Without freezing electricity prices, energy costs may increase significantly from July. – Bills now consume the largest part of our income – says Jolanta, the owner of a flower shop in Warsaw's Mokotów district, in an interview with the tvn24.pl business editorial team. Ordinary customers of energy companies are also worried, some of whom have already received higher energy advance payments for the second half of the year.
There is quite a stir in one of the Facebook groups for thrifty people. Some people are looking for energy-saving light bulbs, others joke that it's time to switch to candle light. “It's good that we have photovoltaics,” says another interviewee.
It's about electricity prices. The current regulations on freezing energy prices expire at the end of June.
– The current will exhaust us – says Jolanta, the owner of a flower shop in Warsaw's Mokotów district. – Bills consume the largest part of our income, even I pay less for rent. Since the pandemic, costs have already increased by one hundred percent, and when energy prices are unfreezed in July, we will see another 70 percent more, he says.
When the heating season ends, the flower shop must start air conditioning. Plants need the right temperature, and air drying is also important. Without it, the humidity is too high and the flowers start to rot. – We have reduced the number of lamps we use, we do not illuminate the flower shop outside. We have shortened the opening hours and employ fewer people – says the florist. – However, we cannot raise prices any longer. Flowers are not a basic necessity, if customers cannot afford them, they simply will not buy them. Yet they also feel the effects of inflation and higher bills, he explains.
Households and entrepreneurs are waiting for new regulations that will determine what will happen to their bills after July 1. Since they are not available yet, some customers have already received higher energy advance payments for the second half of the year than before. Opposition MPs: Marcin Warchoł (Sovereign Poland) and Waldemar Buda (PiS) drew attention to this.
Frozen electricity prices
Currently applicable regulations set maximum electricity prices for households at PLN 412 per MWh net up to a specified consumption limit. Once it is exceeded, a fixed maximum price of PLN 693 per MWh applies. The same maximum price is paid by micro, small and medium-sized entrepreneurs.
If the freeze ended completely, energy companies would use the much higher rates set in the 2024 tariffs to calculate their bills.
The possible scale of increases is illustrated in price lists published on Energa's website. Until the end of June, customers pay (net) just over PLN 0.41 per kilowatt hour in the 24-hour tariff. From July 1 to the end of December – it will be over PLN 74 (an increase of 80%). It is similar in other energy companies. However, electricity prices account for approximately half of the amount that will ultimately appear on the bill – the rest is taxes and other fees.
Energy companies themselves are reluctant to accept higher advance payments for the second half of the year. “Until a possible law/regulation supporting eligible recipients appears, the prices that will apply after June 30 this year are determined by the tariff approved by the President of the Energy Regulatory Office (households) or an individual contract in the case of small and medium-sized companies. We do not comment on details regarding settlements. in the second half of 2024 until new forms of support for energy consumers appear after July 1,” explains PGE.
“At E.ON Polska, we are currently working on a tariff for 2024 for individual customers,” says the operator operating mainly in Warsaw. “In our opinion, at the moment (in the absence of statutory changes – ed.), after July 1, 2024, a certain increase in market prices can be expected compared to the frozen prices from 2023. At the moment, however, we are unable to determine how much there will be this increase,” it added.
Work on the government regulation of electricity prices is ongoing. The Ministry of Climate and Environment is responsible for them, and it has already presented the ready draft of the act. The government is expected to deal with it this month. The prepared regulations assume the extension of the maximum price for electricity for households for the rest of the year, but at the level of PLN 500 net per megawatt hour (MWh).
Will electricity bills increase?
What does this mean for our electricity bills? – From July they will increase by just over 30 percent. So, in an average household, instead of PLN 150, we will pay PLN 200 – says Bartłomiej Derski from WysokieNapiecie in an interview with the tvn24.pl business editorial team.
At the same time, he adds that some people will receive an energy voucher, which may even reduce their electricity bill.
Read also: Energy voucher. You can get up to PLN 1,200
Derski points out that the new benefit will only be available to households. The situation with companies is slightly different. – Those companies that signed an energy contract when prices were the highest are in a difficult situation – he explains.
At the same time, currently the wholesale price of energy on the stock exchange for this and next year is close to PLN 50 net per kWh. – The government wants to introduce a 1.5-year tariff, i.e. by the end of 2025. Why? Because companies systematically purchase additional energy and prices are falling. Energy companies should take these declines into account, explains Derski. – Summer may be a good time to contract energy for a longer period of time. It is difficult to predict what level prices will reach in the future, a lot depends on autumn and winter, but there are reasons to predict declines – he says.
Main photo source: Grusho Anna/Shutterstock