Czech Energy Company Offers Relief to Customers Facing Price Hikes

As the Czech government’s caps on energy prices expire at the end of the year, customers with long-term fixed rates above the government’s ceiling face the prospect of a sudden price surge. This includes 160,000 of the largest domestic supplier, ČEZ’s customers. However, the company announced on Tuesday that these customers can switch to a lower tariff.

This year, these customers will not pay more than the current ceiling for energy prices and will be contacted by ČEZ gradually and repeatedly until the end of the year, whether via email, SMS, or phone. The company will allow customers to switch to an actively fixed product with falling prices without penalties, avoiding charges above the government ceilings next year.

The Czech government capped the price of electricity at CZK 6,000 per megawatt-hour (MWh), including VAT, for the entire year, while the maximum price for gas consumption was set at CZK 3,000 per MWh with VAT. However, these prices do not include distribution fees.

Although wholesale energy prices have been significantly below the price cap for several months, the government is not expected to extend the caps. Consumers with long-term fixed rates at high prices may be affected.

ČEZ has said customers with prices above the government ceiling can switch to a tariff with gradually decreasing prices. In the first year of the fixed rate, electricity and gas will be offered at approximately CZK 510 per MWh, cheaper than the government limits. In the following years, their prices will continue to decrease. According to ČEZ, these households will save CZK 8,000 per year on their electricity bills. Customers who have a fixed rate for gas and use it for heating can save up to CZK 27,000 annually.

The decision of ČEZ was welcomed by the Minister of Industry and Trade Jozef Síkela (STAN), who said that the company had responded to his informal appeal. “Around 160,000 customers will pay less for energy next year than they originally would have due to the Russian energy war. I am glad that they will avoid paying significantly higher amounts for energy than they did this year in case the government caps were lifted,” said the minister.

Innogy is also preparing a new solution for customers with fixed rates. “At this point, I can only say that we are preparing a solution for these customers, and we expect to present it in the coming weeks,” said ČTK spokesperson Martin Chalupský. The problem affects about 400,000 customers across the energy market, with Innogy accounting for about one-tenth of the 1.7 million customers.

Prague Energy (PRE) spokesperson Karel Hanzelka said the company had not offered fixed-price products since autumn 2021. “We pointed out that, in the long term, fixing a high price could be disadvantageous for customers. We have included a fixed-price product with a price below the government ceiling again in our offer only in March 2023,” added Hanzelka.