Energy law amendments clarify exchange obligation requirements - International Law Office

International Law Office

Energy & Natural Resources - Poland

Energy law amendments clarify exchange obligation requirements

August 22 2011


On July 15 2011 the lower house of the Polish Parliament (the Sejm) passed a bill amending the Energy Law. The amendments - if accepted by the Senate and signed by the president - will provide for the inclusion of electricity sold on the Warsaw Stock Exchange Energy Market in the so-called 'exchange obligation' (ie, the mandatory sale of generated electricity on a commodity exchange). Several provisions introduced by a previous amendment will also be amended and clarified.

Under Article 3(44) of the amended Energy Law, the definition of a 'market organised by an operator of a regulated market in Poland' will refer to trade in exchange-traded commodities, based on the Financial Instruments Trading Act 2005,(1) by an operator of an exchange or an over-the-counter market.

The new wording of Article 49a passed by the Sejm will require a power company that produces electricity to sell no less than 15% of the electricity produced in a given year on commodity exchanges (as under the Commodity Exchanges Act 2000), or on a market organised by an operator of a regulated market in Poland. A power company that produces electricity and is entitled to receive funds to cover stranded costs under the Act on the Rules Governing the Coverage of Costs Incurred by Producers in Connection with the Early Termination of Long-Term Capacity and Power Purchase Contracts 2007(2) should sell any electricity that it produces (that is not subject to the obligation referred to in Subparagraph 1) in a manner that ensures equal access to such electricity - namely, in an open tender, on a market organised by an operator of a regulated market in Poland or on commodity exchanges.

The adopted amendment will also clarify the definition of an 'end user', which was introduced to the Energy Law one year ago. According to the proposed changes, personal use will not cover electricity purchased for the purpose of its consumption for the generation, transmission and distribution of electricity. The amendment also extends (from seven to 14 days) the period for payment of the advance on the fee payable when connecting a power source to the grid. The definition of 'agricultural biogas' will also be clarified and biogas extracted from wastewater treatment plants and landfills will be deleted therefrom. Moreover, the list of documents to be attached to an application for grid connection terms will be revised. This amendment will come into force in the middle of next year.

As a result of the proposed changes to Article 54 of the Energy Law, several thousand power sector workers will not be required to take exams to confirm previously acquired professional qualifications. Workers were previously required to confirm qualifications for the operation of equipment, installations and networks every five years. The Sejm took into account the fact that such stringent rules and time limits do not apply to nationals of other EU member states. This requirement will continue to apply only to a reasonably limited extent.

For further information on this topic please contact Rafal Hajduk or Andrzej Stefanowicz at Norton Rose Piotr Strawa and Partners LP by telephone (+48 22 581 4900), fax (+48 22 581 4950) or email (rafal.hajduk@nortonrose.com or andrzej.stefanowicz@nortonrose.com).

Endnotes

(1) 2010 Journal of Laws 211/1384.

(2) 2007 Journal of Laws 130/905, 2008 Journal of Laws 58/357 and 2009 Journal of Laws 98/817.


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