The European Commission expects the Polish government to submit its new legislation cutting taxes on electricity for European Union scrutiny to check if it complies with the State Aid rules. The new law was passed at the end of December 2018 and will be notified for the EC shortly before coming into force.
This law is meant to help keep 2019 power prices at the level seen in the first half of 2018. Polish domestic wholesale power prices are currently on the rise (+65%), mostly driven by rising coal prices and carbon emission costs, as the country generates most of its electricity from coal-fired power plants. Consequently, state-owned power utilities requested to raise residential electricity tariffs by more than 30% in 2019 to offset soaring wholesale prices. To avoid a final price increase, the law stipulates that the excise tax paid by domestic power consumers will be cut from PLN20/MWh (€4.66/MWh) to PLN5/MWh (€1.17/MWh).
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