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Relief for energy-intensive businesses, other businesses under strain

The Ministry of Energy has published a draft amendment to the regulation on tariffs reducing the burden of the qualitative fee on some “large” industrial customers.

So far, only the largest customers, consuming over 400 GWh of electricity per year, using not less than 50% of the contracted capacity, have paid the preferential qualitative fee rate at the level of 10% of the nominal rate. This translates into relief attributed to only 1.3 TWh of electricity per year. The total annual consumption of electricity in Poland is approximately 164 TWh.

In response to the electricity price increase, the ministry has proposed to extend the relief to so-called “large” industrial businesses consuming more than 100 GWh, listed in the Renewable Energy Sources Act. The predominant economic activity of those entities is defined under the Polish Classification of Activities (PKD) as 0510, 0729, 0811, 0891, 0893, 0899, 1032, 1039, 1041, 1062, 1104, 1106, 1310, 1320, 1394, 1395, 1411, 1610, 1621, 1711, 1712, 1722, 1920, 2012, 2013, 2014, 2015, 2016, 2017, 2060, 2110, 2221, 2222, 2311, 2312, 2313, 2314, 2319, 2320, 2331, 2342, 2343, 2349, 2399, 2410, 2420, 2431, 2432, 2434, 2441, 2442, 2443, 2444, 2445, 2446, 2720, 3299, 2011, 2332, 2351, 2352, 2451, 2452, 2453, 2454, 2611, 2680, and 3832.

The ministry proposes to calculate the electricity consumption intensity index as the criterion for granting relief; the same criterion applies to industrial customers. However, the possibility to pay the qualitative fee at a preferential rate of 10% of the nominal value would be available only to entities with an intensity ratio above 20%.

According to the ministry’s calculations, the new relief would cover 34 entities consuming 13.11 TWh of electricity per year.

The ministry assumes that the introduction of this relief for a selected group of energy-intensive customers will not reduce the financial revenue from the fee. This makes it necessary to increase the rate of the qualitative fee for end users. It will have a financial impact on other electricity consumers, including in particular households and SMEs. The ministry estimates that the relief will result in an increase in the nominal qualitative fee rate by PLN 1.19 per MWh, to PLN 13.72 per MWh (an increase of 9.5%) and will result in an average increase of the energy bill of PLN 2.56 per household.

The draft act has been submitted for public consultation.

Marek Dolatowski, attorney-at-law, Energy practice, Wardyński & Partners