For the third year in row, Václav Rovenský and Ján Béreš prepared an up-to-date overview of Czech legal regulations in the electricity sector for the worldwide publication Getting the Deal Through – Electricity Regulation 2011. The overview summarizes the current regulations of the electricity business in the Czech Republic and focuses inter alia on topics relating to the determination of electricity prices in the Czech Republic. The publication was issued by the London-based market analysis company Law Business Research Ltd.

1 Policy and law

What is the government policy and legislative framework for the electricity sector?

The electricity sector in the Czech Republic, as an energy sector subsystem, is regulated by a range of legal regulations of different legal power. The conditions for doing business, regulation and public administration in the energy sectors are set forth in Act No. 458/2000 on conditions for doing business and for public administration in the energy sectors (Energy Act). Act No. 406/2000 on energy management (Energy Management Act) sets forth measures for increasing the effectiveness of the use of energy and obligations of natural persons and legal entities, as well as rules for preparation of the State Energy Concept, Regional Energy Concept and National Programme for Energy Saving and for Utilisation of Renewable Energy Sources. It also sets forth requirements for the ecological design of energy appliances. Act No. 180/2005 on promotion of electricity generation from renewable sources (Alternative Energy Act) extensively covers generation from renewable sources. The Czech Republic has implemented secondary EC legislation in the above regulations, including Directive No. 2003/54/EC concerning common rules for the internal market in electricity and repealing Directive No. 96/92/EC and Directive No. 2001/77/EC on the promotion of electricity produced from renewable energy sources in the internal electricity market and others. Act No. 158/2009, on the Amendment of the Energy Act and of Certain Other Acts (2009 Amendment), introduced substantial and complex changes of the Energy Act in order to achieve strict conformity with EC legislation. Actually a new implementation legislation in the Czech Republic is expected as the new directive No. 2009/72/EC, repealing Directive No. 2003/54/EC sets forth that it should be implemented within 2011; certain provisions of Directive No. 2009/28/EC repealing Directive No. 2001/77/EC shall also take effect that year.

In addition to EC Regulation No. 1228/2003 on conditions for access to the network for cross-border exchanges in electricity, and EC Regulation No. 714/2009, which repeals the former and shall take effect from 2011, electricity cross-border exchanges are governed by the Energy Regulation Office (ERO) Decree No. 541/2005, mentioned below. The ERO, as the energy regulation public authority, issues decrees and decisions on the basis of the powers delegated thereto in the Energy Act. The most important decrees among the wide scale of regulations are Decree No. 541/2005 on the electricity market rules, the principles for setting the prices for activities of the Electricity Market Operator (EMO – pursuant to the 2009 Amendment, the title of the entity changed into ‘market operator’, as it was newly vested with powers related to the gas market; therefore, the word ‘electricity’ is no longer applicable; however, it has been decided to preserve the previous widely recognised acronym EMO as the name of both the electricity and gas market operator) and on implementing some other regulations set forth by the Energy Act, Decree No. 475/2005, implementing some of the regulations set out by the Alternative Energy Act, and Decree No. 426/2005 on

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