Cap on power prices to replace Poland’s windfall tax plan

WARSAW, Oct 14 (Reuters) – Capping electricity prices for households and small businesses will cost about 19 billion zlotys ($3.9 billion) and likely means Poland will abandon earlier plans to tax windfall profits, Climate Minister Anna Moskwa said in an interview on Friday.

Earlier this week Poland announced caps on prices of electricity for vulnerable consumers from Dec. 1 until the end of next year as municipalities and cities faced several-fold price rises by local utilities.

Moskwa said the cost of measures will be shouldered by power utilities based on a formula that will “de facto” limit their revenues and forcing them to return windfall profits if margins are too high.

“The rules that are being prepared are comprehensive, so probably the state assets ministry will abandon plans to seek additional measures,” Moskwa told Dziennik Gazeta Prawna newspaper.

Last month, Poland’s state assets minister said the country planned to raise 13.5 billion zlotys a windfall tax to offset the impact of rising bills on households. The new tax was set to apply to all companies employing over 250 of staff raising concern among private investors.

($1 = 4.9157 zlotys)

(Reporting by Marek Strzelecki)

Photo – Polish Climate Minister Anna Moskwa