Regulation of electricity utilities – sales of power

Approval to sell power

What authorisations are required for the sale of power to customers and which authorities grant such approvals?

In general, the sale of electricity to customers (both household and commercial) requires an energy trading licence, or with regard to generators selling electricity produced in their own units - electricity generation licence. The energy licences are granted by the president of the ERA, upon verifying that the applicant meets the requirements set out in the Energy Law (ie, has its seat in the EU, Switzerland, a European Free Trade Association (EFTA) member country, or Turkey, and has technical and financial capacity to ensure proper performance of a given energy activity).

There are some exceptions from the obligation to hold an energy licence. An electricity trading licence is not required for trading in electricity through a less than 1kV installation owned by the energy customer, or trading on the Polish Power Exchange (PPE). However, if the entity intends to trade in electricity on the PPE on its own (ie, not through a broker), it is obliged to become a member of the PPE.

Power sales tariffs

Is there any tariff or other regulation regarding power sales?

Licensed entities are obliged to apply tariffs approved by the president of the ERA, unless specifically exempted under the Energy Law or through an individual decision of the president of the ERA. However, under statements issued by the president of the ERA in 2001, 2007 and 2008, the obligation to submit tariffs for approval of the president of the ERA, generally does not apply to entities holding a licence for trading in electric energy. In accordance with those statements, the obligation to apply tariffs approved by the president of the ERA pertains only to the supply of electricity to household customers by entities that have the status of ex officio (last resort) suppliers. In light of the above, companies that do not hold the status of ex officio suppliers and do not deliver electricity to household customers, are not obliged to apply tariffs approved by the president of the ERA, and thus are free to determine the price at which they sell electricity to customers.

Rates for wholesale of power

Who determines the rates for sales of wholesale power and what standard does that entity apply?

Wholesale trading in electricity has been exempted from the obligation to submit tariffs for approval of the president of the ERA. As regards wholesale trading on organised markets (eg, balancing market and PPE), the prices are determined on a market basis, but may be subject to some limitations in accordance with internal regulations. In particular, the rules for price setting on the balancing market are - in some aspects - regulated in the transmission network code.

Public service obligations

To what extent are electricity utilities that sell power subject to public service obligations?

The ex officio (last resort) sellers are obliged to render the universal service (which covers sale of electric energy and its delivery with the use of transmission or distribution services) on the equal treatment basis to all household customers that do not choose another supplier and are connected to the grid where the relevant electricity utility has been appointed the ex officio supplier. The last resort suppliers are appointed by the president of the ERA in a tender or appointed ex officio in the case of an unsuccessful tender.

In addition, electricity generators (with certain exceptions) are obliged to sell no less than 30 per cent of electricity generated through the PPE. Recently, plans to increase the above obligation to 100 per cent of generated electricity have been announced by the Minister of Energy.