IMPACT ON SOCIETY AND EMPLOYEES (S)PSE operations vs. transmission tariff and electricity bills

Transmission tariff and electricity bills

As the only TSO in Poland, our company is responsible for the transmission of electricity to consumers throughout the country. For PSE, this means responsibility for the transmission infrastructure, and the need to perform operational, maintenance, overhaul, modernisation and expansion works. The transmission grid must address changes resulting from, among other things, an increase in the demand and the structure of electricity consumption in the country, as well as changes in the structure and location of generating sources, including RES.

Maintaining the required quality parameters of the supplied electricity and ensuring the safety of the NPS operation involves the need to purchase system services provided by electricity producers.

Expenditures related to transmission activities, i.e. operating costs and capital expenditures, were financed according to the principles set forth in applicable legal regulations, and the expenditures are covered with revenues from the provided transmission services, received on the basis of the company's Tariff approved by the President of ERO.

The company's Tariff is a set of prices and fee rates as well as the terms and conditions for their application, prepared annually based on planned, justified costs of business, and the return on capital employed in the transmission activities to finance investment projects. The costs forming the basis for the calculation of the transmission service fees are subject to an assessment by the President of the ERO, who approves the Tariff in the course of the administrative proceedings.

In 2021, the PSE's tariff included the tariff fee rates:

  • calculated by the TSO based on the costs of PSE's transmission activities and return on capital;
  • determined by the President of ERO and not directly related to PSE's activities:
    - a RES fee related to ensuring the availability of electricity from renewable sources in the Polish Power System; in 2021, the RES fee rate was PLN 2.20/MWh,
    - a capacity fee related to remuneration for the service of maintaining readiness to supply electrical power to the power system and supply that power to the system during periods of emergency;
  • determined by the minister responsible for energy and not directly related to PSE's activities – a co-generation fee related to ensuring availability of electricity from high-efficiency co-generation in the Polish Power System – in 2021, the co-generation fee was PLN 0.00/MWh;
  • defined in the Act on the rules for the compensation of costs incurred by generating entities in connection with early termination of long-term agreements, not directly related to PSE’s activities – a transitional fee related to the service of making the Polish Power System available.

Revenues from the capacity, RES, co-generation and transitional fees collected by PSE are transferred in full to the Settlement Body for further redistribution to electricity generators.

Structure of fees in the PSE Tariff applied for settlements in 2021

Fig. Structure of fees in the PSE tariff used in settlements in 2021

According to the Polish electricity market model, PSE settlements for transmission services are made with consumers physically connected to the transmission network in the territory of Poland, i.e:

  • distribution system operators (DSO), for which the costs of purchasing the services from PSE constitute justified business costs, and are included in the calculation of their tariffs for electricity distribution services,
  • end users.

Therefore, the aforementioned consumers physically connected to PSE's network bear the entire costs included in the calculation of transmission fee rates.
Generating entities do not pay the transmission fees for introducing electricity into the network. They only pay a quality fee for the amount of electricity consumed by the end users connected to their network, systems and equipment, to whom they sell electricity.

Trading companies do not pay any tariff fees to PSE with the exception of the market fee applied only to electricity imported to Poland from Ukraine.

Worth knowing

In the case of consumers connected to the distribution network (the network owned by the DSO), including for example households, the cost of electricity supply, in addition to the costs related to the DSO’s business, also includes the PSE’s business costs, i.e. the costs related to the DSO's purchase of transmission services from PSE.

The costs of PSE S.A. on electricity bills

Worth knowing

The average net rate of the fee for the transmission services provided by PSE (excluding the rates of support fees, i.e. excluding the capacity, transitional and RES fees, as well as the co-generation fee, which in 2021 was PLN 0.00/MWh) was in 2021 only approx. 4.1 percent of the average gross rate for households. The net rate of the support fees (capacity, transitional, co-generation and RES fees) was 6 percent of the average gross rate for households.

Structure of a consumer's electricity bill for a household in 2021.

Worth knowing

The amounts of bills for households are mainly influenced by the following:

  • electricity price,
  • distribution service costs,
  • Value Added Tax.
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