Power prices to remain virtually unchanged in 2016, says regulator

Czech consumers can expect to pay a fraction less for natural gas next year while electricity prices are set to remain more or less the same in 2016, according to announcements made on Thursday by the Energy Regulatory Office.

Photo: European Commission

The ERO said there would be an increase in the regulated part of the price of electricity, which includes the cost of transfer and distribution. However, end users will not register that rise as it will be offset by a reduction in the market price.

The change in the regulated price will differ in individual regions based on a number of factors. These include the distribution price, the character of supply and the amount of power consumed, the ERO said.

Another fact influencing end price will be choice of baseload electricity supplier, which influences the unregulated part of the price. The regulated part accounts for over half of the end price. The price of baseload electricity is set by suppliers.

The chairwoman of the Energy Regulatory Office, Alena Vitásková, said she was glad that a time when regulated prices were growing at a clip in Europe the Czech Republic had managed to keep prices within reasonable limits; the average price increase in 2016 will be no more than 3 percent, she said.

As regards gas, the regulated part accounts for around a quarter of the final price. The ERO has increased this by over 5 percent on average for households and small buyers.

However, with regard to wholesale market trends the agency expects the size of the unregulated part to fall by 3 to 5 percent. Total savings on gas could then reach 1 to 2 percent, it said. Large consumers can expect to save more.

The unregulated part of the gas price was impacted by the mild winter at the start of the year. This caused lower consumption, meaning distribution companies took a hit. Ms. Vitásková said the ERO had had to compensate them for the shortfall in line with the binding legal rules.

Ms. Vitásková also said that on one hand energy companies were making increased demands as regards ensuring the security of supplies; on the other the ERO wants to make sure prices remain low. This requires “laboratory scales-type” balance, Ms. Vitásková said.

Her deputy Jan Nehoda said costs arising from protecting the energy infrastructure would also have an influence on electricity costs.