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 consumers connected to the NPS and interconnection exchange. It is also responsible for the transmission of electricity through the transmission grid and cross-border interconnections, which translates into PSE's responsibility for the transmission infrastructure, including the performance of operation, maintenance and overhaul work, as well as modernization projects and work to extend the grid.

The transmission grid must address changes resulting from, i.a., 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, but also from the developing cross-border exchange.

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 the transmission activities, i.e. operating costs and capital expenditures, are financed according to the principles set forth in the applicable legal 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 based on 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 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 2022, the PSE's tariff included the tariff fee rates:

  • calculated by the TSO based on the costs of the PSE's transmission activities and return on capital,
  • determined by the President of the ERO and not directly related to PSE's activities:

– a RES fee related to ensuring availability of electricity from renewable sources in the NPS;  

– a capacity fee related to remuneration for the standby service to supply electrical power to the power system and supply such 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 NPS;
  • 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 – a transitional fee related to the service of making the NPS 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 the relevant entities on the electricity market.

Structure of fees in the PSE’s Tariff applied for settlements in 2022

Fig. Structure of fees in the PSE’s Tariff applied for settlements in 2022 

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 (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.

Generating entities  do not pay the transmission fees for introducing 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.

Trading companies  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, including for example 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 DSO's purchase of transmission services from PSE. 

Structure of a consumer's electricity bill for a household in 2022

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. 3.8 percent of the average gross rate1 for households in 2022. The net rate of the support fees (capacity, transitional, co-generation and RES fees) was 9.5 percent of the average gross rate for households.

1 In accordance with the Act on Value Added Tax of March 11, 2004, electricity is taxed at a rate of 23%. In 2022, the rate was reduced to 5%.

Worth knowing

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

  • electricity price,
  • distribution service costs,
  • capacity fee.
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