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How to reduce electricity costs – support option for entrepreneurs

If you are a micro, small or medium-sized entrepreneur, remember that you can benefit from support in the form of a reduction in electricity price for entrepreneurs in 2023. Read the brief information below to determine whether and how you can apply for this form of assistance.

On November 4th, 2022, the Law of October 27th, 2022 on emergency measures to limit the amount of electricity prices and support for certain consumers in 2023 entered into force. The above Act provides for the possibility of providing support to the following groups of entrepreneurs:

  • micro-entrepreneurs,
  • small entrepreneurs,
  • medium-sized entrepreneurs,

defined in accordance with Art. 7, par. 1-3 of the Entrepreneurs Law.

The law provides for the application of a maximum price of PLN 785/MWh (amount excluding VAT) in the period from December 1st, 2022 to December 31st, 2023.

In order to be able to take advantage of such assistance, a statement (in paper or electronic form) must be submitted by an eligible customer to its electricity supplier.

The deadline for submitting the statement is November 30, 2022, if you want to apply lower prices as early as December 2022. Submission of the statement after the deadline results in the application of the maximum price only from the next month after the month in which the statement was submitted.

In addition, it should be noted that the statement introduces a new fixed price of electricity for the customer for a certain period. Potentially, this has an impact both on our tax settlements, because it is not a market price, and on contractual obligations (the CPPA issue). In addition, the regulations indicate that for customers who have entered into a sales contract or there has been a change in the contract or there has been a change in the price after February 23, 2022, the maximum price also applies to settlements covering the period from the date of that contract or from the entry of the changes until November 30, 2022, which may also result in an adjustment of the customer’s tax revenues or expenses.

At the same time, due to the reduction of electricity prices, the Act provides for compensation for electricity suppliers. Compensation is due for the application of the maximum price for the period from the date an eligible customer exceeds the electricity consumption limit until December 31, 2023. The amount of compensation is to be the product of the amount of electricity consumed in a given month and the difference between the reference price and the maximum price for each consumption point. Requests for advance compensation payments must be submitted to the Zarządca Rozliczeń S.A. by the 25th of the month following each month to which the settlement applies. The first advance payments will already apply to December 2022 and January 2023, so please note that applications for these months must be submitted by the following deadlines: from December 1 to 9, 2022 for December 2022, and from January 2 to 9, 2023 for January 2023. If the application is positively verified, compensation should be paid within 30 days of receipt of a properly prepared application. Pursuant to the Act, the compensation will constitute revenue for the eligible entity from the sale of electricity or services, so it is worth paying attention to how such compensation should be taxed.

If you are looking for support in reducing energy costs in your business or have doubts about how to account for the above assistance as an electricity consumer or supplier, please contact our experts.