Judgment;Summary — ECLI:EU:C:2020:343
Date: 2020-04-30
Language of the case: Bulgarian
Court formation: Tenth Chamber
Subject matter: Energy;Right of establishment;Approximation of laws;Freedom to provide services
Procedure: Reference for a preliminary ruling
Origin: Bulgaria

Summary of the request for a preliminary ruling pursuant to Article 98(1) of 
the Rules of Procedure of the Court of Justice 
Date lodged:  
4 January 2019 
Referring court:  
Varhoven administrativen sad (Bulgaria) 
Date of the decision to refer:  
19 December 2018 
Applicants: 
Оvergaz Mrezhi AD 
Non-profit association Bulgarska Gazova Asotsiatsia 
Defendant: 
Komisia za energiyno i vodno regulirane 
  
Subject matter of the main proceedings 
Dispute regarding the legality of Article 1 No 2 and Articles 11 and 11a of 
Naredba No 2 za regulirane na tsenite na prirodnia gaz (Ordinance No 2 on 
Natural Gas Price Regulation) of the Darzhavnata Komisia za energiyno i vodno 
regulirane (State Energy and Water Regulatory Commission) of 19 March 2013, 
according to which the entire financial burden associated with the public service 
obligations imposed on the energy companies is to be borne by their customers.  
Subject matter and legal basis of the reference 
Compatibility of the aforementioned provisions of national law with Articles 36 
and 38 of the Charter of Fundamental Rights of the European Union and with 
Article 3 of Directive 2009/73/EC of the European Parliament and of the Council 
of 13 July 2009 concerning common rules for the internal market in natural gas 
and repealing Directive 2003/55/EC 
EN 
SUMMARY OF THE REQUEST FOR A PRELIMINARY RULING — CASE C-5/19 
 
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Questions referred 
1. Is a national measure such as the one in issue in this case, provided for in 
Article 35 of the Zakon za energetikata (Energy Law) and set out in more detail in 
Article 11 of Naredba No 2 za regulirane na tsenite na prirodnia gaz (Ordinance 
No 2 on Natural Gas Price Regulation) of the Darzhavnata Komisia za energiyno i 
vodno regulirane (State Energy and Water Regulatory Commission; ‘KEVR’) of 
19 March 2013, according to which the entire financial burden associated with the 
public service obligations imposed on the energy companies is to be borne by 
customers, permissible under Articles 36 and 38 of the Charter of Fundamental 
Rights of the European Union and under Article 3 of Directive 2009/73/EC of the 
European Parliament and of the Council of 13 July 2009 concerning common 
rules for the internal market in natural gas and repealing Directive 2003/55/EC, 
considering that: 
(a) the economic burden arising from the public service obligations does not 
affect all energy companies; 
(b) the costs of the public service obligations are borne mainly by the end 
customers, who are unable to contest them, even though they obtain natural 
gas from the end suppliers at freely determined prices; 
(c) there is no differentiation of the economic burden arising from the 
performance of the public service obligations which is borne by different 
types of customers; 
(d) there is no time limitation for the application of this measure; 
(e) the calculation of the value of the public service obligations is made on the 
basis of the costs accounting method according to a forecast model? 
2. Is a national legal provision such as Section 5 of the Transitional and Final 
Provisions of the Zakon za normativnite aktove (Law on Normative Legal Acts), 
which releases the KEVR from the obligations of Articles 26 to 28 of the Zakon 
za normativnite aktove and in particular from the obligations that exist when 
preparing the draft of a sub-statutory normative legal act to observe the principles 
of necessity, merit, foreseeability, transparency, coherence, subsidiarity, 
proportionality and stability, to hold a public hearing with citizens and legal 
persons, to publish the draft in advance together with the reasoning and to set out 
reasoning, including with regard to compatibility with EU law, permissible under 
Article 3 of Directive 2009/73/EC of the European Parliament and of the Council 
of 13 July 2009 concerning common rules for the internal market in natural gas 
and repealing Directive 2003/55/EC, in consideration of recitals 44, 47, 48 and 49 
thereof? 
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Cited provisions of EU law and case-law of the Court of Justice of the 
European Union 
Charter of Fundamental Rights of the European Union, Articles 36, 38 and 52 
Directive 2009/73/EC of the European Parliament and of the Council of 13 July 
2009 concerning common rules for the internal market in natural gas and 
repealing Directive 2003/55/EC, recitals 44, 47, 48 and 49, Article 3(1), (2) and 
(3) 
Judgment of the Court of Justice of 20 April 2010, Federutility and Others, 
C-265/08, EU:C:2010:205 
Judgment of the Court of Justice of 10 September 2015, Commission v Poland, 
C-36/14, EU:C:2015:570 
Judgment of the Court of Justice of 7 September 2016, Association nationale des 
opérateurs détaillants en énergie (ANODE), C-121/15, EU:C:2016:637 
Provisions of national law cited 
Administrativnoprotsesualen kodeks (Code of Administrative Procedure), 
Articles 146, 185, 187, 190 to 193, 195 and 196 
Zakon za normativnite aktove (Law on Normative Legal Acts), Article 7(2), 
Articles 26 and 28; Section 5 of the Transitional and Final Provisions 
Zakon za energetikata (Energy Law), Article 10, Article 21 No 1, 3, 8, 9, 13, 17, 
19 and 34, Article 30(1) No 7, 8, 11, 12, 14, 16 and 17 and Article 30(2), 
Article 31 No 1, No 2 letters a to c, No 3, 4, 5, 6 and 8, Article 32(1) and (2) No 1 
and 2, Articles 35, 36, 69, 70, 175, 176, 178b and 181; Section 1 of the Additional 
Provisions, No 8, 9, 11, 24, 27b, 27c, 27d and 27e, No 34a letter b, No 34b letter 
b, No 66b and 66c. 
Naredba No 2 za regulirane na tsenite na prirodnia gaz (Ordinance No 2 on 
Natural Gas Price Regulation) of 19 March 2013 (‘Ordinance No 2’), issued by 
the chair of the DEVR, Articles 1, 11 and 11a; Section 3 of the Transitional and 
Final Provisions 
Metodika za opredelyane na tseni za dostap i prenos na priroden gaz prez 
gazoprenosnite mrezhi, sobstbenost na ‘Bulgartransgaz’ EAD (Methodology for 
setting prices for access to and transportation of natural gas via the transmission 
systems owned by Bulgartransgaz EAD), issued by the DEVR, Articles 1 and 6, 
Article 17(1) No 1 and Article 25 
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Brief summary of the facts and procedure 
1 The public supply of natural gas in the territory of the Republic of Bulgaria is 
ensured by the company Bulgargaz EAD as public natural gas supplier at prices 
regulated by the KEVR. ‘Public supply’ is the delivery of natural gas of a certain 
quality at a regulated price or at a price which is set according to a methodology 
approved by the KEVR and other contractual conditions and which may be 
refused only on the grounds mentioned in the Energy Law (ZE). In 2016, 
Bulgargaz’s share in the sale of natural gas was 98%. 
2 The activities of ‘transmission of natural gas’ and ‘natural gas storage’ are 
performed by a different company, namely Bulgartransgaz EAD, a combined 
system operator for natural gas. Bulgartransgaz operates the national transmission 
system for the transport of natural gas in the territory of the Republic of Bulgaria 
to the distribution systems and non-household customers, the transmission system 
for the transit transport of natural gas to the neighbouring countries and an 
underground gas storage facility for offsetting seasonal consumption fluctuations 
and ensuring natural gas supplies. 
3 The activities of ‘distribution of natural gas’ and ‘delivery of natural gas by end 
suppliers’ are performed by the distribution system operators. They deliver natural 
gas to the customers who are connected to the corresponding distribution systems 
of the territories determined by licences. At the end of 2016, 24 companies had a 
licence in Bulgaria. The necessary infrastructure for the distribution of natural gas 
in Bulgaria is currently under development; only a few households are connected 
to the distribution systems. According to information from the distribution system 
operators, the total number of customers in 2016 was 87 274, of which 80 705 
(92%) were households and 6 569 (8%) were businesses. According to 
information from the KEVR, a regulated and a free natural gas market currently 
exist in parallel in Bulgaria, with Bulgaria depending entirely on a single supply 
source. National production is minimal, and there are no bidirectional connections 
to the neighbouring countries. These factors lead to insecurity of deliveries and to 
insufficient competition on the gas market. 
4 The first applicant in the proceedings before the referring court, Overgaz Mrezhi 
AD, is, as an end supplier, party to contracts regarding natural gas within the 
meaning of the Energy Law (ZE). The undertaking is, for its part, supplied with 
natural gas by Bulgargaz. Overgaz Mrezhi is the distribution system operator with 
the most customers, 57 816 or 66% of all natural gas consumers in Bulgaria. 
5 In the proceedings before the referring court, which is examining the case at first 
instance as a chamber with three judges, Overgaz Mrezhi and the non-profit 
association Bulgarska Gazova Asotsiatsia are disputing the legality of certain 
provisions concerning the offsetting of the energy companies’ costs arising from 
the public service obligations imposed thereon. The contested regulations are 
contained in a sub-statutory normative legal act, namely in Ordinance No 2. The 
latter was issued by the KEVR on the basis of Article 36(3) ZE, which essentially 
ОVERGAZ MREZHI AND BULGARSKA GAZOVA ASOTSIATSIA 
 
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specifies that the natural gas prices subject to regulation are set by the KEVR 
through ordinances. 
Pursuant to the Energy Law (ZE), the energy companies have the right to demand 
the offsetting of the costs arising from the public service obligations imposed 
thereon, including the costs associated with security of supply, environmental 
protection and energy efficiency (Article 35(1)). The KEVR is obliged to issue a 
methodology for the transparent redistribution of these costs to all end customers 
(Article 35(5)). The manner of offsetting the costs is regulated in Ordinance No 2. 
6 The dispute in the main proceedings particularly concerns Articles 11 and 11a of 
Ordinance No 2. 
Pursuant to Article 11, the costs recognised by the KEVR which are incurred by 
the energy companies on the basis of the public service obligations imposed 
thereon are to be offset through the prices paid by all customers in a non-
discriminatory and transparent manner. The total amount of the costs recognised 
by the KEVR and stemming from the public service obligations are to be included 
in the annual revenue requirements of the transmission company. These costs are 
to be borne as part of the service value by all natural gas consumers on the basis 
of the measured consumption and constitute a separate component of the price for 
the transportation through the transmission system. The manner of offsetting the 
costs and the mechanism by which these costs are reimbursed to the energy 
companies are regulated in the methodology issued by the KEVR. 
Pursuant to Article 11a, where the public service obligations are imposed on more 
than one energy company, the costs arising from those obligations are to be offset 
by the respective company in proportion to the share of the imposed obligation 
through the prices paid by the customers. The costs recognised by the KEVR are 
to be set as a separate component in the approved price of the energy company 
and borne by its customers and/or by the natural gas end suppliers with which a 
supply contract has been concluded, on the basis of their measured consumption. 
This price component is to be determined on the basis of a reasoned prognosis of 
the costs arising from the public service obligation for the corresponding year and 
the forecast natural gas quantities for the same year. The component in question is 
adjusted for each subsequent accounting period on the basis of the difference 
between the forecast and the actually reported costs arising from the public service 
obligation in the previous accounting period. 
Principal arguments of the parties in the main proceedings 
7 The applicant Overgaz Mrezhi justifies its legitimate interest in the proceedings 
by the fact that it possesses licences for the ‘delivery of natural gas by end 
suppliers’ as well as licences for the ‘distribution of natural gas’. The company 
argues that a surcharge set under Article 11a of Ordinance No 2 on the natural gas 
price in the amount of BGN 2.40 per 1 000 m3 had been approved for Bulgargaz 
by virtue of the contested provisions for the second quarter of 2017. For this 
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reason, Overgaz Mrezhi had paid the public supplier an amount of BGN 85 980 as 
a surcharge for the months of April and May 2017 alone. The amount had been 
calculated on the basis of the quantities stated in the invoices issued by the public 
supplier for the natural gas deliveries in those months. 
On 1 July 2017, the amount of the price component for the third quarter of 2017 
had been set at BGN 2.42 per 1 000 m3 pursuant to Article 11a of Ordinance No 2. 
For that quarter, the expected consumption of natural gas was 45 534 thousand 
m3. With a surcharge of BGN 2.42 per 1 000 m3, the amount to be paid by 
Overgaz Mrezhi for that period would be BGN 110 192.28. 
8 The non-profit association Bulgarska Gazova Asotsiatsia argues that the 
provisions contested thereby are unlawful due to a material breach of provisions 
of administrative procedure and due to inconsistency with the substantive law and 
the objective of the law. The applicant is of the view that the aforementioned 
provisions of Ordinance No 2 inadmissibly extend the area of application of 
Article 35 ZE, and it submits that these provisions are a reason for the abrupt 
increase in the price of natural gas and obviously directly concern the public 
interest. It claims that all the public service obligations mentioned in the ZE are 
connected with the purchase of electricity, which means that the distribution of 
costs arising from public service obligations in the gas sector is unjustified. The 
association stresses that part of the abrupt increase in the price of natural gas 
(around 30%) through the KEVR’s decision of 31 March 2017 on the setting of 
natural gas prices for the second quarter of 2017 was based precisely on the need 
to offset costs arising from public service obligations. 
9 The defendant, the KEVR, claims that, pursuant to Section 5 of the Transitional 
and Final Provisions of the Zakon za normativnite aktove (Law on Normative 
Legal Acts, ‘ZNA’), certain provisions of that law are correspondingly applicable 
in relation to the normative legal acts issued by the KEVR, but not Article 26 et 
seq. ZNA. The last-mentioned provisions stipulate the compliance with certain 
requirements in the procedure for preparing the draft of legal norms, such as the 
observance of certain principles, the holding of public hearings and the 
publication of the draft together with the reasoning and a preliminary assessment 
of the effects on the corresponding website. In substance, the KEVR argues that 
public service obligations could also be imposed on energy companies in the 
natural gas sector; this was expressly provided for in Article 69 ZE. It is of the 
view that it is legally entitled to specify in Ordinance No 2 the types of price-
determining components and the types of costs of the public supplier that are to be 
reimbursed thereto. 
10 The KEVR also points out that, according to the emergency plan approved by the 
Energy Minister pursuant to Regulation (EU) No 994/2010 of the European 
Parliament and of the Council (‘emergency plan’), Bulgartransgaz was storing 
quantities of natural gas with a certain maximum extent in the ‘Chiren’ 
underground storage facility. These quantities formed a reserve which was 
necessary for ensuring continuous supply, and Bulgartransgaz made use thereof 
ОVERGAZ MREZHI AND BULGARSKA GAZOVA ASOTSIATSIA 
 
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only when the supply of natural gas was interrupted. In No 2.1.18 of the 
emergency plan, it was provided that Bulgartransgaz would be compensated for 
the costs for maintaining the natural gas reserve through the prices for access to 
and transportation of natural gas via the transmission systems in accordance with 
Article 35 ZE. The conditions and the mechanism for determining the prices for 
access to and transportation of natural gas were regulated by the methodology for 
fixing the prices for access to and transportation of natural gas via the 
transmission systems owned by Bulgartransgaz. In Article 17 No 1 of the 
methodology, it was provided that the directly apportionable costs for the 
corresponding year of the regulatory period were determined every year and 
comprised the costs arising from the performance of public service obligations, 
including the costs in connection with the security of supply and the operator’s 
obligations resulting from the emergency plan. The KEVR is of the view that this 
procedure is entirely in line with Regulation (EU) No 994/2010. 
The KEVR also states that, pursuant to No 3.5.1 of the emergency plan, Bulgargaz 
was obliged to stock quantities of natural gas for offsetting the seasonal 
differences in the underground storage facility at the beginning of the winter 
season, these quantities corresponding to 10% to 20% of the annual orders of its 
customers — district heating companies and end suppliers. In order to satisfy 
No 3.5.2 of the emergency plan, the natural gas companies were obliged to stock 
natural gas with a guide volume totalling 290 million m3 in the underground gas 
storage facility at the beginning of the winter season. The public supplier was 
amongst the natural gas companies within the meaning of No 3.5.1 to which the 
obligations arising from the emergency plan applied and which were responsible 
for the security of supply. The offsetting of the costs incurred by the natural gas 
companies for providing the reserve through the prices of the licensed services in 
accordance with the aforementioned Article 35 ZE was prescribed for this case in 
No 3.5.8 of the emergency plan. 
The KEVR issued decisions authorising Bulgargaz, as public natural gas supplier, 
to use the prices at which the undertaking sold natural gas to the end suppliers and 
to the customers connected to a transmission system. In line with Ordinance No 2, 
the amount of the price component serving to offset the costs resulting from the 
public service obligations was set on the basis of a forecast/preliminary overview 
of the storage of natural gas and the extraction and pumping of the quantities of 
natural gas from the underground storage facility when fulfilling the obligations 
from the emergency plan. When determining this price component by quarter of 
the corresponding year, account was taken of the calculated differences between 
the forecast and the settled quantities of natural gas, the payments made for the 
storage of these quantities in the underground storage facility and the quantities of 
natural gas actually delivered to the customers, after the information, invoices and 
files provided by the public supplier had been analysed. The expected costs for the 
storage of the quantities of natural gas required pursuant to the emergency plan 
were calculated according to the price for the underground storage approved by 
the KEVR and applicable at the relevant time. In this way, the burden of the 
public service obligations was borne not only by the customers of the end 
SUMMARY OF THE REQUEST FOR A PRELIMINARY RULING — CASE C-5/19 
 
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suppliers, but also by the customers of Bulgargaz who are connected to a 
transmission system. 
According to the submission of the KEVR and information from the distribution 
system operators, the total number of customers of these operators in the natural 
gas sector in 2017 was 96 382, of which 89 469 (93%) were household customers 
and 6 913 (7%) were non-household customers. The average consumption of all 
household customers in Bulgaria was very low, namely 2.88% of the total 
consumption in the country. The remaining consumption was mainly by 
customers who were connected directly to a transmission system of 
Bulgartransgaz and who Bulgargaz supplied at regulated prices. 
The KEVR refers to the methodology issued thereby for setting the prices for the 
access to and the transfer of natural gas via the transmission systems owned by 
Bulgartransgaz (‘methodology’). This provided that the directly apportionable 
costs for the corresponding year of the regulatory period were set every year and 
comprised the costs arising from the performance of public service obligations, 
including the costs in connection with the security of supply and the operator’s 
obligations resulting from the emergency plan. Pursuant to Article 25(3) of the 
methodology, the price for the transport could comprise costs arising from public 
service obligations, with these costs having to be indicated as a separate 
component in the price. The KEVR expressly emphasises that it did not issue any 
other methodologies or internal regulations concerning the method and manner of 
distributing the costs arising from public service obligations regarding the 
supplying of end consumers with natural gas. 
11 In the view of the public prosecutor at the Varhovna administrativna prokuratura 
(Supreme Administrative Public Prosecutor’s Office), consumer interests are not 
effectively protected in the national law of the Republic of Bulgaria. The public 
prosecutor is essentially of the opinion that the contested provisions of Ordinance 
No 2 seriously impair the rights of the end consumers, are not in line with the 
principles of administrative procedure and allow the energy companies to 
determine unreasonably high prices for their service. 
Brief summary of the basis for the reference 
12 The Varhoven administrativen sad (Supreme Administrative Court) of the 
Republic of Bulgaria is calling upon the Court of Justice of the European Union to 
address the sensitive matter, already discussed, of the extent of the power of the 
Member States to intervene in the fixing of prices for the supply of natural gas. As 
stated by the Advocate General in his Opinion of 12 April 2016 in the Association 
nationale des opérateurs détaillants en énergie (ANODE) case (C-121/15, 
EU:C:2016:248), this is a sensitive matter because it involves reconciling two 
requirements which are not without mutual contradiction: on the one hand, the 
express objective of Directive 2009/73 of opening up the national markets so as to 
achieve a completely open internal market in natural gas in the European Union 
ОVERGAZ MREZHI AND BULGARSKA GAZOVA ASOTSIATSIA 
 
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and, on the other hand, the public service requirements in the general economic 
interest, in respect of which the Member States still have a wide discretion. 
13 It is apparent from the case-law of the Court of Justice that, although State 
intervention in the fixing of prices for the supply of natural gas to final consumers 
constitutes an obstacle to the achievement of a competitive market in that field, 
that intervention may nevertheless be permitted under Directive 2009/73, provided 
the conditions which it sets out are met.  
14 The Varhoven administrativen sad does not find any answers to the questions 
referred thereby in the case-law of the Court of Justice. It refers to three 
judgments of the Court of Justice: judgment of 20 April 2010, Federutility and 
Others, C-265/08, EU:C:2010:205, judgment of 10 September 2015, Commission 
v Poland, C-36/14, EU:C:2015:570, and judgment of 7 September 2016, 
Association nationale des opérateurs détaillants en énergie (ANODE), C-121/15, 
EU:C:2016:637. However, the referring court is of the view that these judgments 
deal with national cases in which there is regulation of the prices for supplying 
end consumers with natural gas, unlike on the Bulgarian market, where natural gas 
is offered to end customers at freely determined prices. Furthermore, none of the 
three judgments deals with the issue of a specific price component such as that of 
the value of the public service obligations imposed on the energy companies. 
15 Directive 2009/73 does not establish who bears the financial burden arising from 
the performance of the public service obligations imposed on the national 
undertakings; it in no way expressly imposes these burdens on consumers. The 
question is raised as to whether the Directive mentioned allows a national 
measure, such as that examined here, which provides for the financial burden 
associated with the energy companies’ public service obligations being borne by 
the customers, including the end customers, without differentiating between the 
customers according to any criterion. 
16 At the same time, one of the essential principles of EU law, the principle of 
proportionality, requires that, when implementing and applying measures of EU 
law, the national legislature must weigh up whether the measure concerned is 
likely to achieve the objective pursued, which in this case is enshrined in the 
Directive mentioned, and whether the means provided therefor are necessary with 
regard to the restrictions and disadvantages which the achievement of the 
objective entails. 
17 As already explained, a regulated and a free natural gas market currently exist in 
parallel in Bulgaria. Overgaz Mrezhi obtains natural gas from Bulgargaz at prices 
regulated by the KEVR and sells the natural gas to the end customers at freely 
determined prices. Part of the regulated gas price paid by Overgaz Mrezhi 
includes the price which covers the costs incurred by the public supplier and the 
combined system operator through the performance of the public service 
obligations. Both economic logic and the statistics submitted by the KEVR reveal 
that this influences the natural gas price for all customers. 
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18 Article 35 ZE prescribes the transfer of the price of the public service obligations 
to the end customers; the contested Articles 11 and 11a of Ordinance No 2 specify 
that the costs incurred by the energy companies as a result of public service 
obligations are offset by the prices paid by all customers, with these costs forming 
a separate component of the price to be paid to the energy companies. Therefore, 
the national regulation prescribes, and economic logic also states, that the 
economic burden arising from the energy companies’ public service obligations is 
borne by the customers, most of which are not energy companies. 
19 It should be noted that Article 3(2) of Directive 2009/73 provides for the 
possibility of imposing public service obligations ‘on undertakings operating in 
the gas sector’ in general and not just on certain undertakings. According to 
Article 3(1) of the Directive, Member States ‘shall not discriminate between those 
undertakings as regards their rights or obligations’. The purpose of the 
requirement of non-discrimination is that the obligations concerned are imposed 
equally on all operators in this sector in order not to impair competition. Under 
these conditions, the method for determining the undertakings obliged to provide 
services in the public interest or to bear the costs for those services may not 
exclude any undertaking in the sector, including the public supplier and the 
combined system operator. 
20 The requirement of proportionality must also be assessed with regard to the scope 
ratione personae of the measure, and, more particularly, its beneficiaries. In the 
judgment of 20 April 2010, Federutility and Others, C-265/08, EU:C:2010:205, 
the Court of Justice of the European Union examined this aspect of the 
proportionality of the corresponding measure with regard to the objective pursued, 
namely maintaining the price of the supply of natural gas to final consumers at a 
reasonable level. The Court of Justice ruled that the requirement of proportionality 
would not, in principle, be complied with if the legal regulation were to benefit 
individuals and undertakings in an identical manner, in their capacity as final 
consumers of gas. 
21 It is correct that consumers in Bulgaria purchase natural gas at freely determined 
prices, but it is also correct that these prices depend directly on the regulated price 
at which the end supplier obtains the gas from the public supplier. In this way, the 
price of the public service obligations is ultimately borne by the end consumers, 
and could prove to be much too high for some of them. On the one hand, the gas 
price for industrial consumers, who require a large amount of natural gas, is 
reflected in the production costs. On the international market, this fact may affect 
the competitiveness of Bulgarian industrial natural gas consumers. It is known that 
some States take measures to reduce the costs for industrial manufacturers, which 
result, for example, from the promotion of green energy. This is the case in 
Bulgaria as well as in Austria and Germany. On the other hand, the financial 
burden associated with the public service obligations may prove to be 
prohibitively expensive for customers in need of protection, such as natural 
persons or customers providing public services, such as hospitals, care facilities, 
educational facilities and the like. 
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22 With regard to the duration of the application of the measure, it should be noted 
that the Bulgarian legal provisions contain neither a time limitation for the 
obligation to supply natural gas at regulated tariffs by the public supplier nor a 
time limit for the end customers’ obligation to bear the economic burden arising 
from the public service obligations. The measures are therefore permanent. The 
legislatively regulated obligation to review periodically the regulated tariffs does 
not concern the need for the State to intervene in prices and the manner of its 
doing so, which depend on the development of the natural gas sector. 
23 Directive 2009/73 does not provide any indications regarding the manner of 
calculating the tariffs, or regarding the costs which could possibly be covered 
thereby. It is based on the idea that the price for the supply of natural gas should in 
principle result from free competition. Under those circumstances, provided that 
all the conditions for State intervention in pricing are met, there is nothing, in 
principle, to preclude the application of a method for determining the regulated 
tariffs based on consideration of costs. With regard to the principle of 
proportionality, however, the question is raised as to which costs may be taken 
into consideration in the determination and whether they should be included in full 
in the final price for the various types of consumers. 
24 According to KEVR, the only public service obligation of the energy companies 
in the natural gas sector is maintaining the reserve in the ‘Chiren’ underground 
gas storage facility. The quantities of natural gas that are to be kept in stock in this 
gas storage facility are fixed for every period by legal acts which cannot be 
contested by the end customers, as there is no direct and immediate legal interest. 
For this reason, the end customers are excluded from contesting the value, set by 
the KEVR, of the costs for meeting this obligation. Therefore, for the end 
customers, this value constitutes a prescribed factor which ultimately indirectly 
affects the natural gas price which they pay to the end supplier and with which 
they have to comply. 
25 The objective of Directive 2009/73 is to improve the functioning of the internal 
market in natural gas. The non-discriminatory and transparent access to the natural 
gas supply is necessary for ensuring genuine competition and of central 
importance for completing the internal market in natural gas. In this connection, 
the provisions of Directive 2009/73 are based on ensuring consumer protection. 
This concern relates both to the liberalisation of the gas market and to the security 
and stability of the supply of electricity and gas. It is precisely on the basis of 
these considerations and its doubt as to whether consumers are protected in the 
manner prescribed in the Directive that the Varhoven administrativen sad is 
raising the first question in its request for a preliminary ruling. 
26 The second question relates to the KEVR’s submission that it was not an authority 
provided for by the constitution of the Republic of Bulgaria and that, pursuant to 
Section 5 of the Transitional and Final Provisions of the ZNA, it was not subject 
to the regulations of Articles 26 to 28 ZNA, that is to say, those regarding the 
application of the principles of necessity, merit, foreseeability, transparency, 
SUMMARY OF THE REQUEST FOR A PRELIMINARY RULING — CASE C-5/19 
 
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coherence, subsidiarity, proportionality and stability when preparing the draft of a 
normative legal act; the holding of public hearings with citizens and legal persons, 
consultation with other administrative authorities, presenting detailed reasoning 
indicating the grounds which necessitate the issuing of the normative legal act, the 
objectives pursued, the financial and other means required for the application of 
the new regulation, the results, including any financial results, expected from the 
application and the analysis of the compatibility with the law of the European 
Union. 
27 However, on the basis of the requirement of Directive 2009/73 that the obligations 
associated with public services must be clearly defined, transparent, non-
discriminatory and verifiable and guarantee equal access for natural gas 
companies from the Community to national customers, there is a need for detailed 
reasoning for the national provisions which introduce such obligations, including 
with regard to who bears the economic burdens arising from the obligations and in 
what way. The national regulatory authority is undoubtedly also obliged to 
conduct an analysis of the compatibility of the sub-statutory normative legal acts 
issued thereby with EU law.