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Polish Government’s Proposed Maximum Electricity Prices: Legal Concerns and Unequal Treatment of Consumers

ENERGYPolish Government's Proposed Maximum Electricity Prices: Legal Concerns and Unequal Treatment of Consumers

“The European Parliament and the Council of the EU directive on common rules for the internal market in electricity has confirmed the prohibition of imposing maximum prices on the sale of electricity to consumers and micro-enterprises. The announcement of implementing such a mechanism after June 30, 2024, is not in compliance with the European Union law that has been implemented into our legal order,” says Paulina Grądzik, an expert from the Confederation of Leviathan.

All contracts for the sale of electricity in Poland are concluded by consumers based on mutual agreement and applicable laws. The legal possibility of intervening in the content of these contracts, particularly in terms of electricity prices, ceased at the latest by the end of 2023 with the expiration of Council Regulation (EU) 2022/1854 concerning emergency interventions to address the problem of high energy prices.

“Therefore, we point out the lack of any European legal basis for interventions in energy prices. Besides the financial penalties that the European Court of Justice could impose on Poland, another cost of such an intervention would be the necessity to pay compensation for all incurred costs by sellers who would be affected by the regulations on the maximum price of electricity sales,” adds Paulina Grądzik.

The Confederation of Leviathan also points out the potential unequal treatment of consumers who are parties to electricity sale contracts.

From August 2024, consumers will have the opportunity to enter into a contract for electricity sales with a so-called dynamic price, which means they will bear the full market risk of changes in electricity sales prices. At the same time, consumers from the same group (households) would also exist in the market who would be covered by protection in the form of maximum prices.

The enactment of government-proposed regulations that are non-compliant with EU law carries the risk of the European Commission initiating proceedings against Poland and imposing financial penalties.

Leviathan also expresses deep concern about the lack of public consultations on maximum prices. Their absence would contradict multiple government announcements about the intention to conduct an open dialogue with all stakeholders.

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