ČEZ will raise electricity prices following the announcement of record profits

On Thursday morning, the energy company ČEZ announced record profits for the first three quarters of this year, and a few hours later, it announced a price adjustment.

From the beginning of next year, electricity will become more expensive. Most customers will pay the government’s capped prices from January, with clients paying around CZK 300 a month extra for the most common tariffs. The price increase will not affect customers who have a fixed price.

Gas prices will not change because clients with an indefinite-term contract already pay the capped prices, according to company spokesman Roman Gazdík.

The government set the price caps in October at CZK 6,000 per megawatt hour (MWh) of electricity, including VAT, and CZK 3,000 per MWh of gas. Distribution fees must be added to this. Prime Minister Petr Fiala (ODS) said at the time that the cost of this measure would be around CZK 130 billion.

In the case of electricity, unlike some other suppliers, ČEZ has not yet changed its indefinite price lists, which are held by roughly half of its customers. “We usually change the price lists for this product at the turn of the year. However, since we have already had to buy electricity for the indefinite product at this year’s higher prices, the price lists will be higher from the beginning of the year,” Gazdík said.

Some new customers, in particular, will see their advances reduced because they are already paying higher prices than the ceiling.

Prices for end customers will be significantly lower than the actual market prices, based on the price of both commodities on the wholesale market. Gazdík said that thanks to the capping, an ordinary household will save about 40 percent compared to the market prices of power electricity.

Other companies also adjust prices

ČEZ, majority owned by the state, is the largest electricity supplier in the Czech Republic. About 2.7 million customers buy electricity from it. But it will not be alone in raising prices.

Other energy suppliers are also preparing new price lists for next year. Prague Energy announced an increase in electricity and gas prices this week, and most of its customers will also pay the government’s capped prices. The average Prague household will pay hundreds of crowns less per month than today.

ČEZ announced on Thursday that the company’s net profit for the three quarters of this year rose to CZK 52.3 billion from CZK 6.7 billion in the same period a year ago. The company expects a profit of 65 billion to 75 billion crowns for the entire year. ČEZ is one of the companies on which the government wants to impose a windfall profits tax to cover extra costs related to capping energy prices. The so-called windfall tax is to apply from next year until 2025.

If Parliament approves, the ČEZ Group will also be affected by the introduction of caps on revenues from electricity generation. Producers must pay the state 90 percent of gains above the price cap.

Source

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