English Section

Polish MPs back plan to freeze electricity prices

28.11.2024 14:00
Polish lawmakers have passed legislation freezing electricity prices for households at a maximum of PLN 500 (EUR 115, USD 120) per megawatt-hour (MWh) net until the end of September 2025.
Pixabay License
Pixabay LicenseImage by Markus Spiske from Pixabay

Local governments and public service providers will benefit from similar price caps until the end of March.

The measure is part of broader amendments aimed at mitigating energy costs for various groups. It includes a provision allowing municipalities and sensitive institutions, such as hospitals, to access a higher cap of PLN 693 per MWh net until March.

This amendment, added during parliamentary discussions, is expected to cost an additional PLN 150 million (EUR 35 million, USD 37 million), which the government has agreed to cover.

The legislation also introduces new obligations for energy suppliers. Companies designated as "default suppliers" must submit applications to the Energy Regulatory Office (URE) by April 30 to adjust tariffs that will remain in effect through the end of 2025.

Suppliers failing to comply with this requirement will lose compensation for selling energy below regulated rates.

In addition, the bill extends an exemption from the capacity fee—a surcharge for maintaining power grid reliability—for certain consumers using low-voltage connections (up to 1 kilovolt). This exemption, primarily benefiting households, will now continue until mid-2025.

When suspended in mid-2024, the fee ranged from PLN 2.66 to PLN 14.90 net per month, depending on household energy consumption.

The transmission system operator, PSE, will receive compensation for lost revenue from the COVID-19 relief fund.

The government estimates the total cost of these support measures at over PLN 5.6 billion. Of this, PLN 3.73 billion will go toward capping household electricity prices, with an additional PLN 398 million allocated for deferred compensation payments in 2026.

The temporary suspension of the capacity fee is projected to cost PLN 1.48 billion.

The bill’s proponents argue that these measures are essential to shield Polish households and public institutions from volatile energy costs while ensuring grid stability. However, its critics have raised concerns about the long-term financial implications.

The bill, approved on Wednesday by a vote of 412 in favor, three against and 14 abstentions, now heads to the Senate, the upper house of parliament, for further consideration.

If approved by the Senate and signed into law by the president, the new regulations are expected to provide relief to millions of consumers while creating a more predictable energy pricing framework for the next two years.

(rt/gs)

Source: IAR, PAP