On 20 December 2022, the Official Journal of the Republic of Poland printed the slightly awkwardly titled Act of 15 December 2022 on Particular Safety of Sure Gasoline Gas Customers in 2023 Because of the Gasoline Market State of affairs (Gasoline Costs Capping Act). On this authorized alert, we’ll have a look at the primary guidelines supposed to guard eligible prospects towards spikes in gasoline costs, fee of compensation to eligible suppliers, in addition to amendments to the Power Legislation (EL) which might be more likely to have an effect on the marketplace for corporations producing power from renewable sources (RES Companies).
Table of Contents
Fundamental tenets of the Gasoline Costs Capping Act
The rationale for the Gasoline Costs Capping Act is actually to attenuate will increase within the costs of pure gas-based fuels for sure teams of shoppers, to reinforce power safety within the gasoline market, whereas on the identical time sustaining the liquidity of power undertakings. The regulatory mechanisms put in place are just like these already launched by parliamentary acts enacted in October and November of 2022 to guard electrical energy customers and to cap costs within the electrical energy market.
In line with the official web site of the Polish president and the specific wording used within the assertion of causes for the draft invoice, the Gasoline Costs Capping Act will put in place in 2023 a mechanism designed to assure that protected prospects of gasoline fuels and offtakers performing tariff-included public utility duties pay capped costs for gasoline fuels and that the gasoline gasoline distribution charges stay at ranges not larger than these charged in 2022. Furthermore, protected prospects of gasoline fuels will stand eligible to obtain VAT refunds.
On the identical time, in an effort to stability the pursuits of gasoline market members:
- The mechanism put in place to compensate gasoline gasoline sellers for the results of caps placed on tariff-based costs charged to end-users is maintained.
- A parallel compensation mechanism for gasoline gasoline distribution system operators has been launched.
- Mechanisms designed to watch public funds spending have been stepped up.
Various adjustments have additionally been launched to the EL, together with with regard to grid connection of renewable power installations. So far as the RES market is anxious, the amendments are anticipated to considerably streamline and enhance the flexibility of each customers and mills to attach on commercially possible phrases, in addition to to make the complete course of extra clear.
Main adjustments for the gasoline gasoline market
Article 1 of the Gasoline Costs Capping Act stipulates that the aim of the brand new laws by way of gasoline market options is primarily to control the next points:
- The utmost worth for gasoline fuels and the charges for gasoline gasoline distribution companies for use in settlements with eligible offtakers in 2023;
- Guidelines and procedures for awarding and paying compensation for the caps placed on gasoline gasoline costs and/or charges for gasoline gasoline distribution companies for power undertakings;
- Guidelines and procedures for refunding VAT on paid invoices documenting the provision of gasoline fuels from 1 January to 31 December 2023 to gasoline gasoline prospects;
- Guidelines and procedures for imposing the duty to make a contribution to the Value Distinction Compensation Fund.
The group of eligible prospects below the Gasoline Costs Capping Act consists of these consuming gasoline fuels for broadly outlined residential wants, in addition to prospects within the healthcare, social welfare, training and NGO sectors, to call just some.
From 1 January to 31 December 2023, an power endeavor (i.e. corporations eligible for compensation) is obliged to cost as a most worth PLN 200.17/MWh in settlements with eligible prospects. The scenario is completely different if the gasoline gasoline provide contract is signed between an eligible endeavor and an eligible buyer after 31 December 2022. On this case, the Gasoline Costs Act offers for costs which might be extra favorable than the utmost worth. In such an occasion, the contracted costs will apply throughout the contract time period, and the power endeavor won’t be eligible for compensation.
Likewise, the identical guidelines will apply for eligible undertakings if in 2023 they use a gasoline gasoline tariff permitted by the president of the Power Regulatory Workplace (ERO President), who units gasoline gasoline costs at a degree under the utmost gasoline gasoline costs. The decrease costs will then apply, and no compensation shall be due. If adjustments are made to the tariff at any time between 1 January and 31 December 2023, the eligible endeavor could, in precept, apply for compensation for the interval beginning as on the tariff replace date. On this case, compensation shall be calculated pro-rata for so long as the revised tariff is in impact.
In its settlements with prospects, an power endeavor conducting enterprise involving commerce in gasoline fuels is required to use payment charges apart from the gasoline gasoline worth, referred to as “frozen costs.” These charges can’t be larger than these in impact on 1 January 2022 and can apply till 31 December 2023. Notably no compensation is because of power undertakings charging these charges.
A typically comparable answer has been adopted for DSOs conducting enterprise actions associated to distributing gasoline fuels for consumption by eligible prospects who’ve an permitted and efficient gasoline gasoline tariff, within the tariff supposed to be used in 2023 (or any a part of this 12 months). When billing distribution companies that have been supplied in 2023, they’re additionally required to make use of the distribution service charges supplied for within the final gasoline gasoline distribution companies tariff utilized in 2022.
Compensation shall be paid for every calendar month on the premise of functions filed by eligible undertakings to Zarządca Rozliczeń S.A. That mentioned, functions for January 2023 could also be filed no sooner than 15 February 2023. Zarządca Rozliczeń S.A. will course of the functions and make the compensation payouts.
Conversely, every pure gasoline manufacturing firm is obliged to make a contribution to the Value Distinction Compensation Fund for the given calendar month by the twentieth of every month following the settlement month.
Most necessary amendments to the EL affecting the electrical energy market
Amendments to Article 7 EL (re: connection of RES Companies to the ability grid)
If an power endeavor refuses to attach a consumer for financial causes, the endeavor is required to ship a requisite discover to the ERO President and the social gathering, offering the estimated connection payment and on the identical time advising the events of their proper to request the endeavor to elucidate the way it calculated the payment. If that’s the case requested by the grid connection applicant, the power endeavor has 14 days to reveal the payment calculation methodology and supply important particulars of the capital expenditures adopted within the calculation. This additional develops the third-party entry (TPA) precept beforehand enshrined in Article 7 and carried out, amongst different issues, by EU Directive 2019/944, and will increase the transparency of actions taken by power undertakings in disputes with prospects they connect with the grid.
If a micro-installation with an electrical energy storage facility is linked to the distribution grid, the put in capability of the electrical energy storage won’t be counted in direction of the entire put in capability. This is applicable so long as the put in capability of the power storage facility and the entire energy that may be fed into the distribution grid by this micro-installation and the storage usually are not better than the put in electrical capability of the micro-installation. This modification appears to be fairly an attention-grabbing growth since DSOs, when refusing to challenge a connection phrases doc or signal a connection settlement as requested, will usually justify their actions by attributing it to grid congestion brought on by, amongst different issues, power storage amenities working in discharge mode. They often deal with them equally to conventional producing models.
Entities making use of for grid connection will now be capable of assemble and/or develop grid sections essential to attach their installations in session with the power endeavor. It is a controversial answer since it’s typically the duty of the power endeavor conducting the enterprise of transmission and/or distribution of gasoline fuels or power to make sure implementation and financing of grid development and enlargement works. This additionally applies to the connection wants of these making use of for a grid connection. The duty to retrofit the ability grid can also be counted as a professional enterprise expense for the needs of processing tariff functions filed by power undertakings. That mentioned, from a practical viewpoint, this answer is more likely to have a optimistic impact on the funding course of length and mitigate the dangers of interconnection disputes with DSOs.
New Article 49aa EL (expanded contract reporting obligation previously supplied for in now-repealed Article 49a EL)
An power endeavor conducting enterprise actions within the scope of electrical energy era is required to supply the ERO President with info on contracts or company group settlement agreements whereby it sells, buys or settles electrical energy. The notification deadline is seven days from the settlement execution date.
The reported info should embrace the names of events to the contract or settlement, the amount and worth of electrical energy and the interval for which the contract or settlement was entered into. Based mostly on the reported information, the ERO President will publish the typical quarterly worth of electrical energy within the ERO Bulletin inside 21 days from the top of every quarter.
Amendments to Article 56 EL (money penalties)
If an power endeavor:
- for no justified purpose, delays sending a discover to the ERO President or the entity involved to advise them of its refusal to execute an settlement or to offer high precedence to a connection request filed by a RES set up proprietor, the money penalty is at least PLN 10,000 and not more than 15 % of the fined endeavor’s revenues within the earlier tax 12 months;
- doesn’t fulfill such obligations as, e.g. the duty to supply a payment estimate if refusing a service on financial grounds, and/or to elucidate affordable calculation strategies for the estimate, the high-quality shouldn’t be lower than PLN 30 per 1 kW of the connection capability indicated within the grid connection utility;
- doesn’t present the ERO President with info on the contracts or agreements relating to company group settlements whereby it sells, buys or settles electrical energy, by the deadline (as mentioned above), the high-quality is at least PLN 10,000 and not more than 15 % of the fined endeavor’s revenues within the earlier tax 12 months.
Extra regulatory adjustments launched by the Gasoline Costs Capping Act
Article 61 of the Gasoline Costs Capping Act amends the Power Legislation and RES Act Amendments Act of 29 September 2022 (Journal of Legal guidelines, merchandise 2370) (This was a one-off modification abolishing the “energy alternate obligation” (obligo giełdowe)). The adjustments have been designed to regulate deadlines for implementation of the reporting obligation then in impact in conditions the place an influence era firm offered electrical energy in any other case than through commodity exchanges.
Consequently, the beforehand efficient deadline by which power undertakings have been required to supply the ERO President with info on the gross sales contracts they signed (i.e. seven days after the contract execution date), which had not expired earlier than the Gasoline Costs Capping Act’s entry into drive, expired inside seven days of the efficient date of the Gasoline Costs Capping Act, i.e. on 28 December 2022.
As for the RES Act, the amendments in Article 44 of the Gasoline Costs Capping Act prolong deadlines related to public sale obligations.
Along with the foregoing, the Gasoline Costs Capping Act introduces amendments to quite a lot of different statutory legal guidelines, together with the Private Earnings Tax Act, the Excise Tax Act, the Development Legislation, the Setting Safety Act, the Gas High quality Monitoring and Inspecting System Act, the Electromobility Act, the Offshore Act, and the Electrical energy Costs Capping Act.
In accordance with Article 89, the Gasoline Costs Capping Act entered into drive as of the day immediately following its date of publication, i.e., on 21 December 2022, save for a handful of Articles of the Gasoline Costs Capping Act, which entered into drive on 1 January 2023, and sure laws relating to the Offshore Act, which can take impact on 1 January 2024.
The Gasoline Costs Capping Act is out there on the following hyperlink: