How much do local governments pay for electricity?
Until the end of March 2025, local governments could benefit from frozen electricity prices. Thanks to this, local government units that paid suppliers an amount higher than the maximum (specified in the act) received a refund of the difference between the actual and statutory price. The lack of government support means that many local governments are currently struggling with high fees that strain their operating budgets. According to a survey by the Association of Polish Cities, every third unit participating in the study concluded a contract for the supply of electricity that exceeded the maximum price (169 local governments out of 532). According to the study, the differences between the price resulting from the contract and the maximum price range from PLN 5 to even PLN 1000. The related losses (in Q4 2024 or Q1 2025) were estimated at PLN 1 - 1 million.
How can local governments reduce energy costs?
Expenditures of local government units related to electricity do not only concern electricity consumption in local government buildings or units subordinate to them. The task of local government is also to finance lighting located in the area subordinate to them. Energy for local governments is therefore spent to power, among others, street lighting, parks, municipal, county or provincial roads, as well as national roads other than motorways and expressways (including parts of these roads designated for pedestrians and bicycles).
Reducing energy costs by minimizing its consumption is a fairly obvious solution, but it does not always work for local governments. Savings by limiting the lighting of roads or sidewalks is not a good idea, because it could affect the safety of residents. On the other hand, all energy-saving solutions are worth considering, e.g. installing energy-saving LED lighting. An analysis of energy consumption will also help to optimize electricity costs, which will allow the implementation of appropriate optimization measures.
Energy for local governments and public procurement
The more favorable the electricity rate, the lower the electricity bills. This is a fairly obvious relationship, which is particularly important in the case of local governments. Why? Local government units (municipalities, counties, voivodeships) are public contracting entities that must apply the provisions of public procurement law when concluding contracts for supplies, services or construction works. This therefore also applies to electricity supplies. In Poland, public procurement is regulated by the Act of September 11, 2019 - Public Procurement Law.
The public procurement procedure includes a number of stages that are intended to ensure transparency and competitiveness, as well as guarantee the correct spending of public funds. Therefore, local government units are required to organize tenders for the purchase of electricity. In order to obtain the best offers, local governments are increasingly associating themselves within the so-called purchasing groups, which allow for the ordering of electricity in one tender for several dozen entities at the same time.
Electricity offer for local governments from Veolia
Attractive and stable conditions for purchasing electricity for local governments are extremely important for their financial condition. That is why at Veolia we support local governments through contracts designed with public institutions in mind. Our products include both fixed-price products (with a guarantee of immutability) and flexible tariffs (based on indexing the purchase price to stock exchange futures contracts or settling energy costs at stock exchange prices on the day of delivery). At Veolia we can also provide 100% green electricity, which will ensure sustainable development. Veolia also means over 25 years of experience and stable supplies - these are benefits that will be appreciated not only by local governments, but also other public institutions and companies.
