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Counteracting the Effects of Increase in Electrical Energy Prices

The system of laws on mechanisms counteracting the effects of increase in electrical energy prices is nearing completion.

The system will consist of two acts of parliament:

  • Act of 28 December 2018 Amending the Act on Excise Duty and Certain Other Acts;
  • Act on Compensation System for Energy-Intensive Sectors and Subsectors, which is waiting for President's signature.

The particular groups of end users, which purchase electrical energy under the sales contract or so-called comprehensive contract, are or will be entitled to:

  • micro and small enterprises – the electrical energy prices freeze in whole 2019;
  • medium and large enterprises – the electrical energy prices freeze in 1st half of 2019 and subsidies covering costs of increase in electrical energy prices in 2nd half of 2019;
  • entrepreneurs active in energy-intensive sectors and subsectors – compensations from 2019 to 2027.

The rules are different for end users, which purchase electrical energy for their own use from commodities exchange market, from market organized by operator of regulated market, or through a commodity broker or a broker trading commodities.

I. Micro and small enterprises

Energy companies, which after 30 June 2018 have concluded with micro and small entrepreneurs new electrical energy sales contracts or comprehensive contracts (or have changed previous ones), and have set prices and charges higher than before, will restore more favorable conditions in the manner determined in implementing ordinance until 13 September 2019.

Change of prices and charges will be effective from 1 January 2019. Micro and small enterprises will benefit from changed prices and charges in whole 2019, provided that on time they have filed to energy companies a declaration about their status of micro or small enterprise. If they have failed to do so, the electrical energy prices freeze will be effective only in 1st half of 2019, i.e. from 1 January to 30 June 2019.

II. Medium and large enterprises

Medium and large enterprises take advantage of electrical energy prices freeze in 1st half of 2019 on the same conditions as micro and small enterprises do, without the need to file to energy companies a declaration about their status.

In order to obtain support for 2nd half of 2019, these enterprises have to apply to Zarządca Rozliczeń S.A. for subsidies covering costs of increase in electrical energy prices, which constitute de minimis aid. Deadline to file the application is far, because it has been set on 30 June 2020. However, first application may be submitted after end of 3rd quarter of 2019.

III. Entrepreneurs active in energy-intensive sectors and subsectors

Entrepreneurs active in energy-intensive sectors and subsectors (see codes below) still have to wait for enactment of the Act on Compensation System for Energy-Intensive Sectors and Subsectors.

It is already known, that such entrepreneurs will not be eligible for subsidies as medium and large enterprises are. End users active in businesses specified in the Polish Classification of Activities (PKD) 2007 or in the Polish Classification of Goods and Services (PKWiU) 2015 with codes: 24.42; 08.91; 20.13; 24.43; 14.11 (ex. 32.99); 24.10; 24.20.1; 17.12; 20.15 (ex 38.21); 24.44; (ex.19.10) 20.14; 13.10; 20.60; 07.10 (ex 09.90); 20.16.10; (ex 20.16.51.0); (ex 20.16.30.0); (ex 20.16.40.0); 17.11.14.0, producing at least one product in the listed sector and subsector, were deprived of right to apply for subsidies.

If the Act on Compensation System for Energy-Intensive Sectors and Subsectors is passed, entrepreneurs active in that sectors or subsectors will have to verify if they are eligible for compensation under this Act. If they are, and would like to submit the required application until 31 march 2020, they will have to waive their right to electrical energy prices freeze in 1st half of 2019. If they do not do that within 14 days of entry into force of the Act, they will benefit only from electrical energy prices freeze, but will have no support for the 2nd half of 2019.

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The system of laws on mechanisms counteracting the effects of increase in electrical energy prices, not yet finished, is still undergoing many changes. There is news that parliament is working on amendment giving micro and small enterprises another chance to submit required declaration, so that they can have support in whole 2019.

We will keep you updated on changes in these mechanisms.  For any additional information please contact our colleague Attorney-at-law Kinga Słomka.