20.01.2022

Why will many companies not have a chance to lower the electricity price? The reason may be the notice period of the applicable contract.

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Author

Arkadiusz Somnicki

Member of the Board

High electricity prices have increased the interest of entrepreneurs in purchasing electricity from alternative sellers. Those who postpone the decision to purchase energy for the second half of the year may encounter an unpleasant surprise - they will not be able to take advantage of attractive price offers. Why? There are still thousands of energy purchase agreements with a multi-month notice period, often with effect at the end of the year. The consequence will be the need to purchase electricity from the current seller for the next 12 months..

This situation applies in particular to companies that have never changed their energy supplier and as a result have not changed the energy purchase agreement for many years (data of the Energy Regulatory Office indicate that from 2007 to 10.2021 only 0.2 million customers from tariff groups A , B and C changed the seller - approx. 8% of Polish enterprises). It should be borne in mind that provisions on several-month notice periods with effect at the end of the year may also be found in newly signed contracts, concluded e.g. when changing the supplier.

For example, a company with a 6-month notice period in the current energy purchase agreement with effect at the end of the year, which receives an attractive offer for 2023 from a competitive seller in July, will not be able to take advantage of it. In this case, the company will have to buy energy for 2023 from the current seller (unless it pays him a penalty for breaking the existing contract) and the price that the company will see on invoices next year will depend only on his will. The current market situation is so dynamic that the price received from the current seller and the price obtainable on the competitive market may vary by several dozen, and in extreme cases even several hundred percent. The contract for 2024 will be another opportunity to purchase energy at a favorable price.

The sellers' motivation to propose attractive prices is the greater, the more they are aware that they can be easily changed to others..

We encourage entrepreneurs to check the provisions regarding the notice period in their contracts as soon as possible. If this period is several months, the company should already contact the current electricity supplier in order to change the contractual terms. If he does not want to establish new terms, it is worth thinking about terminating the contract, which is not synonymous with the end of cooperation. Such a maneuver gives entrepreneurs the opportunity to choose a new seller for the next year. It often turns out that the current seller, leaning against the wall, submits an offer to sign a new contract, but on favorable terms.

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