Position of ENERGO-PRO in relation to the allegations of the Mayor of Varna Municipality, Ivan Portnich, that the company is hindering the process of the Municipality's exit to the free electricity market

The company ENERGO-PRO has not in any way hindered the procedure for the Municipality of Varna's exit to the free market. At the time of the public statements of the Mayor of Varna, Mr. Ivan Portnich, Varna Municipality did not fulfill the legal requirements for purchasing electricity at freely negotiated prices, as it had an outstanding obligation to its current supplier — ENERGO-PRO Sales. This obligation has only been extinguished today, 11 February 2014.

The ENERGO-PRO company, not only did not hinder the Varna municipality in this process, even on the contrary - it has always provided assistance. Confirmation of this statement is the fact that as of January 24, 2014. ENERGO-PRO Sales and ENERGO-PRO Networks had signed contracts for the supply of electricity, for access and transmission of electricity, and a certificate of access. All these documents must be signed by Varna Municipality, which has not been done so far.

We bring to your attention the following chronology of events:

On 24.09.2013, the Mayor of Varna, Mr. Portnich, requested by letter the conclusion of individual contracts for transmission and access of electricity; On October 21, 2013. ENERGO-PRO Networks sent a letter to the Municipality of Varna, in which it is explained that as an end customer on a regulated market, the contractual relations of the Municipality with the electricity distribution company are regulated by publicly known General Terms and Conditions and by virtue of the current Energy Law, the conclusion of individual contracts is not allowed; On October 22, 2013, ENERGO-PR Sales sent a letter to the Municipality describing the steps to be taken by the municipal administration to meet the legal requirements for the purchase of electricity on the free market; 13.11.2013 ENERGO-PRO Sales experts met with a group of managers and experts from Varna Municipality (Deputy Mayor, Director of Investment Policy of the Municipality) to make a presentation and answer practical questions on the process of registration and conclusion of a Purchase and Sale Agreement at freely negotiated prices; On January 10, 2014, ENERGO-PRO received the first document necessary for entering the free market of the Municipality - the official application for registration as a commercial participant in the electricity market (with outgoing № RD14000475vn from 8 January 2014).

In order to enter the market at freely negotiated prices, the Municipality of Varna must meet three basic legal requirements: obtain a certificate of access for its sites, register with the network operator (in this case - ENERGO-PRO Networks) and obtain a certificate of absence of old obligations for the sites.

January 23, 2014 ENERGO-PRO Sales AD has signed a Contract for the supply of electrical energy from the Supplier of last resort and has submitted it to the Customer Service Center (CSC) of the company. This contract has to be signed by Varna Municipality, but so far this has not been done; On 24 January 2014 ENERGO-PRO Grids AD has signed and submitted to the CSOC a Certificate of Access, an Access Contract and a Contract for transmission of electricity through the distribution network. They must also be signed by the Municipality of Varna, but so far it has not been done.Only today, February 11, 2014, the Municipality of Varna has transferred the amounts on its last liabilities, sending payment orders to the company with today's date - February 11, 2014. Today, without any delay, the certificate of no obligation was signed by ENERGO-PRO and sent to the CSOC, from where the representatives of Varna Municipality can obtain it.

As is clear from the above facts, ENERGO-PRO has not in any way hindered the procedure for the Municipality of Varna's exit to the free market. We believe that the confusion is due to a misunderstanding within the municipal administration, as a result of which the Mayor was not properly informed. We are convinced that Mr. Portnich will check the facts related to the preparation of the Municipality for entering the market at freely negotiated prices and that the good partnership relations between ENERGO-PRO and the Municipality of Varna will continue in the future.