President signs electricity price bill

2018-12-30 16:38 update: 2019-01-04, 11:56
Photo: PAP/Rafał Guz
Photo: PAP/Rafał Guz
President Andrzej Duda has signed a draft designed to stabilise electricity prices over 2019, Duda's spokesperson Błażej Spychalski informed on Sunday. The new laws introduce a 75 percent excise tax cut on electric power and a 95 percent cut in transitional fees.

Approved by the government last week and self-amended a day before the Friday parliamentary vote, the new legislation is to help end-users of electricity in Poland avoid electricity price hikes next year.

Spychalski reminded that Duda consulted electricity prices with the energy minister shortly before Christmas, and stressed that he decided to sign the legislation because he held it as useful and necessary. He added that the laws will probably be published in the Journal of Laws on Monday, and will come into force on January 1, 2019.

Apart from the excise tax cut, power companies will be offered a total of PLN 4 bln (EUR 0.93 bln) in government compensation.

Polish households faced major electricity bill hikes from January due to a surge in the prices of the EU's emission allowances. Polish power companies depend on those allowances as their power generation is largely based on burning coal, which creates a CO2 footprint that must be compensated by purchasing such allowances.

Under the new legislation, the excise tax will be cut to PLN 5/MWh from PLN 20/MWh (to EUR 1.16/MWh from EUR 4.66/MWh), which will lower the total on electricity bills by an estimated PLN 1.85 bln (EUR 430 mln) in 2019.

Transitional fees will be reduced by 95 percent for all recipients, including households, companies and local governments. This change will decrease the total on electricity bills by PLN 2.24 bln (EUR 521 mln).

The legislation also pumps PLN 1 bln (EUR 230 mln) into the national system of green investments to reduce the country's CO2 footprint.

The initiatives are to be funded by the sale of 55.8 mln tonnes of CO2 emission allowances which are estimated to provide PLN 5 bln (EUR 1.16 bln) towards the project.

The total intervention is to cost PLN 9 bln (EUR 2.10 bln). (PAP)