Parliament passes electricity price freeze for households

Under the legislation, the price freeze will be applicable up to 2 MWh of annual use in the case of all households, with upper limits of 2.6 MWh for households with a disabled member and 3 MWh for large families and farmers. Wojciech Pacewicz/PAP

The Sejm, the lower house of Polish parliament, has passed a bill that freezes the price of electricity for households in 2023 at this year's levels to avoid a spike in electricity bills from January.

Poland relies heavily on coal in electricity 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. 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.

Earlier this month, the ruling party put forward the idea to shield households from enormous increases in electricity prices that would otherwise be expected from January 1.

The bill gained strong support in parliament on Thursday, with 414 MPs voting in favour of the measure, one against and 26 abstaining.

Under the legislation, the price freeze will be applicable up to 2 MWh of annual use in the case of all households, with upper limits of 2.6 MWh for households with a disabled member and 3 MWh for large families and farmers. Households will have to pay market prices above those limits.

Households will also be able to get a 10-percent discount on their bills if they manage to reduce their year-over-year consumption of electricity also by 10 percent.

The government will compensate power companies for the reduced prices.