Energy price project to encompass 17.5 mln customers in Poland - PM

We have prepared solutions that involves a reduction in the excises and surcharges included in electricity bills; the project will encompass 17.5 million energy customers; private households, businesses and local governments, the Polish PM has told PAP.

PM Mateusz Morawiecki explained in an interview for PAP that the reductions in tax rates and transit charges ensure the maintenance of the combined costs to recipients in private households and local governments at a similar level as in 2018; at the same time, the negative effects on the state budget will be offset by funds from the sale of emissions rights.

Asked whether the government could guarantee that energy prices would not rise in the near term, and how they intended to maintain prices at the same level in the longer term, Morawiecki replied: "The philosophy of our government is to find a balance between the market, the economic calculation, and social interests. I said recently in parliament that energy firms' motions to raise electricity prices are a consequence of faulty past decisions and climate policy not taking into account Poland's level of development. We have to adapt the energy industry to the demands of society, but that doesn't release us from social development running smoothly.

"Our priorities in shaping state energy policy are: security, regulation and competition. Security ensuring stability to the state, but also to our families and businesspeople. In turn, regulation is a state faculty to shape the energy market, taking into account such aims and values as would be impossible under pure market conditions. Then the final element is competition, combining the last two elements mentioned. In order to meet the challenge of rising prices of CO2 emissions permits, a responsible state has to support competition between energy enterprises at the same time looking after the interests of the consumers of their services," Morawiecki explained.

"Energy companies also have a lot of work to do themselves. In all certainty they should continue to raise their efficiency, thereby reducing their costs. We hope they will also change the way they form contracts for long-term relations in a way that families, businesspeople and local governments will not be taken unawares by sudden announcements of price-hikes."

Asked what form the new solutions would take and whether they would involve one act or more, the prime minister responded: "We have prepared solutions that will involve among other things a reduction in excises and charges so far included in electricity bills. What is important is that the project will encompass 17.5 million energy consumers: private households, businesspeople and local governments.

"The law reduces the administrative charges included in electricity bills to a significant degree through a reduction in the level of excise from PLN 20 (EUR 4.7)/MWh to PLN 5 (EUR 1.2)/MWh, which is practically the minimum value allowed by European law. An additional activity will be lowering the so-called transit charge by 95 percent, which will allow the bill for households to be cut by PLN 1.7 billion (EUR 397 million)."

PM Morawiecki gave his assurance that these reductions would enable domestic electricity bills to remain at around 2018 levels while mitigating the effects on the state budget through funding from the sales of CO2 emissions permits.