PL energy: URE to free up prices in 2015 (negative)

According to daily Puls Biznesu, the Energy Regulatory Office's (URE) president Marek Woszczyk hopes to complete the freeing of the electrical energy market only in 2015. Currently, URE needs to approve electrical power tariffs merely for group G customers i.e. households. The newspaper also quoted Woszczyk as saying that he intends to introduce a single agreement for electrical power sales and supplies. Another major goal is the liberalization of the natural gas market - Woszczyk upheld the plan to set up a gas exchange still this year. Earlier, URE said that the enterprise segment of the gas market could be liberalized in 2013 at the earliest. Meanwhile, Woszczyk also said recently that gas prices for households could hardly be freed before 2015.

Our view:

The news constitutes clearly a drawback to our scenario. We expected the liberalization of the retail market would be effective starting from 2013. The retail market remains a loss-bringing segment for the utility companies and now we expect it would remain for at least year or two.

The falling prices on the wholesale market would have had created a perfect opportunity for the URE to liberalize the market earlier than 2015 as the situation significantly lowers the upward pressure on retail prices. Still, we believe the political reasoning was more important here than the logical rationale.