Government adopts draft law freezing electricity prices for households

The Polish government has approved a bill capping electricity prices for all households for the next year to alleviate the impact of high energy prices, government spokesperson said on Monday evening.

Under the draft law adopted on Monday, household electricity prices will be frozen next year at 2022 levels up to certain consumption thresholds, with the baseline threshold set at 2,000 kWh annually.

The limit will be raised to 3,000 kWh for households with a disabled person, families with at least three children and farmers.

Additionally, households that manage to reduce their electricity consumption by at least 10 percent next year will get a 10-percent discount on their total annual bill.

The freezing of tariffs will cost the Polish budget around PLN 23 billion (EUR 4.84 billion), the government said in a statement following Monday's sitting.

Now the bill goes to the Sejm, the lower house of the parliament.

Poland relies heavily on coal in electricity production and faces shortages due to an embargo on Russian coal imposed when Russia invaded Ukraine, thus the prices of the commodity have spiked. Additionally, Polish power plants have to bear an above-average cost of the EU's emission allowances (ETS) which they need to purchase to compensate for their CO2 emissions.