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    Freezing Energy Prices: Anticipated Drop in Tariff Rate

    The President of the Energy Regulatory Office (URE) in Poland approved tariffs for the sale of electricity and gas in 2024 on Friday. The approved tariffs reveal a noteworthy reduction in prices, with electricity tariffs dropping by an average of 31%, and gas tariffs experiencing a 34% decrease. Consumers, however, will not feel the impact of these changes if energy prices remain frozen.

    URE President greenlit the tariffs for the sale of electricity to households through four designated suppliers: PGE Obrót, Tauron Sprzedaż, Enea, and Energa Obrót. Additionally, the regulator approved tariffs for the five largest electricity distributors (OSD): PGE, Tauron, Enea, Energa, and Stoen Operator.

    The approved energy prices in the suppliers’ tariffs for 2024 are 31.3% lower compared to the tariffs approved for 2023. This reduction is attributed to the decreasing wholesale market prices compared to the contract prices set in 2022. The stabilization of raw material markets, such as coal and gas, contributes to lower volatility in electricity prices in the wholesale market, according to the regulator.

    In contrast, distribution tariffs for electricity will increase by an average of about 2.9%, a decision directly linked to the need for businesses responsible for network infrastructure to bear investment costs for the expansion and modernization of transmission and distribution networks. Additionally, the increase in the tariff for the transmission system operator, Polskie Sieci Elektroenergetyczne, and inflation factors into distribution tariffs, as explained by URE.

    The decrease in approved tariffs for 2024 does not automatically translate into reduced bills for consumers covered by the price freeze, including those subject to tariff freezes. To maintain the current price freeze for specific consumers, a law awaits the president’s signature, extending the freeze on electricity and gas prices for the first six months of 2024 to the 2023 level.

    The tariffs approved for electricity in 2023 were not applied for settlements with consumers in the current year due to the statutory price freeze. Consumers pay 412 PLN per MWh up to specified energy consumption limits, and beyond these limits, the rate is 693 PLN per MWh. The same rules for the next year are outlined in the law awaiting the president’s approval.

    In 2024, the gas price in the tariff of the largest retail seller, PGNiG Obrót Detaliczny, for households and other eligible consumers, will be 318.14 PLN per MWh in the most popular tariff groups, compared to the current tariff of 484.47 PLN per MWh. This marks a 34% decrease but does not imply a reduction in bills for consumers covered by the price freeze, including those under tariff freezes. President of URE, Rafał Gawin, reminded that the existing gas price limit of 200.17 PLN per MWh is maintained in the law awaiting the president’s signature.

    The regulator also approved the distribution tariff for natural gas for the largest distribution system operator, Polska Spółka Gazownictwa. On average, distribution fee rates increase by 5% compared to the average rate from the 2023 tariff. URE highlighted that in the distribution tariff, the amount of fixed and variable fees varies depending on the tariff group and distribution area, of which there are six in PSG, as well as the type of gas.

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