1. Contracts concluded for an indefinite period
The procedure for terminating an energy supply contract concluded for an indefinite period is regulated by Article 4j(3) of the Energy Law:
An end user may terminate a contract concluded for an indefinite period, under which an energy undertaking supplies that user with gaseous fuels or energy, without incurring any costs, by submitting a notice of termination to the energy undertaking. A customer who terminates the contract is obliged to pay for the gas or energy consumed and for the transmission or distribution services provided.
The above termination of an electricity contract applies exclusively to the form of termination; therefore, in the event of withdrawal from an electricity contract or the expiry of the contract, the above provision shall not apply.
In accordance with the above regulation, an electricity consumer shall be entitled to terminate an open-ended electricity contract without incurring, amongst other things, contractual penalties. However, they will be obliged to pay for the energy consumed and for the energy transmission or distribution services provided. As indicated in legal doctrine, the value of each charge comprises a charge for the energy actually consumed and a distribution charge, which includes all costs associated with the supply of energy. Based on the above article, it should be noted that in the event of termination of an electricity supply contract, the consumer will be obliged to bear only the aforementioned costs; therefore, the supplier will not be entitled to claim any other costs, regardless of the terms of the contract .
2. Fixed-term contracts
It should be emphasised that in the case of fixed-term contracts, Article 4j(3a) of the Energy Law applies, according to which:
An end consumer may terminate a fixed-term contract under which an energy undertaking supplies that consumer with gas or energy, without incurring costs or compensation other than those arising from the terms of the contract, by submitting a notice of termination to the energy undertaking. In the case of a household consumer of electricity or gaseous fuels and an end consumer of electricity or gaseous fuels who is a micro-enterprise or small enterprise within the meaning of Article 7(1)(1) and (2) of the Act of 6 March 2018 – As regards the rights of businesses insofar as they consume electricity or gas for the purposes of their core business, the amount of such costs and compensation may not exceed the amount of direct economic losses incurred by the energy supplier as a result of the termination of a fixed-term contract by the customer.
As regards fixed-term contracts, the energy consumer is also entitled to give notice to terminate the electricity supply; however, in this case, they bear only the costs arising directly from the contract. This means that the energy supplier cannot demand that the consumer pay costs amounting to or approximating the price of the electricity not consumed (other than that provided for in the contract).
In the case of terminating both open-ended and fixed-term electricity supply contracts, the consumer should have the freedom to decide which supplier provides the electricity; therefore, they should be able to terminate the electricity contract without incurring costs equivalent to the value of the unused electricity. This is precisely what the Supreme Court indicates in one of its judgments, according to which the customer should be able to terminate the electricity supply contract without incurring costs, and therefore cannot be charged a contractual penalty corresponding to the value of the electricity not consumed .
Importantly, in the article in question, for micro-enterprises or small enterprises within the meaning of Article 7(1)(1) and (2) of the Act of 6 March 2018 – Entrepreneurs’ Law, the amount of costs and compensation associated with giving notice of termination may not exceed the amount of direct economic losses incurred by the energy supplier as a result of the termination of the electricity contract. The above provision directly limits the amount of compensation or contractual penalty that may be specified in the contract. If the supplier has provided for other, in particular higher, amounts in the contract, such provisions are invalid under Article 58 of the Civil Code.
3. Conditions relating to termination
Notice of termination of an electricity supply contract should preferably be given in writing, which is required for evidential purposes. However, attention should be paid to the terms of the contract, which may stipulate a specific procedure for giving notice of termination.
The above analysis of contract termination, particularly regarding contractual penalties, should not be equated with the penalty stipulated in the contract in the event of termination of the electricity contract due to the debtor’s failure to perform their obligations. In such a situation, the general provisions of the Civil Code will apply.
If a decision is made to terminate the contract, the first step should be to carefully analyse the terms of the contract and compare them with the applicable regulations. Attention should also be paid to the notice period in the contract, particularly its duration. In the case of an indefinite-term contract, a notice period of between 1 and 3 months usually applies, and termination does not incur additional charges. Fixed-term contracts, however, may contain clauses regarding penalties for early termination of the electricity contract, which may include a percentage of the contract value, a charge for the unused period, or other sanctions specified in the contract. The procedure for terminating an electricity supply contract requires a prior review of the contract terms, the drafting of a written notice of termination, and its delivery to the electricity supplier – most commonly by registered post with acknowledgement of receipt or electronically, where permissible. If you are interested in terminating your electricity contract, please contact HWW Hewelt Wojnowski Lindner i Wspólnicy.
A. Kościuk [in:] Energy Law. Commentary, 2nd ed., LEX/el. 2023, Art. 4(j).
Supreme Court judgment of 17 January 2020, IV CSK 579/17, OSNC-ZD 2021, No. 3, item 32.
Adrianna Bracichowicz is a dedicated lawyer at our firm, specializing in business law and also in litigation law. She graduated with a master's degree from the University of Wroclaw, and also developed her skills while studying at the University of Bergen in Norway under the Erasmus+ program. She is currently continuing her legal education by completing the first year of her lawyer's apprenticeship.
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