Overcharged?

On January 1, RWE Stoen increased electricity prices in Warsaw by 16.6 percent to reach zł.0.1696 per kilowatt hour (kWh). For a household using 2,200 kWh per year, the step will increase the electricity bill by zł.73.20 per year. RWE Stoen, a subsidiary of German power giant RWE, is the largest electricity supplier in Warsaw and its outskirts with some 900,000 customers. Stoen's competitor Vattenfall has also announced plans to raise prices, by around five percent.

Poland's Energy Regulatory Office (URE) voiced an objection to the decisions, claiming that both of the suppliers should have applied for a permit.

Such objections will not save Poland from growing energy prices, however. The average price of electricity in the country - EUR 12 (zł.43) per 100 kilowatt-hour - is well below than EU average of EUR 15.28 (zł.54.87). "We are  part of a global economy and it is impossible to maintain artificially low prices," Sobieski Institute analyst Tomasz Chmal told WBJ.

There are several major factors responsible for the rising price of electricity, Chmal said. These include the increase in the use of renewable energy as required by the EU, the growing costs of CO2 emissions and the higher price of coal.

The energy and electricity sectors also require investment to increase capacity. This process will be all the more painful since Poland has neglected such investments over the last 20 years.

To minimize the effects of rising prices, the state should develop a proper third-party-access policy which could grant more suppliers access to infrastructure facilities, said Chmal. It should also build an infrastructure network to buy energy from other countries, and needs to adopt a much longer perspective in the shaping of energy policy, he added, stressing that the state's policy to date may have serious consequences for the future.

"We have passed the 11th hour," he said.