Gov't passes energy price cap bill

In September, the government passed a law freezing electricity prices for usage up to 2 MWh annually for households, 2.6 MWh for households with handicapped persons and 3 MWh for large families and farmers. Wojciech Pacewicz/PAP

The Polish government on Friday passed draft legislation capping electricity prices for households, local governments, power-sensitive companies and SMEs, a government official said on Friday afternoon.

Anna Moskwa, the climate and environment minister, said the new legislation would set a limit at PLN 785 (EUR 162.4)/MWh for companies and PLN 693 (EUR 143.4)/MWh for households with usage of electricity above a previously introduced cap.

The PLN 785 cap will also apply to cultural institutions, including museums, art centres, art galleries, theatres, operas, philharmonic halls, cinemas, libraries, culture centres, as well as to archiving institutions and NGOs involved in public projects.

In September, the government passed a law freezing electricity prices for usage up to 2 MWh annually for households, 2.6 MWh for households with handicapped persons and 3 MWh for large families and farmers.

The cost of freezing energy prices would be around PLN 19 billion (EUR 4 billion) and should be financed from revenues of energy companies, Moskwa told a news conference.

Moskwa said the draft regulation was part of a protection plan for Polish enterprises and households in view of soaring energy prices due to the Russia-Ukraine war.

The Polish cabinet also adopted a bill on the distribution of coal by local governments, which will be able to buy coal for PLN 1,500 (EUR 310.4) per tonne under the condition that they sell it to households for no more than PLN 2,000 (EUR 416.2) per tonne.

Ultimately, households will pay some PLN 1,000 (EUR 208) per tonne of coal, taking into account the earlier coal subsidy of PLN 3,000 (EUR 624.2) per household and recently crafted subsidies to coal purchases made by local authorities, Jacek Sasin, the state assets minister, explained.

Prices of electricity have been under tremendous pressure in Poland due in part to Russia's war in Ukraine. The country relies heavily on coal in electricity and heating production and faces shortages due to an embargo on Russian coal imposed when Russia invaded Ukraine and, as a consequence, is now paying high prices for the commodity.