On November 19, 2024, a bill was submitted to the Diet that will introduce significant changes for some electricity consumers in connection with the extension of the so-called electricity price freeze1 (draft UD 164). Among the most important issues included in the bill are:
1. Extension of the maximum price from January 1 to September 30, 2025 of 500 PLN/MWh, BUT ONLY for households.
2. What entities will lose state support?
At this point, it should be noted that the bill does not provide for a further freeze on energy prices in 2025 for the entities listed in Article 2(2)(b-f) of the Emergency Measures Law, this means that the following entities will no longer have frozen energy prices:
At this point, it should be noted that the bill does not provide for a further freeze on energy prices in 2025 for the entities listed in Article 2(2)(b-f) of the Emergency Measures Law, meaning that the following entities will no longer have frozen energy prices:
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- small and medium-sized entrepreneurs,
- local government units and entities that consume electricity for the provision of services of general economic interest, from:
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- roads, streets, bridges, squares and traffic organization;
- water supply, sewerage and municipal wastewater treatment plants;
- public transportation;
- health care and providing health care services;
- social assistance, care centers and institutions;
- family support and foster care system;
- housing construction;
- public education and education (including, among others, colleges, kindergartens, nurseries);
- library and other cultural institutions and historic preservation;
- law enforcement and citizen protection (including, but not limited to, fire departments);
- pro-family policy;
- entities working for non-governmental organizations and volunteerism;
- physical culture;
- night shelters or heating facilities;
- churches and religious associations;
- and others. Including entities that are required to provide electricity in the premises used by the aforementioned entities.
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That is, as of January 1, 2025, the price for the aforementioned entities will no longer be 693 PLN/MWh (Article 3(1)(3) of the Emergency Measures Law). As a result, small and medium-sized entrepreneurs and the above-mentioned entities will have to pay the rate agreed with the power company under the concluded energy sales contract. And this is where the problem arises. For the three years that the energy price freeze regulation was in effect, some of the sales contracts could renew automatically at the price included in the electricity seller’s current price list. As long as the regulations freezing electricity prices were in effect, the list prices were irrelevant to the amount of electricity charges. Unfortunately, the exclusion of small and medium-sized enterprises from the energy price freeze support will result in many of these entities switching to the energy prices from the energy seller’s list price. And these may come as a surprise, and a negative one at that. Most of the current energy vendors’ price lists contain net prices exceeding PLN 1 per 1 kWh of energy. This means that unsupported entities may pay from the new year twice the market price of energy. At this point the question arises, whether it was not possible to introduce regulations earlier so that entities deprived of support could make the appropriate changes in energy sales contracts for the year 2025? In our opinion, deprivation of support before the end of the year will result in a large number of companies paying more than twice as much for energy as current market prices.
3. Maintenance of compensation payments for maximum prices
For eligible entities (i.e., an energy company engaged in the business of electricity trading or generation) applying maximum prices to customers, the possibility of receiving compensation will be extended. Compensation will be paid for the period from January 1 to September 30, 2025, and the application to the Settlement Administrator S.A. (hereinafter: “ZR S.A.”) should be submitted by May 31, 2026.
It is worth mentioning that the ZR S.A. may, within 45 days, call on the applicant to improve the application within 7 days in case the settlement report (or its correction) contains formal deficiencies, calculation errors or raises doubts.
Importantly, ZR S.A. will be given an extended deadline, i.e. until December 31, 2028, to require the eligible entity to submit relevant documents or information to justify the amount of compensation paid to it.
4. Suspension of power fee collection:
The draft assumes a zero rate of the power fee referred to in the Power Market Law2 for the period from January 1 to June 30, 2025, for end-users who:
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- consume electricity at energy points with a rated voltage of no more than 1 kV (Article 89a(2)(1) of the Power Market Law), and
- consume electricity for the needs of:
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- households,
- rotational housing, housing of employees of diplomatic missions and employees of foreign representations,
- holiday homes, camping houses and gazebos in allotment gardens where no commercial activity is carried out, and in cases of common metering – the administration of allotment gardens,
- lighting in residential buildings,
- power supply of cranes in residential buildings,
- heat substations and hydroelectric plants, which are under the management of the administration of residential houses,
- garages in which no commercial activity is carried out;
- business premises related to the operation of households, premises of the nature of collective housing and garages, provided that no business activity is carried out in them.
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5. Clarify the issue of tariffs in the law to protect electricity consumers, by:
Imposing an obligation for distribution system operators to apply for tariff amendment or approval to the ERO President by April 30, 2025 by an energy company engaged in the business of electricity trading for the needs of eligible customers;
If the aforementioned obligation is not fulfilled, despite the ERO President’s summons to (i) submit the application, (ii) supplement formal or substantive deficiencies in the application, the authority will inform ZR S.A., which will thereby result in the withholding of compensation, due to the application of the maximum price, until the completion of the tariff proceedings before the ERO President;
An energy company supplying electricity to eligible customers, which is part of a vertically integrated company, shall submit a tariff for approval within the timeframe specified in the Energy Law, i.e. “no later than two months before the expiration of the term of the previous tariff, or at the request of the ERO President ”3.
It is worth noting that the bill will enter into force on the day following the date of its announcement.
The bill is currently in the Sejm and has been referred to the first reading. For more information regarding the bill, please visit the website available at the following link: https://www.sejm.gov.pl/sejm10.nsf/agent.xsp?symbol=RPL&Id=RM-0610-119-24
