Composition of electricity price
Since the start of 2006, there has been a change in the manner of billing electricity payments for households. In connection to the unbundling of sales and distribution activities, the related payments have also been separated.
According to the requirements of the Energy Act, the price for electricity is divided into regulated payments for transmission of electricity to your household (i.e. payments for use of the energy network) and payments for the actually consumed electricity (“power”). The value of regulated payments is stipulated annually based on a proposal from the regulated entities by resolution of the Energy Regulation Office, while the price of power is determined by the situation on the electricity market.
The said payments are also divided into partial components, which are listed individually in the electricity price list and in the final billing of your consumption.
- Payment for power (payment for actually consumed electricity)
- Regulated payments for electricity transmission
- Electricity tax
- How to calculate your total annual electricity payment?
Payment for power (payment for actually consumed electricity)
The price of power products is composed of two parts:
- Fixed monthly price – the value of which differs depending on the product series you use;
- Price per consumed megawatt hour (MWh), which for some products is divided into the price in the low (LT) and high (HT) tariff band.
The high and low tariffs are two different prices for consumed electricity, which are applied to “double-tariff” products. The low tariff is an advantageous price valid always for a certain part of the day – all the electricity you consume during this period is billed at a lower price. Double-tariff products are suitable for households that use appliances with high energy demand, such as accumulation or direct heaters or hot water heating. Single-tariff products have only one price for consumed electricity.
Regulated payments for electricity transmission
These payments are stipulated annually by the Energy Regulation Office based on a proposal from the regulated entities, and include the following components:
Price for distribution (electricity distribution to individual customers) includes:
- monthly fee for power input according to the nominal current value of the main circuit breaker before the electrometer; this is a sum that evolves from the current value of the main circuit breaker in your household (expressed in amperes – A) and covers the fixed costs of the distribution system operator. It is paid at a fixed monthly rate regardless of how much electricity you consume. The higher the value of the circuit breaker, the greater the energy demand of the appliances that can be used simultaneously can be, but at the same time the higher the fee. By replacing the main circuit breaker with a lower one, you can save on these payments. But first, consult your supplier or a qualified electrician to determine what value will be sufficient for your household and used appliances.
- Price per transmitted MWh – this may again be divided into a price with a high (HT) and low (LT) tariff.
Price for system services covers the costs of the energy transmission system operator to purchase auxiliary services from individual electricity producers. For simplicity, these services may be considered the necessary standby of power plants that work as backup facilities in the case of outages in production or sudden increases in electricity consumption.
Price for support of electricity buyout from renewable sources (RES) and combined electricity and heat production. In connection to joining the EU, the Czech Republicundertook to support this type of production with regards to its ecological benefits. The production costs for these facilities are higher, which is why they are covered from this fee.
Price for accounting activities of the Electricity Market Operator (OTE) covers the costs of this company, which among other things ensures processing of balances of the electricity supply offer and demand, and accounting of discrepancies between the planned and actually supplied volume of electricity between individual participants on the electricity market.
From 2008, the price of electricity also includes the newly stipulated electricity consumer tax – one of the newly introduced ecology taxes arising from our obligations towards the European Union. The tax is paid by the electricity supplier to the Customs Administration in bulk for all customers, meaning that you have no additional worries. The tax is the same for everybody and is equal to CZK 28.30/MWh.
How to calculate your total annual electricity payment?
Procedure for calculating your total annual electricity payment.
The total annual electricity payment consists of three parts:
- a= fixed payments
12 monthly payments for power input according to the nominal value of the main circuit breaker before the electrometer + fixed monthly payment for power
- b= payment for electricity consumption in HT
annual MWh consumption in HT × (price for distribution of 1 MWh HT + price for system services + price for support of electricity buyout + price for accounting activities of the OTE + price per 1 MWh HT power*)
- c= payment for electricity consumption in LT (annual consumption of MWh in LT × (price for distribution of 1 MWh LT + price for system services + price for support of electricity buyout + price for accounting activities of the OTE + price per 1 MWh LT power*)
Total annual payment = a + b + c
* electricity tax equal to CZK 28.30 per 1 MWh is added before adding VAT