The changes in electricity prices proposed by the Energy Regulatory Office may significantly affect the operation of trams, trolleybuses or trains next year. At least according to carriers, who claim that in some cities this can lead to higher fares in extreme cases.
To explain: the price of electricity consists of a commercial component, which is determined by suppliers, and a regulated part managed by the state. And according to the ERO’s preliminary proposal, this is to increase from next year.
The Association of Transport Enterprises objects that the electricity costs for its members across the Czech Republic may increase by up to a quarter of a billion crowns.
“We want to make a fairly vigorous announcement ahead of time. We do not agree with the proposal. We would prefer it if the proposed amendment did not take effect at all,” said Tomáš Pelikán, chairman of the Pardubice transport company, to Seznam Zprávám.
The organization protects over 20 transport companies, but it is not a professional association, so it cannot officially comment on the change. He wants to do so through the Chamber of Commerce or the Union of Industry and Transport.
“We fear that the increase in the regulated component of electricity prices – due to the volume of the increase – may be reflected in the total costs of transport companies. The price of electricity is a significant cost for carriers,” said Jan Šebesta, who is a manager for transport and investments at the Industry Association.
However, according to him, it will depend on individual cases. For example, how the price of power electricity will change for a specific operator.
Up to 300 million on railways
Train carriers order energy together through the Railway Administration. The state organization is thus one of the largest consumers of electricity in the Czech Republic.
“The railway administration expects an increase in the price for regulated components of electricity supplies according to the current draft of the ERO’s Price Decision in the amount of approximately 260 crowns per megawatt hour. Costs can increase by up to 300 million crowns,” SŽ spokesman Jan Nevola said, adding that the company buys energy for other organizations – the Ministry of Transport, the Directorate of Roads and Highways and the Czech Air Traffic Control.
For example, the state-owned Czech Railways is still waiting for a reaction. “At the moment, we are analyzing information and data related to changes in the area of electricity prices, therefore we cannot comment on this topic at the moment,” said spokesperson Petr Šťáhlavský.
The private carrier RegioJet made a similar statement. “Since the announced increase is currently not yet precisely determined, we cannot comment on your questions. We want to avoid any guesses,” responded Alexandra Janoušek Kostřicová.
Buying on the stock market
Prime Minister Petr Fiala (ODS) reassured last week that there will not be a significant price jump for electricity. “For the vast majority, energy prices will remain roughly at the same level as this year, or at most one percent higher,” he said. He also justified it by making the commercial component of electricity cheaper.
Pelican contradicts it. “I don’t know where the Prime Minister got this information. We currently purchase energy at spot prices on the exchange, on a daily basis. They are very similar amounts that we have on the stock exchange for the year 2024,” objected Pelikán.
According to him, for example, the costs of the Prague transport company will increase by 90 million crowns. They are also talking about tens of millions in Brno. “The increase in electricity costs will cost us about 14 million crowns next year, but there will probably also be a change in the existing payment for the capacity component, which is about eight million crowns,” calculated Sabina Bevilacqua from the secretariat of the director of the transport company.
Pelikán from the Association of Transport Companies reminded that the increase in the price of electricity should go hand in hand with the change in the VAT rate for fares and the September re-increase of consumption tax. “That’s tens of millions more across transport companies. In total, we are around 300 million crowns. These costs will be borne by the customers of the services,” he explained.
He added that in extreme cases, this could lead to higher prices for tickets in cities. “From the point of view of the budgetary determination of taxes, various things also fall on the cities, so the adjustment of fare prices is offered,” he admitted.
He objected that the proposal contradicted the greater ecological nature of the operation. By law, carriers fulfill quotas and gradually increase the share of emission-free vehicles. “If the state orders this on the one hand and then increases the fixed energy component on the other hand, then it makes no sense at all,” he responded.
After a meeting with industry representatives, Prime Minister Fiala indicated that the amount of the regulated component could be lower than in the current ERO proposal.
“We hope that our proposals will be taken into account as promised. At the moment we are negotiating with the relevant ministries, concrete results will be important, i.e. the rate of correction of the increase in the regulated energy component,” said the general director of the Union of Industry and Transport, Dagmar Kuchtová.
The energy regulator has to finally approve the proposal for the new electricity price by the end of November. “Perhaps sanity will prevail in the end,” concluded the Pelican.