Energy Prices Deregulated from 2008

The Department for Energy Regulation (Urzad Regulacji Energetyki) informed that as of the beginning of 2008 the Department will no longer be regulating energy prices.
This decision comes as a result of changes in June this year. Since June, consumers have been able to purchase energy from wherever they choose. Prior to June consumers were restricted to electrical companies assigned to them as a result of their residential address.

Adam Szejnfield, senator for the Civic Platform (PO) claims this decision needs to be withdrawn, reports Rzeczpospolita. The URE director Adam Szafranski disagrees with him and claims withdrawing any deregulation decisions would be “irresponsible.”
According to experts deregulation would mean an increase in energy prices. Rates may rise by 10 to 15 percent meaning an increase in annual energy bills by 5 to 7 percent for the average household. The industrial sector, which uses up 80 percent of Poland’s energy, would also be hard hit. This in turn would see the rise of goods and services prices.

Szejnfeld claims the decision of the URE director was too rash and undertaken without any consultation from appropriate bodies. The market and its consumers are not ready for such drastic changes claims the senator. In his statement Szejnfeld pointed out that “the last days of the outgoing government cannot be spent on undertaking decisions that may have significant impacts.” He appealed to the URE director to withdraw the decision.

Szafranski told the Rzeczpospolita that the decision was “thoroughly thought through.” He agrees with the view that the sale of energy on the free market does not function how it should and it is therefore difficult to speak positively of the competition entering that market.

He adds however that unless the state deregulates pricing there cannot be any competition on the market. Szafranski assures the deregulation alone will not cause the increase in rates.
“Energy prices will increase due to the investments made by power plants. And this would have happened sooner or later, regardless of whether there was price regulation or not,” he suggests.

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