Are the new electricity price limits illegal? (COMMENT)

Luc Williams

On Tuesday, information on the subject was published in the list of legislative and programmatic works of the Council of Ministers the proposed act on energy vouchers and amending certain other acts. Minister of Climate and Environment Paulina Hennig-Kloska announced on Wednesday that new regulations intended to extend protective measures in connection with energy prices would enter into force on July 1, 2024, and maximum electricity price in the amount of PLN 500 per MWh will apply to all households.

The Lewiatan Confederation is sounding the alarm

“The announcement of the introduction of such a mechanism after June 30, 2024 is inconsistent with European Union lawwhich has been implemented into our legal order,” said Grądzik, quoted in Wednesday's press release from the Lewiatan Confederation.

Expired regulation and threat of compensation

The expert noted that any energy sales agreements are concluded by consumers in Poland based on the will of the parties and applicable regulations, so the legal possibility of interfering in the content of contracts ceased to apply at the latest at the end of last year, with the expiry of Council Regulation (EU) 2022/1854 on emergency intervention to address high energy prices. In her opinion, there is no basis for this legal interference in energy pricesand such actions may result not only financial penalties imposed on Poland by European Court of Justicebut also an order to pay compensation for damage suffered by energy sellers.

Lewiatan Confederation indicated in the announcement the possibility of unequal treatment of consumers, who will have the opportunity to conclude contracts from August contracts with “dynamic pricing”which would mean that there will be entities on the market that bear the entire risk resulting from changes in electricity prices and entities that are protected by maximum prices.

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