Radosław Wasiak, Karol Czuryszkiewicz

Deregulation of Wholesale Gas Prices in Poland

On 19 February 2013, the Energy Regulatory Office Chairman issued a statement on the exemption from the obligation to submit for approval wholesale natural gas market tariffs.

As a result, energy companies which hold a gas trading license will not be required after getting the exemption to apply for approval of their tariffs to the Energy Regulatory Office.

The requirement to submit tariffs for approval arises from the provisions of the Energy Act of 10 April 1997 (Journal of Laws of 1997, No. 54, Pos. 348). In accordance with its Article 47, energy companies holding a license set tariffs for gaseous fuels (…) which are subject to approval by the Energy Regulatory Office Chairman.

However, according to Article 49 of the same Act, the Energy Regulatory Office Chairman may exempt an energy company from the obligation to submit tariffs for approval if he finds that it operates in conditions of competition.

Mindful of the effects of past efforts to introduce competition mechanisms in the gas market, the Energy Regulatory Office Chairman said that the wholesale gas market meets the criteria of a competitive market. Therefore, according to the Energy Regulatory Office statement, “keeping the requirement to have wholesale tariffs approved may hinder further growth of the wholesale market liquidity.”

Tariff approval exemption decisions will be issued on a case by case basis to each gas wholesaler individually.

At the same time, the ERO Chairman stated that the exemption from the obligation to submit tariffs for approval would not apply to companies whose tariffs have already been approved.

After the expiry of the period of the current tariff being in effect, the company (upon receiving a prior exemption) will not be obligated to submit its subsequent wholesale tariff for approval.

The exemption from the obligation to submit tariffs for approval will not apply to businesses that sell natural gas to industrial customers.

Radosław Wasiak and Karol Czuryszkiewicz, Energy Sector Practice Group, Wardyński & Partners