Energy 18 August, 2017 12:00 pm   
Editorial staff

Oleszczuk: The amendment to the Act on mandatory stocks entered into force. What will change?

On 2 August 2017 the amendment to the Act on mandatory stocks of fossil fuels in case of a threat to national energy security from 16 February 2017 entered into force. It was adopted by the Sejm on 7 July 2017, Konrad Oleszczuk lawyer at RKKW – KWAŚNICKI WRÓBEL & Partners Law Firm writes in a commentary for

The justification for the amendment, which was submitted to the Sejm on 6 June 2017, said that it was necessary “to facilitate the works of entities responsible for maintaining the mandatory stocks of natural gas.” Another goal of the amendment is to remove any interpretative uncertainties raised by participants of the gas market, to make sure that as of the new storage season, i.e. October 2017, it will be possible to maintain mandatory stocks on the basis of the new rules.

Most important changes 

One of the most important changes introduced by the amendment is the expansion of powers of the entity that accepts the order to maintain mandatory stocks on behalf of a different entity, the so-called collector (Polish – ‘bileter’). That entity will be allowed to take over the majority of tasks related to the maintenance of stocks and thus will pick up the duties of its customer. Additionally, the bill establishes mechanisms that facilitate the signing of the so-called collector agreement and make it more transparent by obliging the collector to publish full information on the service delivery conditions, including the publishing of a calculator on the provider’s webpage, which will make it possible for the customer to independently calculate the price for the rendered services.

The Act on fossil fuel stocks was also updated with a definition of the unit that imports natural gas (article 2, point 14a). According to the new definition, this is a natural or legal person or an organizational unit that does not have a legal personality, including an energy company that owns a gas transmission system, which imports natural gas to Poland to cover its own needs.

The bill also dispels any doubts about the permissible ways of maintaining the mandatory stocks of natural gas. According to the updated article 24, point 3 of the Act on mandatory stocks, they can be maintained only physically at a storage facility. This excludes the possibility of fulfilling the duty through the so-called “online storage facility” service. In order to guarantee the security of supply, the mandatory reserve cannot be stored outside a specified storage facility.

New duties

Another change introduced by the amendment that is worth mentioning is the TSO’s obligation to inform the President of the Energy Regulatory Office about the utilization of transmission capacity booked to deliver the total volume of mandatory reserves of natural gas stored outside of Poland into the domestic transmission or distribution network for other needs within 7 days of the event (article 24 a point 4 of the Act on mandatory reserves).

A new duty was also imposed on any energy company that conducts business related to natural gas trade outside of the country and units that import natural gas. Both entities are now obliged to inform the TSO about the location of storage of the obligatory natural gas reserves in order to enable the verification of technical possibilities of delivering the stocks to the gas system (article 25, paragraph 6, point 2 of the Act on mandatory reserves).

Financial penalties

The amended laws also regulate the issue of the competent authority’s power to impose penalties for failure to comply with the obligations that stem from the Act on mandatory reserves. The goal was to clearly separate the power to impose fines between the President of the Energy Regulatory Office and the President of the Material Reserves Agency. Currently this issue is regulated in detail by article 64 of the Act on mandatory reserves.

Changes to Energy law

The amendment also introduces changes to the Energy law. It simplifies and organizes the rules for granting licenses for natural gas trade with foreign countries by the President of the Energy Regulatory Office. It allows the entity that applied for the license to book the mandatory stocks of natural gas only after the entity actually starts to import the natural gas to the territory of Poland. Previously the importer was obliged to book the storage capacity during the license application process already.