For Bulgarian energy sector the year 2016 passes under the sign of liberalization. Formal process began in 2007, when large industrial consumers were derived from the regulated market and started buying electricity after negotiations with manufacturers.
From the 1st of April, 2016, however, urban households can move towards free market. There are no obstacles in the development of so-called. "Standardized load profiles" (STP) and so even users without a electric meter with an hourly report can benefit from the free market.

How exactly will happen the complete opening of the electricity market in Bulgaria is not clear, because the public presentation of the road map and the model developed by the World Bank is still waiting for. One thing is certain - the process of full liberalization will end with the final disappearance of the regulated market. And then all domestic households will need their electricity supplier.

Experience in various European countries shows that the opening the energy market is going at a different speed. Although World Bank report is still not public, according to people familiar with it, the expectations in Bulgaria are the process to be completed within about five years. Until then, there will be a hybrid model – with households on the free market and on the regulated market.

The question is "What can motivate the release of residential subscribers to free market before it becomes mandatory?" From electricity supply companies are clear - better conditions and favorable price. Breakup of monopoly and creating a competitive environment for electricity traders reduce the price of electricity and quality of service. Thus, the customer is able alone to choose the dealer of electricity to negotiate the terms of the contract and billing, as well as additional services related to the service. The actual supply and demand, rather than administrative mechanisms determine market conditions and the development of flexible entrepreneurial approaches.

However, electricity supply companies know their customers well and based on their experience they can offer good conditions for households. So it is no surprise that companies take steps to convert from end suppliers to retailers of electricity on future free market.

EVN Bulgaria has requested and expects a license for  trading with energy by the Commission for Energy and Water Regulation.

Energo - Pro has developed a platform for signing contracts for online delivery, which offer products designed for customers that reflect the specifics of their consumption.

CEZ Bulgaria, which already has a license to trade electricity, is also under the development of packages for services that satisfy customers of CEZ Electro as a dealer. The company will try to attract customers not only from western Bulgaria, where it operates as a final supplier.

At this stage, electricity traders do not pay attention to the household because of their low and sometimes unpredictable consumption, and because of the high administrative costs for servicing them.

One of the explanations for the slow movement of households to the free market is that on the regulated market they still receive a lower price for electricity. Among main reasons is the cross-subsidization, which is available on the regulated market - the lowest price for households covered by higher prices for small business users who are still in this market segment. In addition, the price of the night tariff is not determined on market - it is lower than that to which electricity supply companies has bought in January by National Energy Company (NEC).

With its latest cost solution, however CEWR began eliminating cross-subsidizing and households will soon receive their incentive to enter the free market.

CEZ Bulgaria has commented that the liberalization process is progressing normally and there are no shocks. Complete clarity of the processes can have only after developing a model of free market, but by then electricity supply companies are already preparing to meet the needs of their current and future customers. Because competition is the best thing that can happen in the market, but also the customers need to be protected from abuse.

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