PKEE's position on the impact of new electricity tariffs on energy prices in 2023

17 December 2022.

Position of the Polish Electricity Committee on the impact of new tariffs 
for the sale of electricity on energy prices in 2023

The G-tariffs for the sale of electricity for 2023, announced on 17 December 2022 by the President of the Electricity Regulatory Authority, will not affect the bills of most households. The electricity price freeze introduced by the government[1] within the consumption limits for residential customers ensures that electricity prices net of excise duty and value added tax (VAT) are maintained at 2022 levels. The limits vary according to the type and household, number and living situation of the people living there:

  • 2,000 kWh per year (i.e. 2 MWh) - for most households (i.e. all those not eligible for the increased energy consumption limit - referred to below)
  • 2600 kWh per year (i.e. 2.6 MWh) - for a household occupied by a person with a disability
  • 3000 kWh per year (i.e. 3 MWh) - for households with a Large Family Card and for farmers

At the same time, on the initiative of the government, a statutory[2] a maximum price mechanism for electricity to be billed to eligible customers by energy sellers.

As a result, the increase in the price of electricity under the G tariff for households that exceed their above-mentioned limits in 2023 will not be severe. The maximum price for residential customers will be PLN 693 per 1,000 kWh (i.e. per MWh of energy consumed - each after the cap threshold is exceeded). It is worth noting that energy prices for residential consumers for 2023 have been set at a level well below market energy prices, the average of which in forward contacts for 2023 on the Towarowa Giełda Energii is over £1,000 per 1,000 kWh (1 MWh). 

The regulations introduced by the government freezing electricity prices at the 2022 level also protect household consumers against increases in electricity distribution service charges, as the electricity distribution tariffs used for billing in 2023 cannot be higher than those in force in 2022, up to the consumption limits indicated above. Once these are exceeded, the household is to be billed for each additional kWh consumed at the prices applicable in the distribution tariff of the relevant operator in force in 2023.

The increase in electricity distribution tariffs for 2023 announced by the President of the ERO is due to the increasing costs of maintenance, renovation and investment in distribution lines. The increase in distribution tariffs approved by the energy market regulator will make it possible - despite the ongoing energy crisis - to carry out further necessary investments in the development and maintenance of distribution networks, including replacement, modernisation, as well as the construction of infrastructure to ensure stable electricity supply to consumers. They will make it possible, among other things, to connect to the electricity grid more domestic photovoltaic installations and other renewable energy sources, developed both by prosumers and energy companies. 

Implementing the transformation of the energy sector in Poland requires hundreds of billions of zlotys of investment. It is an essential process for maintaining energy security and sovereignty and for achieving the EU's climate goals, as well as for halting the observed increase in energy prices. The importance and implementation of the energy transition process has increased under the conditions of the ongoing energy crisis caused by Russia's aggressive policy. According to estimates prepared for PKEE by the consulting firm EY - the four largest Polish energy groups, i.e. PGE, Enea, Tauron and Energa, will have to spend as much as PLN 135 billion on the energy transformation this decade. The energy transformation is a great challenge, the cost of which exceeds the companies' own investment capabilities several times over, which is why it is so important to obtain financial support from both domestic and EU sources. 

[1] Act of 7 October 2022 on special solutions to protect electricity consumers in 2023 in connection with the situation on the electricity market. (Journal of Laws 2022, item 2127).

[2] Act of 27 October 2022 on emergency measures to cap electricity prices and support certain consumers in 2023 (Journal of Laws 2022, item 2243).

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