Czech Energy Act passes third reading and goes to Senate

The closely watched Energy Act returned to the agenda of the Chamber of Deputies’ 26th session on 10 April after its „April Fool’s“ deliberations. It was passed in its third reading that day and can continue through the legislative process in the Senate of the Parliament of the Czech Republic. Unlike the first third-reading debate, the consideration of the bill was spared obstruction by the Dawn Movement.

Nevertheless, this can be described as a partial success for the Dawn Movement’s MPs. The two most controversial points criticised by Dawn were considered in line with the political party’s wishes.

Successful and unsuccessful amendments to the Energy Act

A proposal for the formal separation of power plants, which would have allowed solar operators to avoid paying the so-called solar levy, did not pass. By contrast, a proposal on the mandatory registration of easements in the land register was successful. In the opinion of the Energy Regulatory Office, the registration could have triggered costs that would have been reflected in energy prices. It was approved that easements do not have to be entered in the land register, but information on them will be provided to persons who demonstrate a legal interest in the property.

A proposal by MP Kováčik, which called for preferential treatment for solar power plants commissioned in January and February 2011, was rejected. These plants received lower support for the electricity they generated as a result. The MP also warned that failure to approve the amendment could cost additional money in a court settlement.

A proposal to establish the position of ombudsman at the Energy Regulatory Office was also rejected.

Bill approved by the narrowest possible majority

In the vote, the bill passed by the narrowest possible majority in the Chamber of Deputies (a simple majority of MPs present was required for adoption). Of the 171 MPs registered as present for the vote, exactly 86 supported the bill, which was the minimum number required. Thirteen MPs, mainly from the Dawn Movement, voted against the proposal. The opposition largely abstained.

Main changes to the Energy Act

One of the main changes in the current amendment to the Energy Act and the Act on Supported Energy Sources is a change in how support for renewable energy sources is financed. Payments for renewable sources will no longer be based on consumption, but on the size of the reserved capacity, or rather the main circuit breaker rating.

However, it is still too early to determine the precise impacts of the legislative amendment. The Act regulates the method of financing support and its limits. Implementing decrees and related legislation under the Energy Act, which must remain within its bounds, will therefore be important.

Finally, we present the view of Michal Šnobr:

„The changes were not that fundamental. In many respects, it was genuinely about harmonisation with European law, and in fact, most of the changes were necessary due to amendments to the Civil Code and the Act on Business Corporations. The media have essentially focused on only some relatively minor changes, but these were precisely the focus of various pressure groups,“ said J&T Bank analyst Michal Šnobr.