Action is required to keep electricity prices and electricity costs for final consumers at a viable level, although the national measures put in place need to be coordinated at EU level. The goal is to act against the factors driving the rise in energy prices, to mitigate the impact, and to ensure that the current uncertain situation does not cause any lasting damage to consumers and businesses.

Proposed legal solutions

Passed by the National Assembly on 9 December, the new law sets out temporary measures to reduce import dependency in energy supplies, measures to increase energy production from renewables, measures to control energy prices, and for levying and spending windfall taxes, and certain other measures for addressing high energy prices, such as subsidisation of wood pellets. Subsidies will be available for this year’s heating season, for purchases of up to five tonnes of pellets, for which claimants need to present an invoice. The provision will apply to anyone who purchases pellets between 1 September and 31 December 2022.

The measures to reduce import dependency set out the requirement to reduce electricity consumption in peak hours between January and March of next year by 10% relative to the average consumption over the last five years, and the approach to doing so. This needs to be ensured by the system operator. The system operator will reduce consumption through incentives and payments to those who cut their consumption, by means of a tendering system. Retailers, suppliers, aggregators and individual final consumers with an installed power of more than 1 MW will be able to participate in the tenders. The funding for the payments for cuts in consumption will be provided by the state budget.

The law also defines limits on the windfall profits of electricity producers and a solidarity levy. It introduces a windfall tax on the sale of electricity produced and sold on the Slovenian wholesale market (with certain exemptions). This tax can be used to fund compensation for reduced consumption in peak hours, compensation to suppliers for regulated prices, support for vulnerable population groups, and promotion of renewables. Meanwhile the solidarity levy is payable on profits from the extraction and processing of crude petroleum and natural gas.

The law also sets out other measures to increase energy production from renewables, provisionally in the form of grants to promote renewable energy roll-out, energy storage, and heat from renewables. Investment in these projects will be funded via the support centre.

Certain measures to curb high costs are also envisaged. Should there be a disproportionate rise in energy prices, the government can for example stipulate that district heating prices be regulated where there is no basis for doing so under the Price Controls Act alone.

Other provisions in the upcoming emergency law include restrictions with regard to the return of a supplier to the electricity and gas retail market, and the possibility of transferring the entire portfolio of a supplier who withdraws from the market to another supplier. There are also provisions exempting public contracts for electricity or gas supply from the Public Procurement Act, provided that the contract value does not exceed the level at which announcement in the Official Journal of the European Union is required. The law also regulates the spending of congestion income, and introduces a basis for compensating suppliers of electricity, gas and heat that suffer significant damage as a result of price regulation measures.