Heating prices are rising. The President of the Energy Regulatory Office is waiting for further tariff applications

– It is up to enterprises whether and when they will submit applications to the regulator to change tariffs. The entrepreneurs also determine the level of costs used in tariff calculations presented in these applications, says Rafał Gawin, President of the Energy Regulatory Office. At the end of October 2022, another one increases in heating charges was introduced by Gdańskie Przedsiębiorstwo Energetyki Cieplnej. Further increases in Okręgowe Przedsiębiorstwo Energetyki Cieplnej in Gdynia are possible.

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In Poland, tariffs are applied near 400 licensed heating companies, and tariffs for individual companies are valid in different periods – hence their approval is a continuous process, spread over the entire year (and not, for example, as in the energy market at the end of the year for the new calendar year).

The Energy Regulatory Office issues tariff decisions for heating companies on an ongoing basis, in response to the tariff applications submitted to the Office, prepared by enterprises.

• prices for the ordered heat capacity expressed in PLN per MW;
• heat prices expressed in PLN per GJ;
• prices of the heat carrier – water supplied for filling and replenishment of its losses in receiving installations or non-returned condensate, expressed in PLN per cubic meter or per ton, respectively.

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The President of the Energy Regulatory Office approves tariffs for heating companies

It operates jointly on the Polish heat market 379 entities. In terms of the number of sources, heating plants dominate – there are them 246 (which is 64.9 percent). However, they only produce approx. 37 percent total heat.

The President of the Energy Regulatory Office conducts tariff proceedings, examining whether the tariffs applied for by entrepreneurs meet the legal requirements and present only reasonable costs together with a justified amount of return on capital employed in the economic activity related to heat supply.

– Justified costs are not the same as accounting costs – he explains Rafał Gawin, head of the ERO. – In tariff proceedings, we always follow what is currently happening in the market environment and compare the costs of companies with the same business profile.

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A refusal to approve a new tariff or a tariff change takes place when, in the opinion of the regulator, the costs presented by the company in the tariff application are not justified or when the tariff presented for approval was calculated by the company inconsistently with the principles and requirements set out in the Energy Law and the Tariff Regulation.

Heat prices limited by law

From October 1, 2022, heat consumers will use heat prices limited by the act, which entered into force on September 20, and aims to reduce the negative social effects caused by the energy crisis and the risk of a significant increase in energy poverty. Until April 30, 2023, i.e. until the end of the heating season, heat generators will be required to apply a limited average price for heat with a compensation that may not be higher than (net):

• for heat sources powered by gas and fuel oil – PLN 150.95 / GJ,
• for other sources – 103.82 PLN / GJ.

The lower price of heat will apply to the so-called eligible customers, i.e. where the heat is intended for residential and public utility purposes. The President of the ERO will continue to approve tariffs for heat to licensed enterprises, including heat prices and rates, which the enterprises will convert into a single-component heat price, i.e. the average price of heat generation.

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If the tariff company receives a single piece price higher than 150.95 PLN / GJ for gas and fuel oil heat sources or 103.82 PLN for other sources, it will be obliged to use this price in settlements with customers, and for the difference between the single-component price from the tariff and the “with compensation” price, it will report to the Settlement Administrator, who will pay the entrepreneurs the due funds.