The capping of energy prices ends. What are your options if you have fixed the price above the ceiling?

The capping of energy prices ends. What are your options if you have fixed the price above the ceiling?
The capping of energy prices ends. What are your options if you have fixed the price above the ceiling?

As of January 1, 2024, the cap on energy prices ceases to apply. Many people have the price fixed above the government caps because they were handling the contract at the height of the energy crisis. The fixed price is in most cases higher than the government-set caps, so the price after the end of 2023 may be higher by up to 7 thousand CZK per 1 MWh of electricity than current market prices.

With an average consumption of around 3 MWh per year, one household can pay up to 21,000 crowns each year. For gas, it can be three thousand crowns per 1 MWh, so the average household with a consumption of 10 MWh per year can pay up to 30 thousand crowns more, warns Minister of Industry and Trade Jozef Síkela.

Energy prices in the markets are now relatively stable with a slightly downward trend, to which suppliers are responding by offering prices below the government ceiling and actively approaching their customers with prices fixed above the government ceilings.

End of caps and people with prices fixed above the government cap

People who have contracts for an indefinite period, they are in most cases below government ceilings. However, they must be aware of risks (the unstable situation in Eastern Europe and the Middle East) that may have an impact on the energy market.

Another group are subscribers who they have a fixed term contract with prices above government caps. These people are currently being contacted by their energy suppliers who are offering them switching to a new product with a price below the government ceiling.

These products are more affordable than those above government caps, but it’s also a good idea to look at what competing energy suppliers are offering, whether already on a fixed product for several years or with products for an indefinite period.

Tip: You don’t have a new gas or electricity price list yet? Check email and websites so you don’t miss a deadline

Cancel the contract and go to another supplier?

The simplest and, for many, the most advantageous is really pwrite off a contract with prices below government caps with your existing supplierwhich all major energy suppliers offer.

However, it is also possible to opt out of a fixed-term contract. However, you have to pay a fine. The amount of the fine may be acceptablebecause some energy suppliers currently offer very favorable products.

Compare the offer from your supplier with the competition

We recommend before signing a new contract compare the offer of other electricity or gas suppliers on Comparators of the Energy Regulatory Office.

There are also comparison portals, but when using them, be aware that thealthough from your point of view they do it for freebut yours the energy supplier pays them a commission, which adds another link to the already complex chain from power plant to socket.

After getting the offer you calculate the savings when switching to another trusted supplier (or a comparison portal or energy supplier will calculate it for you). You must deduct the amount of the penalty found in the contract with your energy supplier from the savings.

Tip: What you can do if you have problems with your utility bill

What is the penalty for early termination of a fixed-term contract with E.ON, ČEZ, PRE?

The fine for terminating a fixed-term contract is in the order of several thousand crowns. It is either fixed (Centropol, Pražská plynárenská), or it is calculated based on the number of months in which the customer does not receive gas or electricity after termination (Innogy, E.ON, ČEZ).

The suppliers only approach the fine when you leave for a competitor.

Pražská energetika (PRE) spokesman Karel Hanzelka said that there is no penalty for early termination of a contract with price fixing above the state ceiling, because the company has very few such customers and offers them products with prices below the government ceiling.

Pavel Grochál from the company Innogy commented on the calculation of the fine as follows: “The fixed amount is multiplied by the number of months in which the customer does not purchase gas or electricity after being notified by Innogy, although he has undertaken to do so. The fixed amounts reach different amounts and are always stated with the customers in the contract.”

The same is the case with the companies ČEZ and E.ON, which is confirmed by the press spokesman for the latter company, Roman Šperňák: of the agreed contracts, a penalty for non-compliance with the contractual obligation in the middle of the fixed period is established in the amount of 500 CZK as an administrative fee and subsequently 450 CZK – 900 CZK for each month of non-compliance with the fixed amount according to the amount of consumption and the distribution rate.”

Jiří Matoušek, marketing director of Centropol, adds: “However, some suppliers also charge for lost profit, and this provision is stated in the contract in the form of a formula, where the lost profit is calculated as an unused part of the expected consumption. The total amount may then be higher.” You will always find this information in your contract, but you will not normally come across it with large energy suppliers as a household.

Penalty for early termination of a fixed-term contract for contracts above the government cap

Supplier Penalty for early termination of a fixed-term contract for contracts above the government ceiling
Centropol CZK 6,000
ČEZ Depends on the length of the contract, lower hundreds per month
EON It depends on the length of the contract, hundreds per month + CZK 500
Innogy It depends on the length of the contract, hundreds per month
Pražská plynárenská CZK 6,000*
Prague energy industry It doesn’t apply

*for households, CZK 10,000 for retail customers

Before signing the contract, inform your energy supplier elsewhere, maybe you will come to an agreement

Although you are not obliged to inform your supplier about a change of supplier (your new supplier will do this), it is advisable. And that’s because your existing supplier may agree to more favorable terms to retain you.

This is confirmed by Roman Šperňák, E.ON’s press spokesman: “In general, we recommend that you contact us and find a solution before going through the sanction. As I have already said, our current offer for both existing and new customers is one of the most advantageous on the market.”

How many people are still priced above government caps?

The Minister of Industry and Trade (MPO) Jozef Síkela mentioned that at the time when energy prices reached their peak, several hundred thousand people fixed the price for energy supplies.

Pavel Grochál from the Innogy company comments on the approach to customers as follows: “Over 80% of the approached customers have new contracts with a price below the price ceilings. According to our calculations, a typical customer with a fixed contract at high crisis prices will save 17,000 crowns per year on gas and 12,000 crowns on electricity with Restart.

Press spokesman Karel Hanzelka (PRE) told “The number of take-up points with a price fixed above the level of the government ceiling was around one thousand. We have offered all these customers the option to switch to a more affordable price below the government cap without any penalty. Approximately half of them have already concluded a new, more favorable contract. The remaining 500 customers have not yet responded to the offer and we are trying to contact them again.”

Miroslav Vránek, head of the communication department of Pražská plynárenská, stated that they have not registered any customers with prices above the government ceiling for a long time.

ČEZ had over 160,000 customers with prices fixed above the government ceiling, most of them have already switched to products with lower prices, but ČEZ continues to reach out to them, which is also confirmed by press spokesman Roman Gazdík: “We repeatedly proactively contact customers with offers. The transition to new contracts is very fast, there are no notice periods, etc.”

Be active, it will pay off. Information can be found on the ERÚ and MPO websites

Advice and tips on how to further save on energy, what the price is made of or how to choose a supplier can be found on the website of the Energy Regulatory Office or on the specialized website of the Ministry of Industry and Trade (MPO)

For advice, you can also contact the EKIS network of energy advisors, who offer free professional consultations in the field of energy savings, or the information MPO line 1212, which is open every weekday from 8:00 a.m. to 4:00 p.m. The price for calling this line is charged according to your tariff.

In any case, your initiative is important, the supplier will not sign the new contract for you, you must communicate with him and read the terms and conditions yourself. If you let the problem “avoid”, then you will continue to run a product with a price above the government ceilings.

Most of the actions can be easily done from homevia computer, smartphone or directly at your supplier’s branch.

Source: Shutterstock

The article is in Czech

Tags: capping energy prices ends options fixed price ceiling


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