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IMPACT ON SOCIETY AND EMPLOYEESPSE operations vs. transmission tariff and electricity bills

Transmission tariff and electricity bills

Our company, as the only TSO in Poland, is responsible for maintaining quality parameters in the NPS, enabling the supply of electricity to customers connected to the NPS and cross-border exchange. PSE is also responsible for the transmission of electricity through the transmission grid and cross-border interconnections, which translates into our responsibility for the transmission infrastructure, including the performance of operation, maintenance and repair work, as well as modernisation projects and work to expand the grid. The transmission grid has to cope with changes resulting from factors such as an increase in the demand for energy and the structure of energy consumption in the country, as well as changes in the structure and location of generating sources, including RES, but also from developing cross-border exchange.

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

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

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

In 2023, PSE SA Tariff contained 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 the ERO and not directly related to PSE’s activities:
      • RES fee related to ensuring the availability electricity from renewable sources in the NPS; in 2023, the RES fee rate was PLN 0.00/MWh,
      • capacity fee related to remuneration for the standby service to supply electrical power to the power system and to supply such power to the system during periods of demand in the capacity market,
    • determined by the minister in charge of energy and not directly related to PSE’s activities – cogeneration fee related to ensuring the availability of electricity from high-efficiency cogeneration n the NPS; in 2023, the cogeneration fee rate was PLN 4.96/MWh,
    • defined in the Act on the rules for the compensation of costs incurred by generators in connection with the early termination of long-term agreements – a transitional fee related to the NPS access service.

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 the relevant entities on the electricity market.

Structure of fees in PSE’s Tariff applied for settlements in 2023

Fig. 1. Structure of fees in PSE’s Tariff applied for settlements in 2023

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

  • distribution system operators (DSOs), for whom 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.

Generators do not pay transmission fees for feeding electricity into the grid. They only pay a quality fee for the amount of electricity consumed by the end users connected to their grid, systems and equipment, to whom they sell electricity.

Traders do not pay any tariff fees to PSE, with the exception of the market fee applied only to the exchange of electricity by these companies between Polish and Ukrainian systems.

Worth knowing

For consumers connected to the distribution network (DSO network), such as households, the cost of electricity supply, in addition to the costs related to the DSO’s activities, also includes the cost of PSE’s activities, i.e. the costs related to the purchase of transmission services by the DSO from PSE.

Structure of the household consumer’s electricity bill in tariffs approved by the President of the ERO for 2023

Chart. 1. Structure of the household consumer’s electricity bill in tariffs approved by the President of the ERO for 2023 (in percent).

Worth knowing

The average net rate of the fee for transmission services provided by PSE (excluding rates for support fees, i.e. capacity, transitional, RES and co-generation fess) was only approx. 3.0 percent of the average gross rate for households in 2023 in tariffs approved by the President of the ERO.4

The net rate of the support fees (capacity, transitional, co-generation and RES fees) was 4.0 percent of the average gross rate for households.

4In accordance with the provisions of the Act of 7 October 2022 on special solutions for the protection of electricity consumers in 2023 in connection with the situation in the electricity market (Journal of Laws of 2022, item 2127, as amended), the net prices and tariffs resulting from the tariffs approved for 2022 for eligible consumers (including households) were applied in settlements with these consumers in 2023 up to the limits of energy consumption specified in the Law. For eligible end users who consumed electricity above the maximum electricity consumption limits set forth in the above-mentioned Act, the maximum price of PLN 693/MWh was applied in accordance with the Act of 27 October 2022 on emergency measures to reduce electricity prices and support for certain consumers in 2023 (Journal of Laws of 2022, item 2243, as amended). As a consequence of the above, the average sales price for households was lower than the average price resulting from tariffs approved by the President of the ERO.

Worth knowing

The bill amount for households is mainly influenced by:

  • electricity price,
  • distribution service costs,
  • value added tax.

Living in the vicinity of power lines

PSE’s priorities for HR development

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