Energy Prices to Rise Despite Delay in Market Liberalisation.

(From Polish News Bulletin)

In the following interview, Energy Regulatory Office (URE) head Mariusz Swora comments on his decision to postpone liberalisation of the domestic energy market.

GP: In November 2007, you withdrew your predecessor's decision concerning the liberalisation of the energy market. In February, you announced that energy prices would be freed on 1 January 2009 only to declare seven months later that for now things will remain as they are. Why?

MS: The picture you have presented is incomplete, because there are also important documents defining the appropriate boundaries necessary before any freeing up of energy prices can happen. I stressed that the market could be liberalised if the competition and the position of the consumer were strengthened, and if the URE was given the competence adequate to the current state of market development. Meeting these goals was not only the URE's job, but also the job of the appropriate ministries. On to of that, it required systemic changes. I admit that the date we had set for ourselves was quite ambitious, but nonetheless realistic had sufficient efforts been made. The URE was doing all it could, but once again it turned out the state was not ready for full liberalisation of the energy market, which is why I have decided to postpone the process.

GP: Given that wholesale energy prices are rising nonetheless and will inevitably lead to higher electricity bills paid by households, what is the point of keeping the prices under control?

MS: Postponing the liberalisation of the energy market does not mean that the prices paid by households will not go up; it only means that their growth will be controlled. While we cannot stop the energy prices from rising, we can mitigate the process. Due to their lack of knowledge about the subject and the rights they have, households are the weakest participants in the energy market. In a transition period like this, set tariffs perform a protective function and this is the main argument in ...