulated energy companies;
5. providing incentives for development of a competitive market for energy sector activities, where conditions so permit.
(2) In implementation of the principle under Item 1 of Paragraph (1), the Commission may notify the Commission for the Protection of Competition for initiation of proceedings according to the procedure established by the Protection of Competition Act.
Article 24. (1) (Amended, SG No. 74/2006) Implementing the power thereof referred to in Paragraph 1, Item 7a, 17a of Article 21 (1) and § 135 herein, the Commission shall adhere to the following principles:
1. (amended and supplemented, SG No. 74/2006) fair allocation of the economic consequences of market liberalisation between all parties to transactions in electricity and natural gas;
2. (supplemented, SG No. 74/2006) ensuring equal terms for conclusion of transactions at freely negotiated prices, compared to the transactions concluded with the public provider or the public suppliers of electricity and natural gas;
3. (supplemented, SG No. 74/2006) ensuring a balanced adjustment of end-user prices, taking into account the public service obligations, public obligations, and non-recoverable costs of the public provider or the public suppliers.
4. (new, SG No. 74/2006) ensuring all measures required to supply consumers with electricity and natural gas of certain quality at fully comparable, transparent, and objectively set prices, applied on equal-treatment conditions.
(2) The eligibility requirements for the persons entitled to conclude transactions under Article 100 (1) herein, as well as the conditions for granting network access, shall be established by rules adopted by the Commission.
Article 25. (1) The Commission shall keep public registers of:
1. any licences as issued, recording therein all licensees, licences issued and other particulars;
2. any certificates of origin as issued, recording therein the holder and the generating capacity, the quantities of electricity for which the certificate was issued, and the period of generation;
3. (repealed, SG No. 74/2006);
4. (repealed, SG No. 74/2006);
5. any permits as issued by the Commission under this Act.
(2) (Amended, SG No. 74/2006) The particulars recordable under Items 1 and 5 of Paragraph (1), the procedure for recording in the registers and for obtaining information shall be determined in the ordinance referred to in Article 60 herein. The particulars recordable under Items 2, of Paragraph (1), the procedure for recording in the register and for obtaining information shall be determined by the ordinance referred to in Article 159 (3) herein.
(3) Any decisions of the Commission to issue, modify, supplement, withdraw and terminate licences, as well as any decisions to endorse prices, shall be published in the bulletin of the Commission.

Section III
Financing of the Commission. Fees
Article 26. (1) (Supplemented, SG No. 18/2005) The activities of the Commission and of the administration thereof shall be financed from the revenue specified under Article 27 (1) herein and in the Water-Supply and Sewerage Services Regulation Act .
(2) The Commission shall be a first-level spending unit.
Article 27. (1) The revenues on the budget of the Commission shall be raised from:
1. (amended, SG No. 18/2005) the fees collected by the Commission under Article 28 herein and under Items 1 and 3 of Article 8 (1) of the Water-Supply and Sewerage Services Regulation Act , and any interest thereon;
2. (supplemented, SG No. 18/2005) twenty per cent of the fines and pecuniary penalties provided for in this Act and in the Water-Supply and Sewerage Services Regulation Act;
3. donations from persons not subject to licensing under this Act or from persons connected therewith within the meaning given by the Commerce Act.
(2) (Supplemented, SG No. 18/2005) No donation may be accepted from any persons subject to licensing under this Act or subject to regulation under the Water-Supply and Sewerage Services Regulation Act from any persons connected therewith within the meaning given by the Commerce Act.
(3) The resources referred to in Paragraph (1) shall be expended on:
1. (supplemented, SG No. 18/2005) financing the activities of the Commission and of the administration thereof, including the conduct of studies, analyses and expert assessments associated with the regulatory activities under this Act and under the Water-Supply and Sewerage Services Regulation Act ;
2. capital expenditure on development of facilities;
3. upgrading the qualifications of the employees in the administration;
4. incentive pay according to a procedure established in the Rules of Organization.
(4) The resources referred to in Item 4 of Paragraph (3) shall be fixed at up to 25 per cent of the annual wage bill and shall be incorporated into the budget of the Commission for the respective year.
(5) If the annual revenues from fees under this Act exceed or are insufficient to cover the necessary expenditures on the budget of the Commission for the succeeding calendar year, the Chairperson of the Commission may propose a review of the amount of the fees.
Article 28. (1) (Amended, SG No. 18/2005) For exercise of the regulatory powers thereof under this Act and under the Water-Supply and Sewerage Services Regulation Act, the Commission shall charge fees for consideration of applications, for issuance of certificates, for sale of tender documents, licensing fees, and experts registration fees.
(2) The amount of the fees covered under Paragraph (1), the procedure and time limits for payment thereof shall be established by a rate schedule approved by the Council of Ministers on a motion by the Commission.
(3) (New, SG No. 74/2006) Any fees collected under the procedure of this Act and the Water-Supply and Sewerage Service Regulation Act, shall be public state receivables.
Article 29. (1) The fee for consideration of an application shall be paid upon submission of the application.
(2) Any persons who have obtained a licence shall pay licensing fees for each licence issued, as well as for any modification of the licence in the cases specified in the rate schedule.
(3) There shall be the following licensing fees:
1. initial: for issuance or modification of a licence, covering the expenses on preparation and expenses on the regulatory activity under the licence until the end of the current year;
2. annual: covering the expenses on the regulatory activity under the licence for the respective year;
(4) Annual fees for the term of validity of the licence, as well as for the term of any extension thereof, shall be paid by the licensee for every year succeeding the year of its issuance.
(5) Licensing fees shall be fixed depending on the type of licensed activity performed and shall be differentiated on the basis of criteria determined by the rate schedule referred to in Article 28 (2) herein.

Section IV
Price Regulation
Article 30. (1) The following prices shall be subject to regulation by the Commission:
1. at which producers sell electricity to the public provider and/or to public suppliers;
1a. (new, SG No. 74/2006, effective 1.07.2007) at which producers, within the availability set by the Commission under Article 21, Paragraph 1, Item 17a, sell electricity to the end supplier or the public provider;
2. (supplemented, SG No. 74/2006) at which producers sell heat to the heat transmission company and to directly connected consumers;
3. at which the heat transmission company sells heat to consumers;
4. (amended, SG No. 74/2006) at which the public provider sells electricity to public suppliers, to consumers connected to the transmission network, and to the distribution company, in order to cover the technological costs of transmission;
4a. (new, SG No. 74/2006, effective 1.07.2007) at which the public provider sells to end suppliers any electricity purchased under Article 21, Paragraph 1, Item 17a;
5. at which the public provider sells natural gas to public suppliers of natural gas and to consumers connected to the natural gas transmission network;
5a. (new, SG No. 74/2006, effective 1.07.2007) at which the public provider sells any natural gas to end suppliers of natural gas;
6. at which public providers sell electricity and natural gas to consumers connected to the respective distribution networks or to public suppliers;
6a. (new, SG No. 74/2006, effective 1.07.2007) at which end suppliers sell electricity and natural gas to home consumers and companies with less than 50 employees and less than 19.5 mil. BGN annual turnover;
7. for transmission of electricity and natural gas to consumers through the respective transmission and/or distribution networks, except for the prices of transit transmission;
8. for connection to the networks;
9. for storage of natural gas.
10. (new, SG No. 74/2006, effective on the date of entry into the Commercial Registry the decision to transform National Electric Company EAD, but not later than the date of entry into force of the Treaty concerning the Accession of the Republic of Bulgaria to the European Union) for access to the electricity transmission and electricity distribution networks.
(2) The prices of electricity referred to in Items 1, 4 and 6 of Paragraph (1) shall be subject to regulation until all consumers acquire the status of eligible consumers.
(3) The prices of natural gas referred to in Items 5 and 6 of Paragraph (1) shall be subject to regulation until all consumers acquire the status of eligible consumers.
(4) Prices of energy, natural gas and services provided by the energy companies shall not be subject to regulation by the Commission when the latter establishes the existence of competition creating prerequisites for free negotiation of the prices on market terms for the respective energy sector activity.
Article 31. (Supplemented, SG No. 74/2006) In exercising its price regulation powers, in addition to the principles under Articles 23 and 24 herein, the Commission shall be guided by the following principles as well:
1. prices shall be non-discriminatory, based on objective criteria and determined in a transparent manner;
2. prices of energy companies shall cover the economically justified operating costs, including the costs of:
(a) management, operation and maintenance of energy works;
(b) maintenance of stand-by and regulating capacities required for reliable supply to consumers;
(c) delivery and maintenance of the stocks of fuels;
(d) repairs;
(e) depreciation;
(f) storage and processing of spent nuclear fuel and radioactive waste, decommissioning of nuclear facilities, and nuclear safety;
3. apart from the costs covered under Item 2, prices shall include non-recoverable costs related to the transition to a competitive energy market, as well as costs resulting from fulfilment of public obligations related to security of supply;
4. prices must ensure an economically justified rate of capital return;
5. prices for the individual groups of consumers shall conform to the costs of delivery of energy and natural gas to the said consumers;
6. avoidance of cross subsidization through the prices:
(a) between individual groups of consumers;
(b) for integrated energy companies: between individual activities subject to licensing under this Act, and/or between activities subject to licensing under this Act and other activities.
7. (new, SG No. 74/2006) fair passing of any renewable energy source and combined electricity and heat generation preferential pricing costs to electricity end consumers;
8. (new, SG No. 74/2006) fair passing of any system service, incl. ancillary services, cold reserve, and technology, costs to transmission network, respectively distribution network, users.
Article 32. (1) The Commission may regulate prices by setting an upper limit for prices or income, by setting efficiency parameters for energy companies, parameters of comparability between such companies, achievement of basis criteria.
(2) The Commission may determine:
1. price components reflecting the cost structure;
2. time-of-the-day, seasonal and other tariff structures of prices in accordance with costs.
(3) (New, SG No. 74/2006) The Commission shall endorse a price of heat for end consumers as a single-component price.
Article 33. (Amended, SG No. 74/2006) (1) (Amended, SG No. 49/2007) The Commission shall set preferential prices for sale of electricity generated from co-generation by combined heat and power plants under Article 162 (2) herein.
(2) (Repealed, SG No. 49/2007).
(3) The preferential price of any electricity produced using a combined method by plants for combined electricity and heat production under Paragraph 1 shall be set based on individual production costs plus surcharge set by the Commission on producer groups and criteria according to the ordinance under Article 35, Paragraph 3.
(4) Acting on a proposal by the respective heat transmission company, the Commission shall determine a preferential price for heat for the association referred to in Article 151 (1) herein and for the supplier under Article 149a.
Article 34. (1) Energy companies shall have the right to lodge requests for allowance and compensation of non-recoverable costs.
(2) Non-recoverable costs shall be the costs resulting from investments made and/or transactions concluded prior to the entry of this Act into force by energy companies, which cannot be recovered as a result of the establishment of a competitive electricity market.
(3) Energy companies under Paragraph (1) shall submit applications to the Commission for allowance of costs as non recoverable and establishment of the amount thereof. Any such applications shall be accompanied by evidence of the grounds for incurrence of such non-recoverable costs and the amount thereof.
(4) The Commission shall determine the maximum total amount and period of compensation of allowed non-recoverable costs for each individual company.
(5) The Commission, guided by the principles under Article 23 herein and taking into account the changes in competitive conditions, shall:
1. recalculate annually the maximum total amount of the compensation related to non-recoverable costs;
2. determine the recoverable volume for the respective period;
3. allocate them among the respective energy companies.
(6) The manner of compensation of non-recoverable costs will be determined in the ordinances referred in Article 36 (3) herein.
(7) Compensation of non-recoverable costs shall be effected by all consumers in a non-discriminatory and transparent manner.
Article 35. (1) Energy companies shall have the right to request compensation of expenses resulting from public obligations imposed thereon, including such related to security of supply, environmental protection, and energy efficiency.
(2) The following shall be treated as expenses under Paragraph (1):
1. resulting from obligations to purchase electricity from producers, winners of tendering procedures under Article 46 herein;
2. resulting from obligations to generate electricity using local primary energy sources under Item 8 of Article 4 (2) herein;
3. (amended, SG No. 49/2007) resulting from obligations to purchase electricity at preferential prices under Article 162 and under Article 15 of the Renewable and Alternative Energy Sources and Bio fuels Act herein;
4. other additional obligations.
(3) Energy companies under Paragraph (1) shall submit periodically to the Commission applications for compensation of such costs. The application shall be accompanied by evidence of the legal grounds and the amount of the said costs.
(4) The Commission shall determine the volume of compensation for each individual company and the overall volume for compensation for the respective period.
(5) The manner of compensation for costs resulting from public obligations shall be determined in the ordinances referred to in Article 36 (3) herein.
(6) Costs resulting from public obligations shall be compensated by all consumers in a non-discriminatory and transparent manner.
Article 36. (1) Prices that are subject to regulation shall be formed by the energy companies in compliance with the requirements of this Act and the ordinances referred to in Paragraph (3). The instructions adopted by the Commission shall be mandatory for the energy companies.
(2) (Repealed, SG No. 74/2006).
(3) The methods of price regulation, the rules for price formation or setting and modification, the procedure for provision of information, for submission of proposals on prices and for endorsement of prices shall be established by ordinances on electricity, heat and natural gas adopted by the Council of Ministers on a motion by the Commission.
Article 36a. (New, SG No. 74/2006) (1) The public electricity and natural gas provider, the public electricity or natural gas suppliers, and the end electricity or natural gas suppliers, as well as the heat transmission companies, within one month prior to submitting the request for new price endorsement or current price modification shall publish in the media their proposal for endorsing new or modifying current prices.
(2) The Commission shall endorse prices under Paragraph 1 as price limits for each licensee by a decision, which shall be an individual administrative act.
(3) Within 7 days after receiving the decision under Paragraph 2, the licensee shall publish in the media the price limits endorsed and the consumer agreement prices.

Section V
Separate Accounting
Article 37. (1) Energy companies shall keep separate accounts of:
1. each activity subject to licensing under this Act;
2. activities subject to licensing under this Act and other activities;
3. each branch or company;
4. activities in the cases of regulated and freely negotiated prices.
(2) The rules for keeping separate accounts by energy companies, including assets for the purposes of pricing by groups of consumers, as well as the form and content of the financial statements for regulatory purposes, shall be established by a decision of the Commission according to a procedure established in the ordinances referred to in Article 36 (3) herein.
Article 38. (1) Energy companies shall be obligated to submit the following to the Commission on an annual basis:
1. their annual financial statements, including the notes thereto, according to the Accountancy Act, and the annual audit reports;
2. reports by types of activity.
(2) Energy companies shall be obligated, when so requested by the Commission for the purposes of price regulation, to submit to the Commission the entire accounting documentation and technical and economic information, including contracts concluded.

Chapter Four
LICENCES
Section I
Issuance of Licences
Article 39. (1) The following activities shall be subject to licensing under this Act:
1. generation of electricity and/or heat;
2. transmission of electricity, heat and natural gas;
3. distribution of electricity or natural gas;
4. storage of natural gas;
5. trade in electricity;
6. organizing an electricity market;
7. public delivery of electricity or natural gas;
8. (repealed, SG No. 74/2006, effective 1.07.2007);
9. transit transmission of natural gas.
10. (new, SG No. 74/2006, effective 1.07.2007) electricity or natural gas supply from end suppliers;
11. (new, SG No. 74/2006, effective on the date of entry into the Commercial Registry the decision to transform National Electric Company EAD, but not later than the date of entry into force of the Treaty concerning the Accession of the Republic of Bulgaria to the European Union) electric power grid management;
12. (new, SG No. 74/2006) pulling power electricity distribution over the railroad transportation distribution networks.
(2) A licence shall authorize performance of any of the activities covered under Paragraph (1) subject to the conditions stated therein and shall constitute an integral part of the decision on the issuance thereof.
(3) Where a licence is issued for performance of any of the activities covered under Paragraph (1) before construction of the energy work required for implementation of the said activity, the licence shall state the conditions for construction of the said work and a time limit for commencement of the licensed activity.
(4) (Amended, SG No. 74/2006) Issuance of a licence shall not be required for:
1. electricity generation by person, having a plant with a total installed electric power up to 5 MW;
2. heat generation by person, having a plant with a total installed heat generating capacity up to 5 MW;
3. heat transmission by person, having a heat transmission network, connecting plants with a total installed power up to 5 MW;
4. generation of heat for own consumption only.
(5) (New, SG No. 74/2006) When the person, applying for licence for any activity under Paragraph 1, Items 1-3, 5-8, 10, or 11, or having such licence, meets the requirements for a balancing group coordinator, the respective licence shall also contain all rights and obligations, related to the balancing group coordinator activities.
Article 40. (1) A licence shall be issued to a legal person registered under the Commerce Act which:
1. possesses the technical and financial capabilities, material and human resources and organizational structure required to meet the regulatory requirements for performance of the licensed activity;
2. (amended and supplemented, SG No. 74/2006, effective on the date of entry into the Commercial Registry the decision to transform National Electric Company EAD, but not later than the date of entry into force of the Treaty concerning the Accession of the Republic of Bulgaria to the European Union) holds real rights to the energy works whereby the activity is to be performed, if the said facilities are constructed, with the exception of the licensees referred to in Items 5, 6, 7, 8, and 11 of Article 39 (1) herein;
3. furnishes evidence that the energy works whereby the licensed activity s to be performed meet the regulatory requirements for safe operation and environmental protection.
(2) The terms established by Items 1 to 3 of Paragraph (1) must be fulfilled at the time of commencement of the licensed activity in case of issuance of a licence under Article 39 (3) herein.
(3) (New, SG No. 65/2006) A licence referred to in Article 39, Paragraph (1), Item 4 shall be issued in compliance with the provisions of Articles 118a (3) - (6) of the Water Act.
(4) (Renumbered from Paragraph 3, SG No. 65/2006) A licence shall not be issued to any person which:
1. is subject to instituted bankruptcy proceedings or has been adjudicated bankrupt;
2. is placed in liquidation;
3. has had a licence for the same activity withdrawn or the issuance of a such licence has been refused thereto, and the period referred to in Article 59 (3) herein or under Article 41 (4) herein has not yet expired.
(5) (Renumbered from Paragraph 4, SG No. 65/2006) A licence shall not be issued if there is a risk to the life and health of citizens, to property of third parties and to the interests of consumers, of disturbing the reliable supply of electricity, heat and natural gas.
(6) (Renumbered from Paragraph 5, SG No. 65/2006) In cases where one and the same person performs more than one of the activities subject to licensing, separate licences shall be issued for each of the said activities. The Commission shall ensure that there are no conflicts in the regime of performance of the individual licensed activities.
(*) (7) (New, SG No. 74/2006, effective as of the date of entry into force of the Treaty concerning the Accession of the Republic of Bulgaria to the European Union) A licence under Paragraph 1 shall also be issued to a legal person, registered under the law of any member country of the European Union, or any other country, which is party to the European Economic Area Agreement, under the terms of Paragraphs 1-5.
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(*) Editor's note: The Energy Act Amendment Act of SG No. 74/2006, in its Article 40, creates a new Paragraph 6, which is not brought in accordance with the order of Paragraphs in this Article. With the amendments of the Water Act Amendment Act of SG No. 65/2006, Paragraph 6 is already created.
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Article 41. (1) The procedure for the issuance of a licence shall be initiated acting on a written application accompanied by all documents required for the issuance of a licence.
(2) Should the licensed activity be performed at prices subject to regulation under this Act, an application for endorsement of the said prices shall be submitted attached to the application referred to in Paragraph (1).
(3) Within three months after submission of any application referred to in Paragraphs (1) and (2), the Commission shall issue a licence or shall refuse to issue a licence by a reasoned decision and shall endorse or determine the relevant prices.
(4) In cases of refusal, the applicant may submit a new request for the issuance of a licence not earlier than three months after the decision on a refusal or, respectively, after the entry into effect of the judgment of court whereby any appeal is dismissed as unfounded.
Article 42. (1) Licences shall be issued for a term of validity not exceeding 35 years in accordance with the requirements of the ordinance referred to in Article 60 herein.
(2) The term of validity of a licence may be extended for a period not exceeding the term referred to in Paragraph, provided that the licensee satisfies the conditions established by the law and fulfils all obligations and requirements under the licence and has submitted a written request for an extension at least one year prior to the expiry of the term of the original licence.
(3) In a decision to extend the term of validity under Paragraph (2), the Commission shall also determine the conditions for performance of the activity for the new term of validity of the licence.
Article 43. (1) Only a single licence shall be issued within the national territory for:
1. transmission of electricity or of natural gas;
2. organizing an electricity market;
3. public delivery of electricity or of natural gas;
4. (new, SG No. 74/2006, effective on the date of entry into the Commercial Registry the decision to transform National Electric Company EAD, but not later than the date of entry into force of the Treaty concerning the Accession of the Republic of Bulgaria to the European Union) electric power grid management.
(2) Only a single licence shall be issued for one self contained area for:
1. distribution of electricity or of natural gas;
2. (repealed, SG No. 74/2006, effective 1.07.2007);
2a. (new, SG No. 74/2006) electricity or natural gas supply by end suppliers;
3. transmission of heat.
(3) A self-contained area for distribution of electricity shall comprise not fewer than 150,000 consumers connected to the adjoining distribution network and shall be coextensive with at least one administrative region according to the territorial administration of Bulgaria.
(4) (New, SG No. 74/2006, effective 1.07.2007) For a self-contained area under Paragraph 3, a single licence on electricity supply from end suppliers shall be issued.
(5) (Renumbered from Paragraph 4, SG No. 74/2006) A self-contained areas for distribution of natural gas shall comprise not fewer than 50,000 consumers, which may be connected to the adjoining distribution network, and the boundaries thereof shall be determined by the inventory referred to in Item 6 of Article 4 (2) herein.
(6) (New, SG No. 74/2006, effective 1.07.2007) For a self-contained area under Paragraph 5, a single licence on natural gas supply from end suppliers shall be issued.
(7) (Renumbered from Paragraph 5, SG No. 74/2006) A self-contained area for transmission of heat shall be designated conforming to the projections of the approved spatial development schemes and plans of the nucleated settlement.
(8) (Renumbered from Paragraph 6, amended SG No. 74/2006) The provision made in Paragraph 6 shall not apply, where an interest has been expressed in natural gas supply of a particular area which is not included in the inventory referred to in Item 6 of Article 4 (2) herein. In this case, the area, subject to investment interest, shall be designated as a self-contained area for natural gas distribution. Licences on natural gas distribution, as well as on public supply or natural gas supply from end supplier in this area, shall be issued without a tender for the interested investor under the terms of Section I of this Chapter and according to the procedure in the ordinance under Article 60, after coordinating with the respective municipality.
(9) (Renumbered from Paragraph 7, amended, SG No. 74/2006) If there is more than one gas supply request for the area under Paragraph 8 submitted, the Commission shall announce a tender under the terms of Section II of this Chapter and according to procedure in the ordinance under Article 60.
(10) (Renumbered from Paragraph 8, amended, SG No. 74/2006) By Commission decision to amend the licence, the area of the municipality, which is outside the list under Article 4, Paragraph 2, may be joined to a self-contained area for natural gas distribution upon declared request by the respective municipality and consent of the titleholder of the natural gas distribution licence for the self-contained area.
(11) (New, SG No. 74/2006) Provisions of Paragraphs 8 and 9 shall not apply, when the consent under Paragraph 10 by the titleholder of the natural gas distribution licence for the self-contained area has been obtained.
(12) (New, SG No. 74/2006) For the territory of the country, a single pulling power electricity distribution licence shall be issued only for the railroad transportation distribution networks to the National Railroad Infrastructure Company.
Article 44. (1) (Amended, SG No. 74/2006, effective on the date of entry into the Commercial Registry the decision to transform National Electric Company EAD, but not later than the date of entry into force of the Treaty concerning the Accession of the Republic of Bulgaria to the European Union) Any person where to a licence for electricity system management has been issued may not be issued a licence for another activity subject to licensing under this Act, except a licence for organizing an electricity market.
(2) Any person where to a licence for natural gas transmission has been issued may not be issued a licence for another activity subject to licensing under this Act, except a licence for storage of natural gas and a licence for transit transmission of natural gas. Any persons where to a licence for transmission of natural gas has been issued may not engage in natural gas trade.
(3) (Amended, SG No. 74/2006) Any persons where to licences for distribution of electricity have been issued may not be issued licences for other activities subject to licensing under this Act.
(4) (New, SG No. 74/2006) Any persons where to licences for natural gas distribution have been issued may not be issued licences for other activities, subject to licensing under this Act, except licences for public natural gas supply or natural gas supply from an end supplier, if the consumers attached to the gas distribution network in the respective area are less than 100 000.
Article 45. A licence shall state:
1. the designation of the licensee;
2. the activity for which the licence is issued;
3. the works whereby the licensed activity is to be performed;
4. the territorial scope of the licence for the activities for which it is required;
5. the term of validity of the licence;
6. the types of insurance, the risks covered, and the amount of insurance cover which the licensee is obligated to maintain as long as it performs the licensed activity;
7. requirements for decommissioning of the energy works whereby the activity is to be performed;
8. any other special regulatory requirements related to performance of the licensed activity.

Section II
Tendering Procedure
Article 46. (1) Solely in the cases of a need of a new electricity generating capacity, ascertained and made public according to the procedure established by Item 5 of Article 4 (2), the holder of the licence stating an obligation to construct the said capacity shall be selected by a tendering procedure.
(2) The holders of licences for distribution of natural gas for self-contained areas designated by the inventory referred to in Item 6 of Article 4 (2) herein shall be selected by tendering procedures.
(3) The winner of a tendering procedure under Paragraph (1) or Paragraph (2) shall be issued a licence under Article 39 (3) herein.
(4) (Supplemented, SG No. 74/2006, effective as of the date of entry into force of the Treaty concerning the Accession of the Republic of Bulgaria to the European Union) Where the winner in a tendering procedure is a non-resident person, not registered in a member country of the European Union, or another country party to the European Economic Area Agreement, the licence shall be issued to a corporation registered under the Commerce Act wherein the non-resident person holds at least 67 per cent of the corporate capital. Any such person shall have no right to transfer the participating interest thereof in the licensee corporation to a third party until the date of commencement of the licensed activity.
(5) The public provider shall conclude a contract for purchase of electricity with the winner of the tendering procedure under Paragraph (1).
Article 47. (1) A tendering procedure shall be announced by the Commission in accordance with the inventory referred to in Item 5 or 6 of Article 4 (2) herein and shall be held under terms and according to a procedure established by the ordinance referred to in Article 60 herein.
(2) The tender documents shall be prepared in accordance with the ordinance referred to in Article 60 herein and shall be endorsed by the Commission. The tender documents shall include a draft licence and, in the case under Article 46 (1) herein, also a drafts a contract for purchase of electricity.
(3) The tendering procedure shall be announced by a decision of the Commission which shall be promulgated in the State Gazette not later than six months before the time limit for submission of applications for participation in the tendering procedure. The decision of the Commission announcing the tendering procedure shall be appealable solely together with the decision declaring the winner of the tendering procedure.
Article 48. Where no application is received by the time limit for submission of applications for participation in the tendering procedure, or where only a single such application is received, the said time limit may be extended by not more than 60 days reckoned from the date of promulgation of the notice of extension of the time limit in the State Gazette. In such a case, the date of conduct of the tendering procedure shall be changed as well.
Article 49. (1) The Commission shall adopt a decision appointing a tender board for conduct of the tendering procedure, chaired by a member of the Commission. The said board shall include employees of the administration of the Commission and, depending of the subject of the tendering procedure, also representatives of the municipalities concerned and interested central- government departments and organizations as well.
(2) The tender board shall consider and evaluate the bids of the candidates and shall propose to the Commission to make a decision designating the winner of the tendering procedure.
(3) (Amended, SG No. 74/2006) Within 14 days after receipt of the proposal of the tender board, the Commission shall rank the candidates, shall adopt a reasoned decision designating the winner of the tendering procedure and shall issue the respective license thereto.
(4) (Amended, SG No. 74/2006) The Commission shall notify the candidates on its decision referred to in Paragraph 3.
Article 50. (1) The Commission shall cancel the tendering procedure and shall announce a new tendering procedure where:
1. only a single candidate has appeared, or
2. the proposals of the candidates are not responsive to the tendering procedure requirements.
(2) Should after the tendering procedure is re-announced only a single candidate has appeared, the Commission shall declare the said candidate the winner of the tendering procedure, provided that the said candidate is responsive to the tendering procedure requirements.

Section III
Modifications, Supplementations, Termination
and Withdrawal of Licences
Article 51. (1) A licence may be modified and/or supplemented by a decision of the Commission:
1. at the request of the licensee;
2. on the Commission's own initiative.
(2) The Commission shall have the right to initiate a modification and/or supplementation of a licence as issued in the following cases:
1. in order to ensure reliability or uninterrupted and high quality supply of electricity, heat and natural gas to consumers;
2. upon change in the relevant legislation;
3. to safeguard national security and public order in coordination with the relevant competent state bodies;
4. in case of risk to the life and health of citizens, of damage to the environment or to the property of third parties, when this does not necessitate withdrawal of the licence, and/or on a motion by specialized state bodies in pursuance of the powers vested therein;
5. should corporate transformation of a licensee or a capital improvement transaction is authorized, where this does not lead to termination of the licence.
(3) The Commission shall inform the licensee in writing of the initiation of a proceeding for modification and/or supplementation of the licence under Paragraph (2). Within fourteen days, the licensee may submit a written opinion regarding the grounds for the modification and/or supplementation of the licence.
(4) The Commission shall modify and/or amend the licence after expiry of the time limit referred to in Paragraph (3).
(5) The licensee may request modification and/or supplementation of the licence in respect of the utilized primary energy sources and/or the technology of energy conversion.
(6) The holder of a licence under Article 39 (3) herein, issued after a tendering procedure, may request modification and/or supplementation of the said licence before commencement of the licensed activity solely by reason of occurrence of circumstances beyond the control of the holder.
Article 52. (1) The Commission shall authorize the corporate transformation of a licensee through merger by acquisition, merger by the formation of a new company, division by the formation of new companies, division by acquisition, and division by the formation of a wholly owned commercial corporation or through change of the legal form of business organization if the person that will perform the licensed activity after the corporate transformation is responsive to the eligibility requirements for issuance of a licence for the activity.
(2) In the cases under Paragraph (1), the Commission shall modify or terminate the existing licence and/or shall issue a new licence depending on the particular case within one month after submission of the application. The termination, modification or issuance of a licence shall become effective as from the date of recording of the corporate transformation in the commercial register.
(3) (New, SG No. 74/2006, effective as of the date of entry into force of the Treaty concerning the Accession of the Republic of Bulgaria to the European Union) The termination, modification or issuance of a licence in the Republic of Bulgaria upon any transformation of a legal person, having a licence issued under Article 40, Paragraph 6, shall become effective on the date when said transformation of the legal person under the law of country, where it is registered, becomes effective.
Article 53. (1) Capital improvement transactions in any construction works in progress or in any property whereby the licensed activity is performed may be effected solely in their entirety, subject to advance authorization by the Commission, including when the licensee is adjudicated bankrupt.
(2) In the cases under Paragraph (1), where the licence is issued for generation of electricity and/or heat and the activity is performed by means of generating capacities (units) which can technologically be operated independently of one other, an individual unit may be the subject of a transaction. In such a case, the original licence shall be modified or supplemented.
(3) Where termination or modification of a licence under Paragraph (1) or (2) could lead to disturbance of the security of supply of electricity, heat or natural gas, the Commission shall authorize conduct of the capital improvement transaction provided the transferee under the said transaction has submitted an application and is responsive to the conditions for issuance of a licence for the respective activity. The licence issued to the transferee shall become effective as from the date of the transfer transaction.
(4) Where termination or modification of a licence under Paragraph (1) or (2) does not lead to disturbance of the security of supply, the Commission may authorize conduct of the capital improvement transaction regardless of whether the transferee has submitted an application for issuance of a licence.
(5) The Commission shall also authorize conduct of the capital improvement transaction in the cases of pledge or mortgage on the property whereby the licensed activity is performed.
(6) No authorization shall be required in cases of replacement or modernization, or where such disposition does not lead to change of the terms under which the licensed activity is performed.
(7) Any transactions concluded in violation of the foregoing paragraphs shall be declared null and void by the court on a petition by the Commission, the prosecutor, or any interested party.
(8) The Commission shall consider the requests covered under Paragraphs (1) to (4) within three months after submission of the application, and the requests referred to in Paragraph (5) within one month.
Article 54. (1) No authorization under Article 53 herein shall be required upon privatization of a self-contained part of an energy company.
(2) The Commission shall issue a licence to the transferee in a privatization transaction referred to in Paragraph (1) if the said transferee has requested issuance of a licence and is responsive to requirements for issuance of such a licence.
Article 55. (1) A licence shall be terminated by a decision of the Commission:
1. at the request of the licensee, including upon transfer of the property whereby the licensed activity is performed, under the terms established by Article 53 herein;
2. in the event of a total loss of the energy work whereby the licensee performs the activity thereof;
3. upon corporate transformation of the licensee, where the said transformation leads to dissolution of the legal person which is the holder of the licence;
4. entry into effect of a judgment of court adjudicating the licensee bankrupt or of a judgment on cessation of operation owing to the placing of the licensee in liquidation beside the cases under Article 61 herein.
(2) (Amended, SG No. 74/2006) The Commission may, upon written notification, terminate the licence, should the licensee fail to exercise the licensed activity for a period exceeding one year.
(3) A licence shall be terminated upon expiry of the term of validity thereof, except in the cases under Article 56 herein.
(4) The decision to terminate a licence shall be a precondition for consideration by the competent court of a petition for recording of liquidators upon cessation of the operation of the legal person which is the holder of the licence.
(5) In cases of termination of the licence under Item 1 of Paragraph (1) and Paragraph (2) under terms specified in the ordinance referred to in Article 60 herein, the Commission shall have the right to order the licensee to transfer to a third party the property whereby the licensed activity is performed in its entirety or to create a right of use of the said property, should the transferee in the said transaction is a licensee or has submitted an application and is responsive to the requirements for issuance of a licence for the respective activity. In case the licensee fails to transfer the ownership or to create a real right of use within one month after termination of the licence, the provisions of Article 56 (4) to (11) shall apply accordingly.
Article 56. (1) Not later than one year before expiry of the term of validity of the licence, the licensee shall be obligated:
1. to submit an application for extension of the said term, or
2. to notify the Commission that it will not perform the licensed activity after expiry of the said term.
(2) Where, after expiry of the term of validity of a licence, the energy work whereby the licensed activity was performed is subject to final decommissioning for technical reasons, the Commission shall extend the term of validity of the licence until the final decommissioning of the said energy work.
(3) In the case under Item 2 of Paragraph (1), or should the Commission refuse to extend the term of validity of the licence if cessation of the licensed activity could lead to disturbance of the security of supply of electricity, heat or natural gas to consumers, or a risk to national security and public order could arise, the licensee shall be obligated to transfer the ownership thereof to a third party or to create a right of use of the property whereby the licensed activity is performed solely in its entirety, according to the procedure established by Article 53 (1) and (3) herein.
(4) Where the licensee fails to fulfil the obligations thereof under Paragraph (3) not later than 60 days prior to expiry of the term of validity of the licence or the Commission refuses to authorize the capital improvement transaction, the Commission shall appoint a special commercial administrator who:
1. shall accept, against a checklist, the works whereby the licensed activity was performed, where the said facilities are transferred thereto for management, effective the first day following the expiry of the term of validity of the licence, and
2. shall continue performance of the licensed activity for the account of the licensee until transfer of ownership of the energy works and selection of a new licensee.
(5) The special commercial administrator shall be selected by mutual consent of the licensee and the Commission not later than 30 days prior to expiry of the term of validity of the licence. Should no agreement be reached, the special commercial administrator shall be designated by the Commission.
(6) The special commercial administrator shall have the right to perform solely activities and transactions directly related to the licensed activity and shall have no right to alienate or encumber any corporeal immovables, as well as to perform any activities determined by the Commission by the act of appointment.
(7) The name and address of the special commercial administrator as appointed shall be recorded in the commercial register at the request of the Chairperson of the Commission and shall be promulgated in the State Gazette.
(8) After recording of the special commercial administrator in the commercial register, the management bodies of the licensee may perform solely activities related to the preparation and conclusion of a capital improvement transaction under Paragraph (3).
(9) In cases of appeal against a refusal by the Commission, the licensee shall continue to perform the activity until the final judgment of the court on the appeal.
(10) The circumstances under Paragraph (3) shall be ascertained in coordination with the relevant competent state bodies.
(11) Eligibility for appointment as a special commercial administrator shall be limited to persons responsive to the following requirements:
1. higher education and professional experience in management of energy companies;
2. no conviction, after reaching majority, of a premeditated offence at public law, unless rehabilitated;
3. no relations with the licensee give grounds for reasonable doubt as to the impartiality of the said persons.
Article 57. (1) In cases where a licensee requests termination of the licence prior to expiry of the term of validity thereof and if cessation of the licensed activity could lead to disturbance of the security of supply of electricity, heat or natural gas to consumers, or a risk to national security or public order could arise, the said licence shall be obligated to continue to perform the licensed activity until issuance of a new license to another person according to the procedure established by Article 56 (3) herein.
(2) If no new licensee is selected according to the procedure established by Paragraph (1) during the period of the notice whereby the licensee has requested termination of the licence, the procedure established by Article 56 (4), (5), (6), (7), (9) and (11) herein shall apply, mutatis mutandis.
Article 58. (1) Upon submission of an application requesting termination of a licence issued after a tendering procedure, the Commission shall evaluate the request in view of the needs of the national overall forecast energy balance and the secure and reliable supply of energy and natural gas to consumers.
(2) The holder of a licence selected by tendering procedure may submit a request for termination of the said licence in case that the said holder has transferred the construction work in progress to a third party, under the terms established by Article 53 (1) herein.
Article 59. (1) After a written warning fixing a time limit, the Commission shall withdraw the licence:
1. where the licensee fails to perform or violates the obligations thereof under Chapters Six and Seven herein;
2. where the licensee fails to perform or violates the obligations there under the licence as issued;
3. where the licensee fails to perform within the prescribed time limit or breaches any prescriptions of the control authorities of the Commission or coercive administrative measures imposed by the Commission;
4. where the licensee has submitted untrue information which has served as grounds for issuance of the licence.
(2) The licence shall furthermore be withdrawn where a licence for operation of a nuclear facility, issued under the Safe Use of Nuclear Power Act, has been withdrawn from the licensee by an effective administrative act.
(3) (Amended, SG No. 74/2006) The Commission may withdraw a licence for distribution of natural gas, issued after a tendering procedure, if the licensee fails to construct the relevant natural gas distribution network indicated in the tender thereof within the time limit fixed in the licence. In such a case, a new tendering procedure shall be held according to the procedure established by this Act for the area vacated.
(4) The decision to withdraw a licence shall fix a time period during which the person may not apply for issuance of a new licence for the same activity. The said time period may not be shorter than two years.
(5) Withdrawal of a licence shall not override the enforcement of administrative or criminal liability for a violation committed, if the preconditions for this exist.
(6) By a decision to withdraw a licence, the Commission shall appoints a special administrator vested with powers according to Article 56 (4) until the final judgment of the Supreme Administrative Court, in the event of appeal.
Article 60. The terms and procedure for the issuance, modification, supplementation, termination and withdrawal of licences, for the issuance of authorizations under this Chapter, for approval of the general conditions of contracts under this Act, for supply of electricity, heat and natural gas to consumers, as well as for amicable settlement of disputes under Article 22 herein, shall be established by an ordinance adopted by the Council of Ministers on a motion by the Commission.
Article 61. The relations associated with the insolvency and bankruptcy of an energy company which has obtained a licence for transmission of electricity, heat and natural gas, for distribution of electricity or natural gas, as well as the persons which have obtained licences for public delivery or public supply of electricity or natural gas using works on the list of energy works of strategic national importance, as approved by the Council of Ministers, shall be regulated by a special law.

Chapter Five
REAL RIGHTS
Section I
Building Right. Condemnation
Article 62. (Amended, SG No. 74/2006) (1) Where site and/or linear energy works, as well as ground or underground hydro-technological electricity generation facilities or parts thereof are constructed or expanded on a corporeal immovable constituting private state property or private municipal ownership, the competent state or municipal authorities shall create an onerous building right to the land tract without auction or tendering procedure in favour of the person to operate the energy site.
(2) The building right value shall be determined by an independent licensed evaluator, selected by the competent state or municipal authority according to the Public Procurement Act procedure. The value determined by the licensed evaluator shall be taken as the lowest market price that may be paid for the right to build on the specific property.
(3) Where site and/or energy works, as well as ground and underground hydro-technological electricity generation facilities or parts thereof have to be constructed or expanded on a corporeal immovable constituting private property, the energy company must acquire in advance and onerously a right or ownership or a building right to the land tract required for construction of the work.
Article 63. (1) (Amended, SG No. 74/2006) In case of refusal or of impossibility to implement the activities under Article 62 (3) herein for reasons beyond the control of the energy company, the corporeal immovable shall be condemned.
(2) Any condemnation referred to in Paragraph (1) shall be effected under the terms and according to the procedure established by the State Property Act.
(3) The energy company may use the corporeal immovable solely for the purposes of the condemnation.

Section II
Servitudes
Article 64. (1) (Amended and supplemented, SG No. 74/2006) Upon expansion of existing overhead and underground electric power lines of ground and underground hydro-technological electricity generation facilities, heating mains, oil and gas pipelines, and oil-product lines and upon construction of new such lines and mains, servitudes shall arise in favour of the energy companies. Servitudes under this Act shall be reflected in the cadastre and shall be recorded under the terms and according to the procedure established by the Cadastre and Property Register Act.
(2) There shall be the following servitudes under this Act:
1. a rights of passage of persons and machinery in favour of the energy company;
2. (amended and supplemented, SG No. 74/2006) a rights of laying overhead and underground electric power lines of ground and underground hydro-technological electricity generation facilities, heating mains, oil and gas pipelines, and oil-product pipelines in favour of the energy company;
3. limitation on use of lots adjoining the energy works.
(3) Upon exercise of servitudes:
1. the energy company shall acquire the right:
(a) (amended and supplemented, SG No. 74/2006) to lay overhead and underground electric power lines, heating mains, gas and oil pipelines, and oil product pipelines in favour of the energy company;
(b) for representatives of the energy company, to enter into and pass through the servient estates and to perform activities therein in connection with the operation of energy works, including a right of passage of machinery through the servient estates in connection with the construction and maintenance of overhead and underground lines;
2. the following shall be impermissible in the servient estates:
(a) building development or plantation of perennial plants in the servitude strip, designated in the ordinance referred to in Paragraph (9);
(b) laying of line of other physical-infrastructure networks, except in the cases when this is permissible under a statutory instrument, complying with the relevant technical requirements;
3. the change in the ownership of the corporeal immovable shall not terminate the effect of the servitudes in respect of the dominant estate and in respect of the servient estate;
4. servitudes shall be inseparable rights; they may be exercised entirely in favour of each part of the dominant estate and shall entirely encumber each part of the servient estate, even where the two estates are separated;
5. a servitude may be used solely for the needs of the dominant estate;
6. the owner of the servient estate shall have no right to relocate the servitude.
(4) Servitudes under Paragraph (2) shall arise when:
1. there is an effective detailed plan, whereby the location of the respective corporeal immovables is determined, and
2. a lump-sum compensation has been paid to the owner of the immovable whereon the servitude has arisen.
(5) The holder of the servitude shall pay a lump-sum compensation to the owner of the land tract.
(6) (Supplemented, SG No. 74/2006) The amount of compensations under this Chapter shall be determined according to the procedure established by Articles 210 and 211 of the Spatial Development Act or by mutual consent by both parties with an evaluation by a licensed evaluator.
(7) The energy company shall exercise the servitude right conforming to the technical requirements established by the ordinance referred to in Paragraph (9).
(8) In case the servitude zone falls within a corporeal immovable in respect of which a building right has been created in favour of the energy company, the servitude on the said corporeal immovable shall be stipulated in the act creating a building right.
(9) The size, location and special exercise regime of servitudes shall be specific to the different types of energy works and shall be determined according to a procedure and in a manner provided for in an ordinance of the Minister of Economy and Energy, the Minister of Agriculture and Forestry, and the Minister of Regional Development and Public Works.
Article 65. (1) The amount of the compensation referred to in Article 64 (5) herein shall be determined applying the following criteria:
1. the surface area of others' lots incorporated within the servitude boundaries;
2. the types of limitations on use;
3. the period of the limitation;
4. the assessed fair market value of the corporeal immovable or of the part thereof which falls within the servitude boundaries.
(2) Notwithstanding any compensation referred to in Paragraph (1), the energy company shall be obligated to repair all damages caused to the corporeal immovable or to pay a respective pecuniary compensation.
Article 66. The type and location of the energy works and of the surface areas of servient estates incorporated within the servitude boundaries under this Act shall determined in master plans and detailed plans.
Article 67. (1) Any representatives of the energy companies and any officials who exercise control under this Act may enter into and pass through others' corporeal immovables and perform activities therein in connection with the operation of the energy works or for control over the said facilities.
(2) (Amended and supplemented, SG No. 74/2006) Energy companies shall have the right to use gratuitously bridges, roads, streets, sidewalks and other corporeal immovables constituting public property for the laying, connection, passage and maintenance of overhead and underground electric power lines, heating mains, gas pipelines, water mains for power generation purposes, oil and oil product pipelines, while ensuring technical safety and taking measures for prevention of detriment.
(3) Energy companies shall use gratuitously parts of buildings for installation of metering devices and other equipment related to delivery of electricity, heat and natural gas.
(4) Owners of the corporeal immovables covered under Paragraphs (1) to (3) shall be entitled to compensation for any detriment sustained.
Article 68. (1) Where an owner, user or lessee of the corporeal immovable performs unauthorized building development, enclosure, planting or any other violation of the servitude exercise regime, the energy company shall have the right to approach the competent authorities with a request for removal of the illegal construction works for the account of the said owner, user or lessee, unless the said owner, user or lessee removes the said works within a time limit set by the energy company.
(2) In the cases under Paragraph (1), the energy company shall not owe any compensation for the damage sustained.

Chapter Six
PUBLIC OBLIGATIONS
Article 69. Energy companies shall be obligated to perform the operation thereof in the interest of the public and of the individual consumers and in accordance with the requirements established by this Act and the other statutory instruments, ensuring the security of supply, the non-interruption and the quality of electricity, heat and natural gas, the efficient utilization of fuels and energy, the protection of the environment, the life, health and property of citizens.
Article 70. (1) The Minister of Economy and Energy may impose additional public service obligations on energy companies.
(2) Additional obligations referred to in Paragraph (1) shall be imposed, where related to:
1. non-interruption of deliveries of electricity, heat and natural gas, and
2. protection of the environment: in consultation with the Minister of Environment and Water.
(3) The additional obligations referred to in Paragraph (1) shall be imposed by an order stating:
1. the person whereon the obligation is imposed;
2. the content of the obligation;
3. the time limit and terms under which the obligation must be performed;
4. other terms and conditions.
(4) Any supplementary costs incurred by the energy companies under Paragraph (3) shall be allowed as expenses under Article 35 herein.
Article 71. (Supplemented, SG No. 74/2006, on the date of entry into the Commercial Registry the decision to transform National Electric Company EAD, but not later than the date of entry into force of the Treaty concerning the Accession of the Republic of Bulgaria to the European Union) The energy companies managing the electric power grid, carrying out transmission of electricity, heat and natural gas or for distribution of electricity and natural gas, which provide a universal service and which have a dominant position on the market within the meaning given by the Protection of Competition Act, shall be subject to the provisions of the said Act insofar as this does not prevent them, de facto or de jure, from performing the obligations assigned thereto.

Chapter Seven
SCHEDULED OUTAGE REGIME, TEMPORARY INTERRUPTION OR LIMITATION
Article 72. (1) A scheduled outage regime for the supply of electricity, heat or natural gas may be introduced whenever the said supply has to be limited or interrupted for a duration exceeding 48 hours within the entire national territory or any part thereof as a result of:
1. force majeure;
2. occurrence, or for prevention, of breakdowns of facilities for generation and transmission of electricity, heat or natural gas and for distribution of electricity and natural gas;
3. a sustained shortage of power generation facilities or energy resources;
4. measures ordered by state bodies regarding an alert status or in case of hostilities;
5. terrorist acts.
(2) The Minister of Economy and Energy or a Deputy Minister empowered thereby shall be the authority competent to make decisions on introduction of a scheduled outage regime within the national territory.
(3) The mayors shall designate a scheduled outage regime for heat and natural gas within the territory of the municipality after consultation with the Minister of Economy and Energy, in accordance with the ordinance referred to in Article 74 (1) herein.
(4) The introduction of a scheduled outage regime or of the restrictive conditions under Paragraphs (1) to (3) shall be announced by the Minister of Economy and Energy through the mass communication media.
Article 73. (1) The operators of the electric power grid, of the heat transmission network, of the natural gas transmission network, or the relevant distribution network operator may order a suspension or limitation of the generation or supply of electricity, heat or natural gas without prior notification of producers and consumers:
1. upon occurrence, or for prevention, of breakdowns;
2. where human health or life is endangered;
3. where the integrity of the electric power grid, the heat transmission system or the natural gas transmission system is endangered;
4. in case the system, respectively the network or the consumers, risk sustaining substantial physical damage;
5. in case of risk of excessive environmental pollution, on a motion by the competent authorities within the meaning given by Article 10 (1) of the Environmental Protection Act ;
6. upon limitation of deliveries of natural gas for reasons beyond the control of the transmission company.
(2) The operators covered under Paragraph (1) shall be obligated to notify in advance producers and consumers of the time and duration of the interruption or limitation upon performance of repair works, operating switchovers, commissioning of new facilities and other such schedulable activities.
(3) The duration of an interruption or limitation under Paragraph (1) may not exceed 48 hours.
Article 74. (1) The procedure for introduction of a scheduled outage regime, temporary interruption or limitation of generation or supply of electricity, heat and natural gas shall be established by an ordinance of the Minister of Economy and Energy.
(2) Energy companies shall not be liable to pay compensation for any damages inflicted as a result of a scheduled outage regime, temporary interruption or limitation of generation or supply of electricity, heat or natural gas with the exception of the cases where the breakdowns or sustained shortage has occurred through the fault of the said companies.

Chapter Eight
CONTROL IN THE ENERGY SECTOR
Article 75. (1) (Amended, SG No. 74/2006) The Minister of Economy and Energy shall exercise preventive, current and follow-up control over:
1. (amended, SG No. 74/2006) the technical condition and the operation of the energy works;
2. application of the procedure and technical terms for heat supply, disconnection of heat delivery and application of share allocation of heat;
3. fulfilment of the obligation to build and store stocks of fuels required for secure and uninterrupted energy supply;
4. the readiness of the energy works to operate in emergency and in wartime;
5. (amended, SG No. 74/2006) fulfilment of the obligations under this Act to provide information to the Ministry of Economy and Energy.
(2) The Commission shall exercise control over:
1. compliance with the terms of the licences as issued;
2. application of the prices referred to in Article 30 (1) herein;
3. (repealed, SG No. 74/2006);
Article 76. (1) The Commission shall control the conformity of the licensed activities performed with the conditions of the licences as issued.
(2) The Commission shall exercise preventive, current and follow-up control.
(3) The Commission shall exercise preventive control over the procedures for issuance of licences under this Act.
(4) The Commission shall exercise current control over the conformity of the performance of the licensed activity with the licence conditions, including:
1. compliance with the requirements for security of deliveries of electricity, heat and natural gas and for efficient use of energy and energy resources;
2. fulfilment of the obligations to provide access to the networks;
3. application of the prices endorsed by the Commission;
4. fulfilment or readiness to fulfil additional obligations for cessation of the licensed activity after expiry of the term of validity of the licence or upon termination of the said licence, as well as for decommissioning of energy works;
5. fulfilment of the obligations to insure the property whereby the licensed activity is performed or to fulfil the financial security obligations;
6. fulfilment of the obligations to provide information to the Commission;
7. fulfilment of the obligations to provide information to the relevant system operator;
8. checking the justifiability of complaints and alerts against energy companies, including breaches of contracts, non-fulfilment of obligations for connection of producers and consumers to the networks, or interruption of energy or natural gas supply;
9. other conditions specified in the licence.
(5) The Commission shall exercise follow-up control over the implementation of recommendations and prescriptions issued to licensees.
Article 77. (1) In exercise of the control powers thereof, the Minister of Economy and Energy shall:
1. conduct inspections through persons authorized thereby;
2. notify the specialized control authorities with a view to taking measures within the scope of the competence of the said authorities;
3. impose coercive administrative measures and administrative sanctions provided for by this Act.
(2) In exercise of the control powers thereof, the Commission shall:
1. conduct inspections through persons authorized thereby;
2. notify the specialized control authorities with a view to taking measures within the scope of the competence of the said authorities;
3. suspend the operation, modify or withdraw a licence as issued;
4. impose coercive administrative measures and administrative sanctions provided for by this Act.
(3) The Minister of Economy and Energy or the Commission, as the case may be, shall have the right to demand from persons inspected to provide information regarding the operation thereof, the documents required in connection with the exercise of control and, where necessary, to approach the specialized control authorities for assistance.
Article 78. (1) The persons who conduct inspections and who draw up statements ascertaining violations committed shall be designated by an order of the Minister of Economy and Energy or by the Chairperson of the Commission depending on the competence vested therein under this Act.
(2) The persons referred to in Paragraph (1), hereinafter referred to as the "control authorities," shall have the right:
1. to unimpeded access to the persons and works controlled thereby for inspection;
2. to demand from the relevant officials to produce the required data, information, explanations, operating and other information, including the performance or the commissioning of performance of expert assessments, measurements and tests in order to clarify the technical conditions and the service conditions of the work, including the licensed competence of the personnel, as well as any other information relevant to ensuring compliance with the conditions of the licence;
3. to conduct cross-checks and to demand from third parties to provide information and documents required for conduct of such cross-checks;
4. to make proposals for issuance of mandatory prescriptions;
5. to make proposals for imposition of coercive administrative measures and administrative sanctions.
(3) The person inspected shall be obligated to ensure all conditions required for the normal conduct of the inspection and to cooperate with the control authorities and, to this end:
1. provide a place for conduct of the inspection or present himself or herself at the building of the Ministry or of the Commission, as the case may be;
2. designate an employee thereof to liaise with and render assistance to the officials who conduct the inspection;
3. provide access to official premises;
4. produce all accounting, business and other documents required for establishment of facts and circumstances relevant to the scope of the inspection;
5. provide written explanations at the request of the control authority.
(4) The prescriptions issued by control authorities in exercise of the powers vested therein under this Act shall be mandatory.
Article 79. (1) The control authorities shall be obligated to safeguard any official, production and commercial secrets that have come to the knowledge thereof in the course of or in connection with the implementation of control activities.
(2) The control authorities shall perform the activity thereof independently or, where necessary, jointly with other specialized control authorities.
Article 80. (1) The control authorities shall draft a memorandum on the results of each inspection, attaching thereto the data, documents and explanations collected.
(2) Any such memorandum shall be signed by the drafter and the person inspected or, should the latter refuse to sign, by two witnesses of the refusal.
(3) On the basis of the results of the inspection, the control authorities may issue mandatory prescriptions to the persons inspected by the memorandum and/or draw up statements ascertaining administrative violations.
(4) The persons who are issued mandatory prescriptions shall notify the control authorities of the compliance with the said prescriptions within the time limit appointed thereto.
Article 81. The State and municipal bodies and the administrations thereof, as well as any persons obligated under the law, shall be obligated to cooperate with the control authorities bodies in the exercise of the powers vested therein.

Chapter Nine
ELECTRICITY INDUSTRY
Section I
Electric Power Grid
Article 82. (1) All electricity works within the national territory shall be connected and shall function with an integral electric power grid with a common mode of operation and uninterrupted process of electricity generation, conversion, transmission, distribution and consumption.
(2) The electric power grid shall comprise the electric power plants, the transmission network, the individual distribution networks, and the electric wiring systems of consumers.
(3) (Supplemented, SG No. 74/2006) The parallel operation of Bulgaria's electric power grid with other power grids and pools of grids shall be implemented in accordance with the effective international electricity industry instruments and in compliance with the technical standards and reliable and safe operation requirements.
Article 83. (1) The power grid shall be structured and operated according to standards provided for in:
1. an ordinance on the structure of electric fixtures and electric power lines, which shall regulate the technical standards for design and construction of electric fixtures and electric power lines;
2. an ordinance on the operation of electric power plants and networks, which shall regulate the terms and procedure for organization and operation of: electric power plants and networks, of power plants for generation of electricity and/or heat, of heat transmission networks, of the hydraulic engineering facilities of power plants and the mechanical parts thereof (and the management and operation of electric power plants and networks);
3. an ordinance on the operation of power equipment, which shall regulate the rules for maintenance of the serviceability and the rules for safe operation of the electric fixtures and facilities of consumers;
4. rules for operation of the electric power grid, which shall regulate the rights and obligations of the transmission company, the electric power grid operator, and the persons connected to the transmission network in connection with a planning of the development of the transmission network, the planning and management of the mode of operation of the electric power grid, the procedures for mandatory data exchange, the procedure for early warning and exchange of information, the development and implementation of a protection plan and a recovery plan for the electric power grid, terms and procedure for conduct of system wide tests and for provision of ancillary services;
5. (amended, SG No. 18/2004) rules for management of distribution networks, which regulate the rights and obligations of the distribution company, the distribution network operator and the persons connected to the relevant network in connection with a planning of the development of the network, planning and management of the mode of operation of the distribution network, the procedures for mandatory data exchange, the procedure for early warning and exchange of information, the development and implementation of a local protection plan and for provision of ancillary services;
6. rules for electricity metering, regulating the metering principles, the metering methods and sites, the terms and procedure for servicing of the said sites, as well as the building and maintenance of data bases of the readings of commercial metering devices.
(2) The ordinances referred to in Items 1 to 3 of Paragraph (1) shall be issued by the Minister of Economy and Energy. The rules referred to in Items 4 to 6 of Paragraph (1) shall be adopted by the Commission on a motion by the energy companies.
(3) The technical rules and standard specifications for design, construction and use of facilities and installations for electricity generation, conversion, transmission and distribution shall be established by an ordinance of the Minister of Regional Development and Public Works and the Minister of Economy and Energy.

Section II
Electricity Generation
Article 84. Electricity may be generated by energy companies licensed for generation according to the procedure established by this Act, except in the cases under Item 1 of Article 39 (4) herein.
Article 85. (1) (Supplemented, SG No. 74/2006) Electricity producers shall be obligated to maintain stocks of fuels, including local hard fuels, in quantities guaranteeing sustained and reliable generation.
(2) (Amended, SG No. 74/2006) The terms and procedure for the building, maintenance of stocks of fuel and control shall be established by an ordinance of the Minister of Economy and Energy.

Section III
Electricity Transmission and Electric Power Grid Management
(Title amended, SG No. 74/2006, effective on the date of entry into the Commercial Registry the decision to transform National Electric Company EAD, but not later than the date of entry into force of the Treaty concerning the
Accession of the Republic of Bulgaria to the European Union)
Article 86. (1) (Amended, SG No. 74/2006, effective on the date of entry into the Commercial Registry the decision to transform National Electric Company EAD, but not later than the date of entry into force of the Treaty concerning the Accession of the Republic of Bulgaria to the European Union) The transmission of electricity shall be implemented by a transmission company which owns the transmission network and which has been licensed for transmission of electricity.
(2) (New, SG No. 74/2006, effective on the date of entry into the Commercial Registry the decision to transform National Electric Company EAD, but not later than the date of entry into force of the Treaty concerning the Accession of the Republic of Bulgaria to the European Union) The licensee may assign, through an agreement, the transmission operation and maintenance only to the electric power grid operator, who has obtained an electric power grid management licence.
(3) (Renumbered from Paragraph 2, amended, SG No. 74/2006, effective on the date of entry into the Commercial Registry the decision to transform National Electric Company EAD, but not later than the date of entry into force of the Treaty concerning the Accession of the Republic of Bulgaria to the European Union) Electricity transmission and transformation shall be a universal service, managed by the electric power grid operator.
Article 87. (1) (New, SG No. 74/2006, effective on the date of entry into the Commercial Registry the decision to transform National Electric Company EAD, but not later than the date of entry into force of the Treaty concerning the Accession of the Republic of Bulgaria to the European Union) The transmission company shall ensure the expansion, reconstruction, and modernisation of the transmission network, in accordance with the long-term electric power industry development forecasts and plans.
(2) (Renumbered from Paragraph 1, amended, SG No. 74/2006, on the date of entry into the Commercial Registry the decision to transform National Electric Company EAD, but not later than the date of entry into force of the Treaty concerning the Accession of the Republic of Bulgaria to the European Union) The electric power grid operator shall ensure:
1. integrated management of the electric power grid and reliable functioning of the transmission network;
2. (amended, SG No. 74/2006, effective on the date of entry into the Commercial Registry the decision to transform National Electric Company EAD, but not later than the date of entry into force of the Treaty concerning the Accession of the Republic of Bulgaria to the European Union) transit transmission of electricity through the transmission network;
3. maintenance of the facilities and installations of the transmission network in accordance with technical requirements and with safe operation requirements;
4. (repealed, SG No. 74/2006, effective on the date of entry into the Commercial Registry the decision to transform National Electric Company EAD, but not later than the date of entry into force of the Treaty concerning the Accession of the Republic of Bulgaria to the European Union) ;
5. maintenance and development of auxiliary networks.
(3) (Renumbered from Paragraph 2, amended, SG No. 74/2006, effective on the date of entry into the Commercial Registry the decision to transform National Electric Company EAD, but not later than the date of entry into force of the Treaty concerning the Accession of the Republic of Bulgaria to the European Union) For preparation of the national electric energy balance, the electric power grid operator shall:
1. elaborate short-term and long-term forecasts of changes in consumption of electricity in Bulgaria;
2. organize the conduct of assessments of the feasibility of expansion and modernization of the transmission network with a view to the commissioning of new generating capacities, decommissioning of existing generating capacities, connecting new consumers to the transmission network, the expected increase in the quantity of electricity transmitted, implementation of new technologies ensuring better quality and security of the services provided and efficiency of the operation; the said assessments shall be accompanied by a feasibility study and an environmental impact analysis;
3. prepare short-term, medium-term and long-term forecasts and plans for expansion and modernization of the transmission network and for development of auxiliary networks;
4. prepare shot-term and long-term plans for development of the electric power grid with a view to ensuring the electric energy balance;
5. (amended and supplemented, SG No. 74/2006, effective on the date of entry into the Commercial Registry the decision to transform National Electric Company EAD, but not later than the date of entry into force of the Treaty concerning the Accession of the Republic of Bulgaria to the European Union) on the basis of the assessments, forecasts and plans, prepare a draft national electric energy balance and a list of the sources, including new generating capacities and intersystem electric power lines, required to meet national demand, and submit the said draft to the Minister of Economy and Energy.

Section IV
Electricity Distribution
Article 88. (1) The distribution of electricity and the operation of distribution networks shall be implemented by distribution companies which own the distribution networks within a self-contained area, licensed for distribution of electricity within the relevant area.
(2) (Amended, SG No. 74/2006) Electricity distribution shall be a universal service.
Article 89. The distribution company shall ensure for the area serviced by the distribution network:
1. distribution of the electricity entering the distribution network;
2. non-interruption of electricity supply and high quality of the electricity delivered;
3. management of the distribution network;
4. maintenance of the distribution network, the facilities and installations and the auxiliary networks in accordance with technical requirements;
5. expansion, redevelopment and modernization of the distribution network and auxiliary networks;
6. other services.
Article 90. The distribution company shall:
1. assess the prospects for economic development and changes in electricity consumption within the relevant area;
2. prepare short-term and long-term plans for development of the distribution network;
3. submit the results of the assessments and the plans as prepared under Items 1 and 2 to the transmission company.

Section V
Commercial Relationships. Parties to Electricity Transactions
Article 91. (1) Transactions in electricity may be concluded at prices regulated by the Commission, at prices freely negotiated between the parties, and on an organized electricity market.
(2) Transactions in electricity shall be effected in compliance with the provisions of this Act and the electricity trading rules (Market Rules) adopted by the Commission on a motion by the energy companies.
(3) (Amended, SG No. 74/2006) The rules referred to in Paragraph (2) shall establish the manner of transaction administration and of organization and operation of the balancing market for electricity, as well as the organisation of the balancing group types and the activities of balancing group coordinators.
(4)(New, SG No. 74/2006) The Commission, taking into account all results achieved from the electric power grid and the electricity market operation, as well as all procedures regulated in the electricity trading rules, after proposal by the energy companies, shall amend or repeal, and then accept new electricity trading rules, observing the equal-treatment and all-party interest balance principles.
Article 92. (Amended, SG No. 74/2006) Parties to electricity transactions shall be:
1. the public provider of electricity;
2. (repealed, SG No. 74/2006, effective 1.07.2007);
3. the electricity producers;
4. (amended, SG No. 74/2006) the consumers, including eligible consumers;
5. the transmission company;
6. the distribution companies;
7. the electricity traders;
8. (amended, SG No. 74/2006, on the date of entry into the Commercial Registry the decision to transform National Electric Company EAD, but not later than the date of entry into force of the Treaty concerning the Accession of the Republic of Bulgaria to the European Union) the electric power grid operator;
9. (new, SG No. 74/2006, effective 1.07.2007) the end supplier.
Article 93. (1) (Supplemented, SG No. 74/2006, repealed, SG No. 55/2007, effective 1.07.2007)
Article 93a. (New, SG No. 74/2006, effective 1.07.2007) (1) The public provider shall purchase electricity from producers, connected to the transmission network, on long-term availability and electricity purchase agreements, as well as electricity produced from renewable energy sources, from high-efficiency combined electricity and heat generation, and the quantity of electricity, defined under Article 4, Paragraph 2, Item 8.
(2) The public provider may purchase electricity, defined within the availability under Article 21, Paragraph 1, Item 17a, in order to provide electricity to end suppliers.
Article 94. (Repealed, SG No. 55/2007, effective 1.07.2007).
Article 94a. (New, SG No. 74/2006) (1) The end supplier shall ensure provision of electricity at a certain quality and reliability level to home consumers and companies having less than 50 employees and annual turnover of less than 19.5 mil. BGN, according to the rules under Article 21, Paragraph 1, Item 7a.
(2) Electricity supply under Paragraph 1 shall be an universal service under this Act, provided on the basis of equal-treatment.
(3) The end supplier shall purchase electricity produced using renewable energy sources and using high-efficiency combined electricity and heat generation from producers, connected to the distribution network.
Article 95. Eligible consumers shall be electricity consumers responsive to the eligibility requirements established in the rules referred to in Article 24 (2) herein, which shall have the right to choose the person wherefrom they purchase electricity.
Article 96. (Amended, SG No. 74/2006, effective 1.07.2007) Electricity traders shall be persons licensed for the operation thereof, responsive to the requirements for financial security of the electricity transactions concluded thereby as established in the rules under Article 24 (2) herein.
Article 96a. (New, SG No. 74/2006) Balancing group coordinator shall be a person, having licence issued for any activity under Article 39, Paragraph 1, Item 1, 2, 3, 5, 6, 7, 8, 10 or 11, meeting financial guarantee requirements for any transactions executed by this person, the requirements set forth in the rules under Article 91, Paragraph 1, and registered by the electric power grid operator.

Section VI
Transactions at Regulated Prices
Article 97. (1) Transactions in electricity at prices regulated Commission shall be concluded between:
1. (repealed, SG No. 74/2006, effective 1.07.2007);
2. (repealed, SG No. 74/2006, effective 1.07.2007);
3. (repealed, SG No. 74/2006, effective 1.07.2007);
4. (repealed, SG No. 74/2006, effective 1.07.2007);
5. (amended, SG No. 18/2004, repealed, SG No. 74/2006, effective 1.07.2007);
6. (repealed, SG No. 74/2006, effective 1.07.2007) ;
7. (amended, SG No. 74/2006) the producers and the transmission company, the public provider and the distribution companies, respectively, for the electricity needed to compensate the technological losses of transmission or distribution, respectively.
8. (new, SG No. 74/2006, effective 1.07.2007) the producers and the end suppliers, or the public provider for the electricity defined by the Commission within the availability under Article 21, Paragraph 1, Item 17a;
9. (new, SG No. 74/2006, effective 1.07.2007) the public provider and the end suppliers for the electricity defined by the Commission within the availability under Article 21, Paragraph 1, Item 17a;
10. (new, SG No. 74/2006, effective 1.07.2007) end suppliers, home consumers, and the companies having less than 50 employees and less than 19.5 mil. BGN annual turnover, who have not exercised their right to select their electricity provider.
(2) (Amended, SG No. 74/2006, effective on the date of entry into the Commercial Registry the decision to transform National Electric Company EAD, but not later than the date of entry into force of the Treaty concerning the Accession of the Republic of Bulgaria to the European Union, repealed, SG No. 55/2007, effective 1.07.2007)
(3) (Repealed, SG No. 55/2007, effective 1.07.2007).
(4) (New, SG No. 74/2006) The electric power grid operator shall execute transactions with the neighbouring system operators to mutually compensate the transboundary electricity streams.
Article 98. (Repealed, SG No. 55/2007, effective 1.07.2007).
Article 98a. (New, SG No. 74/2006, effective 1.07.2007) (1) The end supplier shall sell electricity under publicly known general conditions.
(2) These general conditions shall include:
1. information, provided by the supplier;
2. the agreement term;
3. the supply termination or suspension terms;
4. the energy company liability upon failure to meet the general terms.
(3) The end electricity supplier shall publish its general conditions in at least one national and one local daily publication.
(4) The general conditions become effective for all consumers, purchasing electricity from the end supplier, without the need of express written acceptance.
(5) Within 30 days after the general conditions become effective, consumers, who do not agree with them, shall have the right to submit to their respective end electricity supplier a request proposing special conditions. The special conditions, accepted by the end electricity supplier, which differ from the published general conditions, shall be reflected in written annexes.
Article 98b. (New, SG No. 74/2006, effective 1.07.2007) (1) (Amended, SG No.55/2007, effective 1.07.2007) The end electricity supplier consumers shall use the distribution networks that they are connected to, under publicly known general conditions.
(2) These general conditions shall include:
1. information, supplied by the distribution company;
2. the supply termination or suspension terms;
3. the supply quality and reliability conditions;
4. the energy company's liability upon any unregulated suspension or low-quality supply.
(3) The distribution company shall publish its general conditions in at least one national and one local daily publication.
(4) The general conditions become effective for all consumers, purchasing electricity from the end supplier, without the need of express written acceptance.
Article 98c. (New, SG No. 55/2007, effective 1.07.2007) (1) The relationships between the end supplier and the distribution company in connection with the electricity supply for the consumers connected to the distribution networks shall be regulated by the rules for trade in electricity.
(2) The relationships under Articles 98a and 98b between the home consumers and the companies with less than 50 employees and an annual turnover of less than 19.5 mil. BGN, on the one hand, and the end supplier and the distribution company, on the other hand, shall be regulated by a general contract in accordance with the rules for trade in electricity.
Article 99. (Amended, SG No. 74/2006, effective on the date of entry into the Commercial Registry the decision to transform National Electric Company EAD, but not later than the date of entry into force of the Treaty concerning the Accession of the Republic of Bulgaria to the European Union) (1) For the purposes of balancing electricity production and demand, the electric power grid operator shall organize a balancing market for electricity in accordance with the rules referred to in Article 91 (2) herein.
(2) The electric power grid operator shall be party to all balancing transactions in electricity.
(3) The electric power grid operator shall execute balancing transactions in electricity with domestic or foreign suppliers to balance the electric power grid.
(4) The electric power grid operator shall execute transactions with balancing group coordinators to settle their imbalances.
(5) The electric power grid operator shall settle all transactions and mutual obligations between the balancing energy market participants in accordance with the rules under Article 91, Paragraph 2.

Section VII
Transactions at Freely Negotiated Prices
Article 100. (1) Electricity producers, electricity traders and eligible consumers may conclude between them transactions in electricity at freely negotiated prices.
(2) (Repealed, SG No. 74/2006, effective 1.07.2007) .
(3) (Repealed, SG No. 74/2006, effective 1.07.2007) .
(4) (New, SG No. 74/2006, effective 1.07.2007) The public electricity provider shall sell any electricity purchased under Article 93a at freely negotiated prices. In this case, the public provider shall have the right to claim reimbursement for its costs before the Commission under Article 34 and Article 35.
Article 101. (1) For an identical period of time fixed in the rules referred to in Article 91 (2) herein, eligible consumers may conclude transactions at freely negotiated prices and/or prices regulated by the Commission in the cases provided for in the said rules.
(2) (Amended, SG No. 74/2006, effective on the date of entry into the Commercial Registry the decision to transform National Electric Company EAD, but not later than the date of entry into force of the Treaty concerning the Accession of the Republic of Bulgaria to the European Union) The transmission company shall receive validated data on the metered quantities of electricity by the commercial metering device owners under the procedures and within the timeframes regulated in the rules under Article 83, Paragraph 1, Item 6 and Article 91, Paragraph 2.
Article 102. (Amended, SG No. 74/2006) Electricity producers, traders, the public provider, the public suppliers, the end suppliers, and the eligible consumers may conclude electricity transactions with resident persons of a European Union member country, or persons registered in a country, with which the Republic of Bulgaria has an agreement under an international act for mutual application of the respective European Communities law, when:
1. electricity producers, traders, the public provider, the public suppliers, the end suppliers and the eligible consumers are granted the right to free trade in electricity according to the legislation of the other State, and
2. on conditions of reciprocity, the legislation of the other State provide for an opportunity for free trade in electricity for eligible consumers of the said State.
3. provided that all home consumers and companies having less than 50 employees and less than 19.5 mil. BGN annual turnover have been provided with the electricity they need at certain quality indicators and transparent and reasonable prices.
Article 103. (1) Transactions in the organized electricity market shall be concluded according to the electricity trading rules referred to in Article 91 (2) herein.
(2) An electricity market shall be organized by a person licensed under Item 6 of Article 39 (1) herein, which shall:
1. organize the solicitation of offers for sale and purchase of electricity;
2. match the offers for sale and purchase for the relevant period until the demand is met;
3. inform the market participants and the electric power grid operator of the transactions on the organized market and take into consideration the limitations and changes dictated by limitations of the transmission capacity or by emergency situations in the networks;
4. set a price of the electricity traded for each period.
(3) (Repealed, SG No. 74/2006, effective 1.07.2007).

Section VIII
Transmission, Access, Ancillary Services and Cold Reserve Transactions
(Title amended, SG No. 74/2006, effective on the date of entry into the Commercial Registry the decision to transform National Electric Company EAD, but not later than the date of entry into force of the Treaty concerning the Accession of the Republic of Bulgaria to the European Union)
Article 104. (Amended, SG No. 74/2006, effective 1.07.2007) (1) Users of the relevant network, excluding the end supplier's consumers, shall execute a transaction governing their relationships, concerning their network usage and the transmission of any quantities of electricity fed to the network or consumed by the network, with the transmission and/or distribution company.
(2) Users of the relevant network, excluding the end supplier's consumers, shall execute a transaction governing their relationships, concerning network access, with the electric power grid operator and/or the distribution company.
(3) (Amended, SG No. 55/2007) The terms, the procedure, and the ratio for the payment of all prices under Paragraph 1 and Paragraph 2 by users of relevant networks shall be set forth in the rules for trade in electricity.
Article 105. (1) (Amended, SG No. 74/2006, effective on the date of entry into the Commercial Registry the decision to transform National Electric Company EAD, but not later than the date of entry into force of the Treaty concerning the Accession of the Republic of Bulgaria to the European Union) For the purpose of guaranteeing the reliable operation of the electric power grid, the electric power grid operator shall conclude ancillary-services and cold-reserve transactions under the terms and according to the procedure established by Article 83, Paragraph 1, Item 4 and Article 91, Paragraph 2 herein with suppliers within or outside the country.
(2) The cold reserve referred to in Paragraph (1) shall be procured through availability purchase transactions in quantities determined on the basis of the level of reliability of electricity supply under Item 4 of Article 4 (2) herein.
(3) The terms and procedure for purchase of the quantities of cold reserve referred to in Paragraph (2) shall be established by the rules referred to in Item 4 of Article 83 (1) herein.
(4) (New, SG No. 74/2006) The net electricity from an activated cold reserve shall be paid on terms, procedure, and price, set forth in the rules under Article 91, Paragraph 2.
Article 106. For the purpose of guaranteeing the reliable operation of the distribution networks, the distribution companies shall conclude ancillary-services transactions under the terms and according to the procedure established by Item 4 of Article 83 (1) herein.
Article 107. (Amended, SG No. 74/2006, SG No. 59/2007) The public provider, the electricity system operator, the public suppliers, the suppliers of last resort, the transmission company and the distribution companies shall have the option to move for the issuance of an enforcement order under Article 410 (1) of the Code of Civil Procedure for the receivables thereof for electricity provided or transmitted, as well as for the services rendered thereby under this Act, regardless of the amount of the said receivables.

Section IX
Operational Management
Article 108. (1) (Amended, SG No. 74/2006, effective on the date of entry into the Commercial Registry the decision to transform National Electric Company EAD, but not later than the date of entry into force of the Treaty concerning the Accession of the Republic of Bulgaria to the European Union) The centralized operational planning, coordination, and management of the electric power grid shall be performed by the electric power grid operator and by the operators of each of the distribution networks.
(2) (Amended, SG No. 74/2006, effective on the date of entry into the Commercial Registry the decision to transform National Electric Company EAD, but not later than the date of entry into force of the Treaty concerning the Accession of the Republic of Bulgaria to the European Union) The electric power grid operator shall be a separate legal person, having obtained an electric power grid management licence.
(3) The operational management and the ensuring of the reliable functioning of the distribution networks shall be performed by the operators of the respective networks.
(4) The operators of the distribution networks shall be specialized units of the distribution companies.
Article 109. (1) The electric power grid operator shall be obligated to ensure:
1. secure, safe and efficient functioning of the electric power grid;
2. maintenance of the balance between electricity generation and consumption;
3. implementation of the joint operation of the national electric power grid with the electric power grids of other countries in accordance with international treaties;
4. non-discriminatory access to electricity transmission in compliance with quality requirements;
5. secure and efficient functioning of the auxiliary networks.
(2) (Supplemented, SG No. 74/2006, effective on the date of entry into the Commercial Registry the decision to transform National Electric Company EAD, but not later than the date of entry into force of the Treaty concerning the Accession of the Republic of Bulgaria to the European Union) The directives of the electric power grid operator, related to the fulfilment of the obligations assigned thereto by this Act, shall be mandatory for the operators of the distribution networks and the electricity producers and the electricity consumers connected to the transmission network, and for the other companies of the vertically integrated company in the cases when the electric power grid operator is part of a vertically integrated company.
(3) (New, SG No. 74/2006, effective on the date of entry into the Commercial Registry the decision to transform National Electric Company EAD, but not later than the date of entry into force of the Treaty concerning the Accession of the Republic of Bulgaria to the European Union) The electric power grid operator shall set forth a coordinated schedule for planned downtimes of the generation capacities and the transmission network components based on maximum reliability criterion.
Article 109a. (New, SG No. 74/2006) (1) When the electric power grid operator is part of a vertically integrated company, its activities shall be independent in terms of legal organisational form and decision making from the vertically integrated company's other activities.
(2) In order to ensure the electric power grid operator's independence under Paragraph 1, any persons responsible for the management, including operational management of the electric power grid:
1. may not take part in the management of the other companies in the vertically integrated company, performing electricity generation, distribution, public delivery, public supply and trade;
2. shall take independent decisions in the course of their duties under this Act;
3. shall not allow discriminatory actions in the course of their duties under this Act;
(3) The electric power grid operator shall prepare a programme, setting forth measures to achieve the goal under Paragraph 1 and Paragraph 2, containing specific obligations for the employees for its implementation, and shall designate an employee, responsible for the control over this programme's implementation.
(4) The electric power grid operator shall prepare an annual report on all measures under Paragraph 3, which shall be presented to the Commission by the designated employee and shall be published in the bulletin under Article 15, Paragraph 1.
Article 110. (1) (Amended, SG No. 74/2006, effective on the date of entry into the Commercial Registry the decision to transform National Electric Company EAD, but not later than the date of entry into force of the Treaty concerning the Accession of the Republic of Bulgaria to the European Union) For the purposes of metering the quantities of electricity, the transmission company shall ensure:
1. technical and metrological support, development and modernization of the commercial metering devices for the quantity of electricity entering and leaving the transmission system;
2. (amended, SG No. 74/2006, effective on the date of entry into the Commercial Registry the decision to transform National Electric Company EAD, but not later than the date of entry into force of the Treaty concerning the Accession of the Republic of Bulgaria to the European Union) maintenance of data bases of the readings of the quantity of electricity referred to in Item 1, taken by commercial metering devices.
(2) (Amended, SG No. 74/2006, effective on the date of entry into the Commercial Registry the decision to transform National Electric Company EAD, but not later than the date of entry into force of the Treaty concerning the Accession of the Republic of Bulgaria to the European Union) Owners of commercial metering devices for quantities of electricity shall make available the readings of the said devices to the electric power grid operator, needed by the latter to carry out its activities under Article 111.
(3) (Amended, SG No. 74/2006, effective on the date of entry into the Commercial Registry the decision to transform National Electric Company EAD, but not later than the date of entry into force of the Treaty concerning the Accession of the Republic of Bulgaria to the European Union) The parties to electricity transactions shall have the right to receive information from the electric power grid operator's data base regarding the quantities of electricity traded by the said parties under the transactions.
Article 111. (1) (Amended, SG No. 74/2006, effective on the date of entry into the Commercial Registry the decision to transform National Electric Company EAD, but not later than the date of entry into force of the Treaty concerning the Accession of the Republic of Bulgaria to the European Union) The electric power grid operator shall administrate electricity transactions, executed on regulated and freely negotiated prices, and shall organise a balancing market for electricity according to the rules referred to in Article 91, Paragraph 2, and to this end shall:
1. (amended, SG No. 74/2006, effective on the date of entry into the Commercial Registry the decision to transform National Electric Company EAD, but not later than the date of entry into force of the Treaty concerning the Accession of the Republic of Bulgaria to the European Union) keep registers of the persons concluding transactions on the market for electricity;
2. keep registers of the contracts concluded between the persons referred to in Item 1;
3. receive, arrange on priority lists according to price and technological criteria, and activate proposals and orders for purchase and/or sale of balancing electricity;
4. apply a method for computation and fix balancing electricity prices for each settlement period;
5. prepare advance and final notices of the amounts due for balancing electricity from the participants for each settlement period;
6. control the financial security of balancing transactions in electricity and issue mandatory instructions to market participants in connection with this;
7. have the right, upon occurrence of circumstances endangering the secure operation of the electric power grid or of parts thereof, to suspend the performance of transactions or to change the quantities of electricity contracted there under, under terms and in a manner described in the rules referred to in Article 91 (2) herein;
8. provide information regarding forecast consumption of electricity, transmission system limitations, references about balancing electricity prices in prior periods, and other information as may be required by the participants.
(2) The costs incurred in connection with the performance of the functions covered under Paragraph (1) shall be allowed as economically justified costs under Item 2 of Article 31 herein.
Article 112. (1) (Amended, SG No. 74/2006, effective on the date of entry into the Commercial Registry the decision to transform National Electric Company EAD, but not later than the date of entry into force of the Treaty concerning the Accession of the Republic of Bulgaria to the European Union) The electric power grid operator shall regulate the distribution of the electric load of the electric power grid among the electric power plants under technical and economic criteria.
(2) (Amended, SG No. 74/2006, effective on the date of entry into the Commercial Registry the decision to transform National Electric Company EAD, but not later than the date of entry into force of the Treaty concerning the Accession of the Republic of Bulgaria to the European Union) In the process of distribution of the electric load, the electric power grid operator shall ensure compliance with the contracts as concluded which provide for mandatory purchase of part or all of the electricity generated under this Act.
(3) (New, SG No. 74/2006, effective on the date of entry into the Commercial Registry the decision to transform National Electric Company EAD, but not later than the date of entry into force of the Treaty concerning the Accession of the Republic of Bulgaria to the European Union) When dividing the throughput of any network components, the electric power grid operator shall observe technical and economic rules to ensure equal access and following its network safety and public availability of information obligations.
(4) (New, SG No. 74/2006, effective on the date of entry into the Commercial Registry the decision to transform National Electric Company EAD, but not later than the date of entry into force of the Treaty concerning the Accession of the Republic of Bulgaria to the European Union) The electric power grid operator shall have the right to sanction any violators of any network-user negotiated technical requirements for the reliable operation of the electric power grid.
Article 113. (1) Distribution network operators shall be obligated to ensure:
1. reliable, safe and efficient functioning of the relevant distribution network;
2. reliable and efficient functioning of the auxiliary networks;
3. non-discriminatory access to electricity transmission in compliance with quality requirements;
4. non-discriminatory treatment of the producers and of the consumers connected to the network.
(2) (Supplemented, SG No. 74/2006) The directives of the distribution network operator, related to the fulfilment of the obligations assigned thereto by this Act, shall be mandatory for the operational personnel on duty at energy works and the electricity producers directly connected to the relevant distribution network and for the other companies in the vertically integrated company, in the cases when the distribution company is part of a vertically integrated company.
Article 113a. (New, SG No. 74/2006) (1) When the distribution company is part of a vertically integrated company, its activities shall be independent in terms of legal organisational form and decision making from the other activities, which are not related to distribution.
(2) In order to ensure the distribution company's independence under Paragraph 1, any persons responsible for the management, including operational management of the distribution networks:
1. may not take part in the management of the other companies in the vertically integrated company, performing electricity generation, transmission, public delivery, public supply and trade;
2. shall take independent decisions in the course of their duties under this Act;
3. shall not allow discriminatory actions in the course of their duties under this Act;
(3) The distribution company shall prepare a programme, setting forth measures to achieve the goal under Paragraph 1 and Paragraph 2, containing specific obligations for the employees for its implementation. The distribution company shall designate an employee, responsible for the control over this programme's implementation.
(4) The distribution company shall prepare an annual report on all measures under Paragraph 3, which shall be presented to the Commission by the designated employee and shall be published in the bulletin under Article 15, Paragraph 1.
Article 114. (Amended, SG No. 74/2006) The electric power grid and the distribution network operators shall be obligated to respect the confidentiality of any information, constituting commercial secret, obtained in the course of or in connection with the fulfilment of the obligations thereof. The operators shall provide information on their activities on equal-treatment basis.
Article 115. The terms and procedure for performance of the activity of the electric power grid operator and the distribution network operators, as well as of the operational personnel on duty at electricity works and the electric fixtures of consumers, shall be established by an ordinance of the Minister of Energy and Energy Resources.

Section X
Connecting Producers and Consumers to Networks.
Access to Networks
Article 116. (1) The transmission company or distribution company, as the case may be, shall be obligated to connect any electricity producer located within the relevant area which:
1. has concluded a written contract with the transmission company or distribution company, as the case may be, at a connection price fixed according to the relevant ordinance referred to in Article 36 (3) herein;
2. has fulfilled the conditions for connection to the transmission or distribution network, and
3. has electric fixtures built within the boundaries of the said producer's own corporeal immovable or of a corporeal immovable where within the said producer enjoys a building right, and the said fixtures conform to technical standards and to safe operation requirements.
(2) The transmission company shall be obligated to connect facilities of the distribution companies under the terms established by Paragraph (1).
(3) The transmission company or the relevant distribution company shall be obligated to implement the expansion and redevelopment of the transmission network or distribution networks related to connection of electric power plants up to the interconnection point.
(4) The transmission company or distribution company, as the case may be, shall own the expansion or redevelopment implemented as referred to in Paragraph (3).
(5) In cases where the interconnection point is not located on the property boundaries of the electric fixtures of the producer, the high- voltage or medium-voltage electric power lines connecting the said fixtures shall be built by the transmission company or distribution company, as the case may be, which shall own the said lines.
(6) The electricity generated shall be metered by commercial metering devices owned by the transmission company or distribution company, as the case may be, with the requirements that the said devices must satisfy and the location site thereof being established by the rules referred to in Item 6 of Article 83 (1) herein.
(7) The terms and procedure for connection to the relevant network, for suspension of the connection or electricity supply, and the property boundaries between the electric facilities shall be established by an ordinance of the Minister of Energy and Energy Resources.
Article 117. (1) The transmission company or distribution company, as the case may be, shall be obligated to connect any facility of a electricity consumer located within the relevant area which:
1. has electric fixtures built within the boundaries of the said producer's own corporeal immovable or of the corporeal immovable of the said consumer which conform to the technical standards and to safe operation requirements;
2. has satisfied the conditions for connection to the transmission network or distribution network, as the case may be, and
3. has concluded a written contract with the transmission company or distribution company, as the case may be, at a connection price fixed according to the relevant ordinance referred to in Article 36 (3) herein.
(2) The distribution company may connect an electricity consumer located within the area of another distribution company, wherever that is technically and economically advisable and in the interest of consumers.
(3) The terms and procedure for connection to the transmission or distribution network and for conclusion of the contracts referred to in Paragraph (1) shall be regulated by the ordinance referred to in Article 116 (7) herein.
(4) The refusal of the energy company to perform a connection shall have to be reasoned.
(5) (Supplemented, SG No. 74/2006) High-voltage and medium-voltage electric fixtures and/or lines, which are used to supply electricity to a single consumer of electricity for business uses, shall be built for the account of the said consumer and shall be owned thereby.
(6) Low-voltage electric equipment, which are located within the corporeal immovables of consumers and are located outside the property boundaries of the facilities, shall be built for the account of the consumers and shall be owned thereby.
(7) (Amended, SG No. 74/2006) Electric fixture and equipment owners shall be obligated to provide the transmission company or distribution company, as the case may be, access through their own fixtures and facilities for the purposes of electricity conversion and transmission to other consumers. An access price shall be fixed according to a method approved by the Commission.
Article 118. (Amended, SG No. 74/2006, effective on the date of entry into the Commercial Registry the decision to transform National Electric Company EAD, but not later than the date of entry into force of the Treaty concerning the Accession of the Republic of Bulgaria to the European Union) (1) The electric power grid operator and the distribution company shall provide access on equal-treatment basis to the transmission and distribution networks for the respective network's users.
(2) The electric power grid operator or distribution company, as the case may be, may refuse access in case the provision of such access could result in deterioration of technical conditions and security of the networks or to deterioration of the conditions for supply of other consumers and users.
Article 119. (1) Producers may supply electricity to branches, enterprises and works thereof located within the national territory:
1. through the transmission network and/or the distribution networks (high-voltage, medium-voltage and low-voltage) to the relevant work, concluding to this end a contract for transmission with the transmission company and/or the distribution companies, or
2. through direct electric power lines, constructed for the account of the said producers up to the divisions or works thereof.
(2) (New, SG No. 74/2006, effective on the date of entry into the Commercial Registry the decision to transform National Electric Company EAD, but not later than the date of entry into force of the Treaty concerning the Accession of the Republic of Bulgaria to the European Union) Eligible consumers may be supplied through a direct electric power line.
(3) (Renumbered from Paragraph 2, SG No. 74/2006, effective on the date of entry into the Commercial Registry the decision to transform National Electric Company EAD, but not later than the date of entry into force of the Treaty concerning the Accession of the Republic of Bulgaria to the European Union) The transmission company and/or the distribution companies may refuse to sign contracts for transmission through the relevant networks in the cases under Item 1 of Paragraph (1) where:
1. the transmission capacity of the networks is insufficient, or
2. (repealed, SG No. 74/2006, effective on the date of entry into the Commercial Registry the decision to transform National Electric Company EAD, but not later than the date of entry into force of the Treaty concerning the Accession of the Republic of Bulgaria to the European Union)
3. no technical conditions exist for metering of the quantities of electricity consumed that originate from own generation separately from the quantities of electricity delivered from other sources.
(4) (Renumbered from Paragraph 3, SG No. 74/2006, effective on the date of entry into the Commercial Registry the decision to transform National Electric Company EAD, but not later than the date of entry into force of the Treaty concerning the Accession of the Republic of Bulgaria to the European Union) The manner of distribution of the electricity originating from own generation or delivered from other sources shall be established by the rules referred to in Article 91 (2) herein.
(5) (New, SG No. 74/2006, effective on the date of entry into the Commercial Registry the decision to transform National Electric Company EAD, but not later than the date of entry into force of the Treaty concerning the Accession of the Republic of Bulgaria to the European Union) The electric power grid operator and the distribution companies may refuse to execute an agreement on access to the relevant networks in the cases under Paragraph 1, Item 1, when the reliable operation of the electric power grid or the security of supply are being compromised.
Article 120. (1) The electricity used by consumers shall be metered by means of commercial metering devices owned by the transmission company or by the relevant distribution company, which shall be located next to or on the property boundary of the consumer.
(2) The property boundary of electric facilities and the site of commercial metering devices shall be determined according to the requirements established by the ordinance referred to in Article 116 (7) herein and by the rules referred to in Item 6 of Article 83 (1) herein.
(3) The transmission company or distribution company, as the case may be, shall determine the type, number and site of the metering devices and equipment and of the appurtenant controls and communication devices.
(4) Where endorsed tariffs allow consumers of a particular group to choose the method of metering of the quantity of electricity, the transmission company or distribution company, as the case may be, shall be obligated to install metering devices corresponding to the choice stated by the consumer in writing.
(5) The terms and procedure for replacement of a metering devices at the request of a consumer in the cases under Paragraph (4) shall be established by the rules referred to in Item 6 of Article 83 (1) herein.
Article 120a. (New, SG No. 74/2006) The electricity consumers shall not pay a fee for the commercial metering devices.
Article 121. (1) The transmission company or distribution company, as the case may be, shall specify to consumers mandatory technical requirements for installation of consumer's own stand-by power supply source according to the ordinance referred to in Item 1 of Article 83 (1) herein.
(2) Any consumer wishing to install an own stand-by power supply source shall be obligated to notify in writing the transmission company or distribution company, as the case may be, and to provide representatives of the said company with access to the stand-by source for the conduct of inspections.
(3) The transmission company or distribution company, as the case may be, shall have the right to suspend the electricity supply of the consumer if the said consumer fails to fulfil the obligations thereof under Paragraphs (1) and (2).

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