Energy prices in the Czech Republic have dropped significantly, allowing households to save on their electricity bills. Some providers are offering electricity at prices that are up to a third lower than the government ceiling of CZK 6 (approx. $0.28) per kilowatt-hour, including VAT. This has been made possible through short-term fixed prices, with larger energy companies taking advantage of the favorable development of the wholesale market. One of the most competitive fixed-price deals is being offered by E.ON, which charges CZK 4.51 (approx. $0.21) per kilowatt-hour with a one-year fixed contract. However, smaller providers such as Tedom Energie offer even lower prices, selling one kilowatt-hour for CZK 3.89 (approx. $0.18).

Smaller energy companies are able to offer lower prices by providing monthly fixed fees that are linked to market development, thus avoiding the government’s ban on spot prices related to the stock exchange. The final price depends on the regulated part, a constant monthly fee, and a fee for the switch. Customers also have the option of an early termination. Tedom Energie, which had over 4,000 customers in February, offers a relatively unknown but successful product.

However, customers need to be aware that the final price is subject to regulatory components, making it higher than the suggested price. For example, the regulated part of the standard distribution tariff D02d is about CZK 6, while the final price with the government ceiling is over CZK 8. Another company, MND, offers a tariff with prices linked to the wholesale market and a variable contract term that is considerably lower than the ceiling price.

Overall, households in the Czech Republic can save significantly on their energy bills through short-term fixed prices offered by smaller companies such as Tedom Energie. This is particularly advantageous as the government ceiling price can be up to a third higher than the prices offered by some providers.

Article by Prague Forum