Negotiations of electricity sellers with the Energy Regulatory Office on energy prices for next year for households have been going on for several weeks. The parties exchange letters – sellers present cost calculations and their proposals for increases, and the regulator sends them additional questions and comments. Thus, every year a compromise is born on the price that we ultimately see on electricity bills.
— Our goal is to complete tariff proceedings by December 17th, so that the tariffs can become effective on January 1st – says Agnieszka Głośniewska, a spokeswoman for the Energy Regulatory Office.
We also hear in energy companies that the deadline should be kept, and the new price lists should enter into force at the beginning of the new year. Tariffs for the sale of energy are awaiting approval, but also for its distribution. Both rates are the most important items on your electricity bill.
However, negotiations with the market regulator were never easy and there were delays. This was the case at the end of 2019, when energy companies could not reach a compromise with the ERO on prices for 2020 for a long time. The companies expected jumpy increases that were intolerable for consumers after electricity bills were left in 2019. artificially frozen by the state at the 2018 level. As a result, in December 2019, only Tauron was granted approval for new tariffs for the next year.
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The remaining companies, i.e. PGE, Enea and Energa, received the ERO’s approval only in January 2020, which meant that they could not introduce increases from the beginning of 2020, and only after 14 days from the publication of tariffs. Moreover, some of these companies applied for new rates only for three months, and not for the entire year as usual. The sellers immediately assumed that they would request another price increase during the year. They did, but the coronavirus pandemic and the associated sharp fall in energy prices in wholesale markets thwarted their plans.
It will be more expensive
What kind of increases in energy prices are to be expected in 2022? Business Insider announced in mid-November, citing unofficial sources, that the scale of the requested increases reaches even 40%. This would mean an increase in the entire electricity bill by about 20 percent. Analysts, however, expect a slightly lower increase in the price of energy, reaching around 30%.
We must remember that at the beginning of the year we will face a tax cut as part of the anti-inflationary shield imposed on electricity, which will make the increases not so severe. At least temporarily. On the other hand, some experts expect that lower taxes may persuade the president of the ERO to turn on the green light for higher electricity prices.
— It cannot be ruled out that due to the VAT reduction, the President of the Energy Regulatory Office will be willing to accept higher increases than in the situation without the government’s intervention – claims Krystian Brymora, DM BDM analyst.
The anti-inflationary shield covers, inter alia, exemption of households from excise duty on electricity (reduction from the current PLN 5 to PLN 0 / MWh), reduction of excise duty for other recipients to the EU minimum, as well as reduction of VAT on electricity (from 23% to 5% in the period January-March 2022).
In addition to the regulator
In Poland, electricity is sold to over 15 million households. The President of the Energy Regulatory Office approves tariffs only for four sellers belonging to state-owned concerns: PGE, Tauron, Enea and Energa (Orlen Group). These four companies supply electricity to over 13 million households. The remaining farms are customers of other companies, such as innogy Polska, which has just changed its name to E.ON Polska.
There are already a number of offers on the market with rates other than those approved by the ERO, created both by the four giants and smaller sellers. They often include additional services for the customer, such as gas supplies, electrician services or a guarantee of a fixed price for a specified period of time. According to the data of the Energy Regulatory Office, it follows, that already about 40 percent. energy consumers use not prices approved by the regulator, but market offers, which are increasingly appearing in the offer of energy sellers.
However, companies that provided their customers with fixed prices for an extended period of time found themselves in a difficult position with energy prices soaring in the wholesale market. Some of them decide to introduce additional fees to save their financial results. An example is PGNiG Obrót Detaliczny, which increased the trading fee from PLN 0 to as much as PLN 51, depending on the tariff group, from next year.. This applies only to customers buying electricity from this company (PGNiG OD specializes in gas sales).
The company explains that the only reason for the increase in the trade fee it was necessary to balance costs and revenues in a situation where the price of electricity sales to customers alone is lower than the current prices at which PGNiG OD purchases electricity on the wholesale market. He also argues that, as a commercial law company, it cannot sell electricity at a loss.
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