Penalty from the President of the Energy Regulatory Office for failure to conduct a company energy audit
In this article from the series "Green Transformation in the Light of the Law", attorney Maciej Stępień addresses – in a Q&A format – the issue of penalties that may be imposed on entrepreneurs by the President of the Energy Regulatory Office for failing to conduct a company energy audit.
It should be noted that under current legislation, failure to carry out a company energy audit for so-called large enterprises may result in a financial penalty. The amount may be up to 5% of the revenue achieved in the previous tax year. The penalty is a type of financial administrative sanction for failure to comply with the statutory obligation to conduct a company energy audit.
What is the reason for the obligation to conduct a company energy audit?
The legal basis for the audit obligation is the Act of 20 May 2016 on Energy Efficiency, specifically Article 36. With the exceptions indicated in the act, every large entrepreneur is required to carry out a company energy audit every 4 years or commission it to an independent entity with the relevant knowledge and professional experience.
Is every entrepreneur obliged to carry out a company energy audit?
No, the mandatory audit applies only to large entrepreneurs as defined by the Act of 6 March 2018 - Entrepreneurs' Law. Therefore, micro, small and medium-sized enterprises are exempt from the audit obligation. Large enterprises are defined as companies that in the last 2 years on average:
- employed at least 250 people
or
- achieved annual net turnover from the sale of goods, products and services and financial operations exceeding the equivalent of 50 million euros in PLN, and the total balance sheet assets at the end of one of those years exceeded the equivalent of 43 million euros in PLN.
We have prepared an infographic with key information: DB Energy infographic - company energy audit?
See infographicIs carrying out the audit alone sufficient to avoid penalties?
In addition to conducting the audit, the entrepreneur is required to notify the President of the Energy Regulatory Office (URE) of the completed company energy audit within 30 days from the date it was carried out, but no later than by 31 December of the year in which the entrepreneur is obliged to conduct the company energy audit.
It is also worth knowing that the entrepreneur should keep the data related to the company energy audit for control purposes for 5 years.
What determines the amount of the penalty?
The legitimacy and amount of administrative financial penalties are subject to the discretion of the authority imposing the penalties. The maximum penalty is 5% of the revenue achieved in the previous tax year. The act does not provide for a minimum penalty.
Can one appeal against the decision of the President of the Energy Regulatory Office?
An appeal may be lodged with the District Court in Warsaw – the court of competition and consumer protection – within 14 days of receiving the decision imposing the penalty. However, it is worth knowing that the decision should be preceded by a notice from the President of the Energy Regulatory Office on the initiation of administrative proceedings regarding the imposition of a penalty – which is the moment when one may attempt remedial action, e.g. conduct the audit and apply for waiving the penalty or, if imposed, request the minimum amount.
Can the management board of a large company be held liable for the penalty imposed by the President of the Energy Regulatory Office?
Each member of the management board is generally liable to the company for damage caused by culpable actions or omissions contrary to the law. Since the law requires company energy audits to be conducted every 4 years, members of the management board may be held liable to the company for failing to fulfil this obligation.
Has the President of the Energy Regulatory Office imposed penalties in the past? What amounts?
Revenues from financial penalties constitute state budget income. This has led to concerns among entrepreneurs that penalties of up to 5% of revenue may become a tool for pursuing an unfavourable fiscal policy. However, according to information provided by the President of the Energy Regulatory Office to the minister responsible for energy, several thousand notifications from entrepreneurs about completed company energy audits have been submitted to the Energy Regulatory Office, and no penalties have been reported so far in this regard.
Nevertheless, the provisions allowing for the penalisation of entrepreneurs remain in force and may be applied by the President of the Energy Regulatory Office during the upcoming audit cycle at the turn of 2024/25.
What happens if the deadline for conducting, for example, the next company energy audit is missed?
It is definitely advisable to carry out or commission the audit as soon as possible. The Energy Efficiency Act provides for the possibility for the authority to refrain from imposing a penalty if the violation is minor and the entrepreneur has fulfilled the audit obligation before the President of the Energy Regulatory Office became aware of the failure to meet the deadline.
