The Socio-Political Capture of Utilities: The Expense of Low Energy Prices in Bulgaria and Hungary

Energy regulation underpins the European Union’s efforts to establish competitive energy markets in each Member State. Since the 1990s a system of regulatory governance was established, shifting the oversight of the energy sector from a government and politically centric system to one based on independent national regulatory authorities (NRAs). In some Member States the movement towards market pricing and regulatory governance is prompting political action to reassert and challenge the EU’s institutional architecture. This chapter will look at the underlining concept of energy regulation and how it is implemented in two Eastern European countries, Bulgaria and Hungary. Intense efforts are made in both countries to keep energy prices low in an attempt to address energy poverty. These actions call into question the ability of these countries to modernize and decarbonize their energy systems. Political efforts to maintain low prices create a system of contested governance, marked by political efforts to undermine regulatory tools balancing long-term investments with short-term pricing pressures.