Maximum electricity prices for 2024 are no longer a hot topic. However, it is worth recalling that entrepreneurs in the SME sector, if they meet the criteria, are entitled to a discount on electricity prices for the whole of 2024 in the amount of 10% of the value of electricity purchased in the period from January 1 to December 31, 2023. The basis for granting the discount is Article 20 of the Law on Emergency Measures to Restrict Electricity Prices and Support Certain Consumers in 2023 and 2024 (the“Law”).
In today’s post, I outline the most important issues related to the application of the discount.
1 The amount of the discount. Compensation to the seller
The discount is granted automatically, without the need for separate applications, to any SME entrepreneur who has the status of an eligible customer within the meaning of the Law. The amount of the discount is calculated as 10% of the settlement value of electricity sold in the period from January 1 to December 31, 2023.Two points are important in this regard:
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- the amount of the discount is a fixed value of 10%, not up to 10% or several smaller discounts, making up a total value of 10%,
- by sales settlement should be understood only the sale of electricity, without distribution services.
The price discount is valid for the entire year 2024, and therefore longer than, for example, the electricity price freeze, which lasts until June 30, 2024. The application of the discount is mandatory for eligible customers who are micro, small or medium-sized entrepreneurs (Article 20(1) of the Act).
The amount of the discount is at the same time the amount of compensation that eligible entities (energy sellers) may apply for to the Settlement Administrator S.A. (Article 20(3) of the Act).
The discount should be determined with reference to the price of electricity per kWh excluding VAT and excise taxes (Article 10(3) of the Act), given to 4 decimal places (Article 10(1) of the Act).
2. Granting a discount
The provisions of the Act do not explicitly specify in what form the discount is to be granted, but the drafting of Article 20(1) of the Act indicates that the discount should be taken into account in subsequent billing periods 2024, as a cyclically applied reduction against current receivables for electricity sold, until the full amount of the discount is reached.
In the event that an eligible customer did not purchase electricity in the period from January 1, 2018 to December 31, 2022, the data used as the basis for calculating the equivalent of electricity consumption in this period shall be taken as:
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- the amount consumed in the period from the date of commencement of electricity purchase until December 31, 2022, converted proportionally for the entire period – if the eligible customer did not purchase electricity during the entire period indicated;
- the quantity declared by the eligible customer in the sales contract or comprehensive agreement, if the eligible customer began purchasing electricity after December 31, 2022.
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The rather laconic drafting of the Act’s provisions on the realization of the discount may cause significant problems of interpretation, for example, in the case of a change of seller or the implementation of standby or ex officio sales.
3. Application for compensation by an eligible entity and its payment
Pursuant to Article 20(5) of the Law, compensation for discounts granted is granted in accordance with the rules set forth in Articles 10 through 19 of the Law. The limitation of the application of the provisions of the Law to these articles is significant insofar as the advances referred to in Article 8 of the Law do not apply to compensation for discounts.
At this point, there is no published template for the compensation application, but taking into account the content of Article 12(1) of the Act, it should appear on the website of the Settlement Administrator no later than the last days of February, as applications for compensation can be submitted by eligible entities no later than the 25th day of the calendar month following the month being settled.
4. Triple benefit
It is worth pointing out that the fulfillment of the criteria for the discount is associated with the possibility of achieving as much as a triple benefit. First, the eligible customer benefits from lower electricity prices in 2024. Second, meeting the condition of lower consumption means lower bills in the 2023 period. Third and finally, if the reduction in electricity demand is the result of energy efficiency improvement projects, the entrepreneur can count on receiving white certificates and their subsequent sale on the market. However, it is necessary to achieve the required level of energy savings equivalent to 10 tons of oil equivalent (at least 116.3 MWh/418.68 GJ of final energy savings).
