Energy sales contract in an era of rising costs – how to renegotiate its terms?

In 2025, the electricity market in Poland will undergo significant changes. Following the end of the price freeze mechanism for businesses, companies should reassess the terms of their existing contracts – in many cases, contract prices are currently higher than market rates. Although domestic customers continue to benefit from statutory price caps, they too should prepare to renegotiate their contracts as they approach expiry or in the event of regulatory changes, to avoid a return to the unfavourable conditions that existed prior to the price freeze.

1. Why should you consider renegotiating your energy supply contract?

In 2022, in response to a sharp rise in energy prices, numerous entities decided to enter into long-term electricity supply contracts, in which the rates reached as high as PLN 1,500/MWh and more. Now that prices have been unfrozen, businesses have automatically reverted to the contract rates. Given the current, significantly lower market prices, such costs are disproportionate, which is why customers should consider renegotiating the terms of their energy supply contracts, as this could yield real savings.

2. How to renegotiate an electricity supply contract?

   • Specifics of renegotiation for different customers

The process of renegotiating an electricity supply contract varies depending on who the party is. The strategy chosen by the customer, as well as the potential termination of the contract in the event of a failure to reach an agreement, are closely linked to their status. Different rights apply to consumers or sole traders (JDG), and different ones to large businesses. Consequently, the negotiation risks and the scope of protection also vary.

• Consumers – natural persons not engaged in business activity

Consumers enjoy the broadest statutory protection. Pursuant to Article 4j(3) of the Energy Law, they may terminate a contract concluded for an indefinite period at any time without incurring additional costs (apart from the energy actually consumed), which is a significant advantage in the renegotiation process. In the case of a fixed-term contract, any termination costs may not exceed the actual economic losses incurred by the energy supplier in the event of early termination of the contract. Additionally, consumers are protected under the provisions of the Civil Code, including Article 385¹ et seq. concerning prohibited contractual terms. In practice, it often happens that suppliers attempt to discourage consumers from terminating or renegotiating a contract by invoking non-existent ‘contractual penalties’ which, in reality, have no basis in law.

• Sole traders – micro-entrepreneurs acting as quasi-consumers

Sole traders are also protected if they meet the definition of a so-called quasi-consumer (i.e. a natural person who enters into a contract with a seller directly related to their business activity, but which is not of a professional nature). Under Article 4j(3a) of the Energy Law, they may terminate a fixed-term contract, and any costs of termination may not exceed the amount of direct losses incurred by the supplier. Importantly, as a rule, quasi-consumers may also invoke consumer protection provisions (Article 385⁵ of the Civil Code). In practice, however, many suppliers treat quasi-consumers as business customers, attempting to enforce full contractual charges. Meanwhile, in accordance with the regulations, they may not incur costs higher than the supplier’s actual loss resulting from the early termination of the contract.

• Other businesses – medium and large companies

The situation is different for larger entities – they do not benefit from the statutory protection afforded to consumers and micro and small businesses. Renegotiation of the contract therefore depends solely on the willingness of the parties and commercial conditions; consequently, it will be crucial to prepare a comparative analysis of current market prices and the prices set out in the contract, and to demonstrate that maintaining the current rates is economically unjustified. It is also worth referring to the commercial relationship with the supplier. It is also good practice to gather offers from alternative suppliers as a benchmark for negotiations.

2.2 The process of renegotiating an energy supply contract

The process of renegotiating an energy supply contract, although based on the voluntary agreement of the parties, requires a well-thought-out strategy and thorough preparation. It is crucial not only to identify the reasons for requesting a change in terms, but also to skilfully refer to the legal basis and market realities that justify the need to adapt the contract to the current economic situation. The stages for which an entity wishing to renegotiate a contract should prepare are set out in detail below.

Step 1: Analysis of the current contract

Before commencing negotiations, it is worth thoroughly analysing the existing contract, paying attention to:

• the contract term;
• the energy rates specified;
• termination conditions;
• any contractual penalties.

Step 2: Preparing your case

It is worth preparing a substantive justification for the need to renegotiate, referring to:

• current market energy prices;
• legal provisions allowing for the termination or amendment of the contract;
• potential financial losses resulting from continuing under the current terms.

Step 3: Contacting the energy supplier

You should formally contact the energy supplier with a notice of termination of the contract terms and a simultaneous proposal to renegotiate the contract, presenting your prepared arguments and the expected changes to the contract terms.

Step 4: Negotiations and conclusion of an addendum

During negotiations, the parties may reach an agreement on new contract terms, which can be formalised in the form of an addendum. The addendum should precisely specify the amended terms, such as new rates, the duration of the contract, or any provisions regarding termination.

3. Renegotiation of an electricity supply contract – Summary

Renegotiating an electricity supply contract in 2025 could yield significant financial benefits. It is worth carefully analysing the terms of the contract and exercising your rights to adjust your obligations to current market conditions. If you are interested in issues such as withdrawing from an electricity contract, terminating an electricity contract, cancelling an electricity contract, or if you need assistance with the process of renegotiating or terminating an electricity contract, please contact HWW Hewelt Wojnowski Lindner & Partners to ensure your company receives professional support at every stage.