In a bid to alleviate the financial strain caused by high district heating prices, the Czech government initially earmarked CZK 17 billion for households receiving such services this year. However, recent developments indicate that the intended compensation may be scaled back, raising concerns among consumers who were banking on relief. The government had sanctioned this support in December 2020, and it received approval from the European Commission in June 2021. Regrettably, the initially proposed compensation amount might not be fully realized due to evolving considerations.

Minister of Industry and Commerce, Jozef Síkela (representing STAN), acknowledged the possibility of a reduction in the overall compensation package. He emphasized the need to reconsider the extent of support for district heating in light of prevailing energy prices, including heating costs. Minister Síkela stated, “Energy prices, including heat, need to be seen as a whole and viewed from the perspectives of the impact on consumers and the state budget.”

This shift in perspective has garnered criticism from various quarters. Martin Hájek, the director of the Czech District Heating Association, revealed that the Ministry of Finance has expressed strong reservations about the proposed CZK 17 billion support amount. Hájek noted the Ministry’s apparent unfamiliarity with the initiative, despite its prior approval by the government last year.

The Ministry of Finance has refrained from immediate commentary, highlighting that the proposal is currently undergoing interdepartmental review. Stefan Fous from the Ministry of Finance’s press department elucidated, “The relevant material submitted by the Ministry of Industry and Commerce is currently in the interdepartmental comment procedure, and the Ministry of Finance normally adheres to the principle of not commenting on materials that have not yet been approved by the government and whose final form has not yet been agreed upon.”

As the Ministry of Industry and Commerce engages with comments on the proposal, they aim to present their recommendation to the government by the conclusion of August. The compensation plan encompasses two distinct periods: one covering expenses from the preceding February to December and the other designated for the current year. The procedure entails issuing a call for district heating applications, followed by assessment and eventual distribution of funds to consumers via heating plant accounts.

Even if the government ultimately ratifies the compensation package in its initial magnitude, the respite it provides will be modest for some households. Numerous areas, such as Slaný and Luby in the Cheb region, were burdened by substantial arrears due to steeply escalating heating expenses last year, some amounting to tens of thousands or even exceeding a hundred thousand crowns.

Article by Prague Forum