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Jessica Vaculíková | May 7, 2024

Amendment of the Energy Act

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Below you will find a brief summary of the key changes brought about by the amendment to the Energy Act No. 469/2023 Coll. (the “Amendment”), which took effect on 1 January 2024. The amendment was adopted by the legislators mainly in connection with the implementation of Directive (EU) 2009/944 of the European Parliament and of the Council on the introduction of electricity sharing, the energy community and the protection of vulnerable customers. This article focuses primarily on changes that affect consumers.

Main changes concerning consumers

Automatic prolongation of contracts

  • The amendment introduces a new rule on automatic prolongation, or automatic extension of contracts, which imposes an obligation on the energy supplier to inform the consumer, no later than on the thirtieth day before the expiry of the agreed duration of the contract, of the contractual conditions that will be in force during the prolonged period.
  • From 1 January 2024, the supplier must notify the consumer of, for example, the price of the supply, the amount of the contractual penalty and the period, for which the contract is extended. Such notice should also include a statement of the consumer’s right to terminate the contract.
  • In the event that the supplier fails to comply with this newly introduced notification obligation, the contract shall be regarded as a contract of indefinite duration after the expiry of the agreed period. In the case of a contract of indefinite duration, the consumer is entitled to terminate the contract at any time without giving any reason and without any penalty.

Limiting the duration of a fixed-term contract

  • The amendment also focused on limiting the duration of a fixed-term contract. In the previous version of Energy Act No. 458/2000 Coll. (“Energy Act”), the maximum period, for which a fixed-term contract could be made, was set at 36 months from the date of commencement of supply. After the expiry of this period, the contract was viewed as a contract of indefinite duration.
  • The amendment removed the presumption of a contract of indefinite duration. Thus, a contract that is made for more than 36 months is now deemed to have been made for 36 months. In other words, there is no continuation of the contractual relationship after the expiry of the maximum duration of the contract under the indefinite duration regime, as has been the case until now.

Dates for billing

  • The amendment has also explicitly established the deadlines for the issuance of energy supply bills, which were previously established by Decree on Billing No. 207/2021 Coll. (the “Decree”). The length of the settlement period may not exceed 14 calendar months. For retail gas customers and customers connected at low voltage level, the billing period shall be 12 consecutive calendar months.
  • In contrast to the Decree, the Amendment also introduces the obligation to provide the customer with a billing statement no later than 15 days after receiving the data for billing the supply. According to the previous legislation, it was sufficient for the billing to be made within this period, but no time limit was set for providing it to the customer.

Contracts with dynamic pricing

  • The amendment also introduces a new concept of dynamic pricing. For contracts with dynamic pricing, the price changes during the term of the contract. The price of supply depends on changes in electricity and gas prices on short-term markets.
  • The amendment should provide sufficient protection for consumers when entering into this type of contract. One of the protective measures and a condition for the effectiveness of such a contract is that the consumer’s point of consumption is equipped with continuous metering equipment for electricity and gas.
  • In addition, the consumer has the right to terminate the dynamic pricing contract at any time by giving one month’s notice.

Protecting vulnerable customers

  • The amendment also introduces a new concept of a vulnerable person or a vulnerable customer. For the purposes of the Energy Act, a vulnerable person is a person, who uses equipment in his or her home that cannot be operated without a continuous supply of electricity and that also serves to maintain the basic life functions of that person.
  • A vulnerable customer may be either the vulnerable person using the equipment directly or a third party who has a contract with the electricity supplier, provided that the vulnerable person him/herself also resides at the third party’s point of supply.
  • The vulnerable person described above has enhanced rights compared to ordinary consumers in terms of, for example, notification of planned reductions or interruptions in supply in the event of planned outages or as a result of the vulnerable customer’s failure to meet a payment obligation as a customer.