Energy suppliers in the Czech Republic have been gradually lowering prices since the start of the year, in line with the decline in wholesale prices of electricity and gas. While larger suppliers adhere to government price caps on annual and multi-year fixes, some smaller players are offering even greater discounts through a monthly fix option. This innovative approach allows customers to pay a price for each month based on the spot prices from the previous month, providing them with more flexibility and potentially lower costs.

One of the companies at the forefront of this offering is Tedom Energie, which introduced its monthly fix option in March. Since then, the supplier has attracted several thousand new customers, drawn by the favorable prices and the ability to adjust their contracts on a monthly basis. In June, Tedom Energie’s power price was 51% below the government cap at CZK 2,993 per megawatt-hour (MWh), while the gas price was 59% below the cap at CZK 1,247 per MWh. Additional distribution fees still apply to the final price.

The advantage of the monthly fix from Tedom Energie is that the contract is open-ended, with a notice period of only one month. This minimizes the risk for consumers in case of sudden price fluctuations. Other suppliers such as Eneka, Elimon, and bezDodavatele also offer similar contracts with a monthly fix and a one-month notice period. However, these companies have a smaller market share compared to Tedom Energie.

On the other hand, larger energy suppliers such as ČEZ, E.ON, Innogy, and Pražská energetika (PRE) have no plans to introduce similar products. They cited their stable procurement strategies, which allow them to protect customers from market fluctuations and negative impacts.

While the monthly fix option has gained popularity among customers, it has also raised questions about its compliance with regulations. However, according to ENA consulting company analyst Jiří Gavor, the monthly fix does not violate the law, as confirmed by the lack of intervention from the Energy Regulatory Office. Gavor emphasized the importance of ensuring that customers understand the nature of the product and are aware that monthly prices can both increase and decrease.

The government ban on offering spot tariffs to households without interval measurement, which is in place until the end of the year, aligns with the current price capping measures. The Ministry of Industry and Trade has indicated that it has no plans to lift the ban early.

In conclusion, while larger energy suppliers maintain their pricing strategies, smaller players are capitalizing on the market demand for greater flexibility and cost savings. The monthly fix option provides customers with an opportunity to benefit from spot prices and adjust their contracts on a monthly basis, offering a competitive alternative in the energy market.

Article by Prague Forum