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SMALL POWER TRIPACK BECOMES EFFECTIVE

The so-called Small Power Tripack, i.e. the Act on
Amending Power Law and Certain Other Acts of 26
July 2013 (Journal of Laws of 2013, item 984)
became effective on 11 September of this year. The
amendment to the legislation was forced by
complaints being filed against Poland by the
European Commission to the European Court of
Justice on the grounds of incomplete implementation
by Poland of the requirements of the directives on
the internal natural gas and electricity markets. The
main objection raised by the European Commission
with regard to the natural gas and electricity markets
was their insufficient liberalisation. If the disputes
were ruled against Poland, high financial penalties
would be imposed.

The amendment introduces concessions for industrial
buyers which consume large volume of electricity as
part of their production operations. For many
industries, where electricity is a fundamental
production input, the electricity cost becomes a key
financial expense. The electricity cost comprises
inter alia the cost of purchasing the certificate of
origin, representing the cost of a system conceived to
support generation of electricity in renewable
sources and high-efficiency cogeneration. Under the
new wording of the statute, industrial buyers are able
to obtain themselves a certificate of origin and a
cogeneration certificate of origin and present them
for cancellation or effect payment of the substitution
fee, if in the calendar year immediately preceding the
year in which the obligation is fulfilled they
consumed at least 100 GWh of electricity and for
which the cost of electricity amounts to at least 3%
of the value of production. Consequently, depending
on what proportion the electricity costs account for
in the total costs of production, they are partly not
required to present a certificate demonstrating that
the electricity has been produced by renewable
sources, thus reducing the overall cost of operations.
The definition of the industrial buyer has been
included in Article 3(20e) of the Energy Law.

One of the more significant new provisions is the so-
called gas exchange obligation, i.e. the requirement
for companies trading in natural gas to sell a
specified percentage of it on a commodity exchange.
Pursuant to Article 49b of the Energy Law, a power
business trading in gaseous fuels is required to sell at
least 55% of methane-rich natural gas injected into the transmission system in the relevant year on
commodity exchanges or a market organised by an
entity operating a regulated market in Poland within
the meaning of the Act on Trading in Financial
Instruments of 29 July 2005. Such a solution is
aimed at shifting the structure of the gas market
towards a competitive market.

Further, the interconnection of renewable electricity
micro-installations with the grid has been made
easier in a number of ways. The micro-installation
has been defined as a renewable energy source of the
aggregate installed electrical capacity of up to 40
kW, connected to a power grid of the rated voltage
below 110 kV, or of the aggregate installed thermal
capacity of up to 120 kW. The generation of
electricity in a micro-installation by a natural person
who is not an entrepreneur within the meaning of the
Act on Freedom of Business Activity and sale of
such electricity by such individual is not a business
activity within the meaning of that act. The
electricity generated by a micro-installation
connected to a distribution grid located in an area of
operations of a last-resort supplier and offered for
sale by that individual must be bought by that
supplier. The electricity is purchased at a price
equivalent to 80% of the average electricity selling
price during the previous calendar year.

The new act also reintroduces the arrangement
whereby the Chairman of the Power Regulatory
Authority (URE) serves a term of office. The
Chairman is appointed by the Chairman of the
Council of Ministers from amongst candidates
elected in an open and competitive recruitment
process. Further, the amending law requires the
Minister of Economy to develop a proposal of the
national renewable energy action plan until 2020.
The act also amends a number of other acts,
including the Building Law, Act on Commodity
Exchanges, or Public Procurement Law.

Summing up it is worth noting that the amendments
under review are but a prelude to the revolutionary
changes to take place in the energy law. At the
moment work is underway at the Ministry of
Economy on a bill that is expected to mark the
enactment of three new acts: energy law, gas law, and renewable energy law (the so-called Large
Power Tripack). The three statutes are expected to
replace the present energy law as well as realigning
it with the requirements of the European Union and
of the modern power industry.

MILLER, CANFIELD,
W. BABICKI, A. CHEŁCHOWSKI I WSPÓLNICY SP.K.
ul. Batorego 28-32
81-366 Gdynia
Tel. +48 58 782-0050
Fax +48 58 782-0060
gdynia@pl.millercanfield.com
ul. Nowogrodzka 11
00-513 Warszawa
Tel. +48 22 447-4300
Fax +48 22 447-4301
warszawa@pl.millercanfield.com
ul. Skarbowców 23a
53-125 Wrocław
Tel. +48 71 780-3100
Fax +48 71 780-3101
wroclaw@pl.millercanfield.com

Disclaimer: This publication has been prepared for clients and professional associates of Miller Canfield. It is intended to provide only a summary
of certain recent legal developments of selected areas of law. For this reason the information contained in this publication should not form the
basis of any decision as to a particular course of action; nor should it be relied on as legal advice or regarded as a substitute for detailed advice in
individual cases. The services of a competent professional adviser should be obtained in each instance so that the applicability of the relevant
legislation or other legal development to the particular facts can be verified.