Information about approval of G tariff for PGE Obrót and necessity to create provision in Supply segment

The Management Board of PGE Polska Grupa Energetyczna S.A. (“PGE”, the “Company”) discloses that on December 15, 2023 the President of the Energy Regulatory Office (the “ERO President”) approved the electricity sale price for G tariff off-takers for year 2024 for PGE Obrót S.A. (PGE’s subsidiary) at an average level of PLN 739.35 per MWh (price excluding value added tax and excise tax).

The approved tariff does not fully cover justified and incurred by PGE Obrót S.A. costs of electricity purchase, which take into account the profile of consumption by customers.

Accordingly, the Company has evaluated the impact of the value of approved tariff on its operations and has identified a potential loss in the Supply segment due to non-recognition by the ERO President of incurred costs of electricity purchase that - as at the publication date of this report - is estimated at approx. PLN 860 million.

In view of the above, PGE Obrót S.A. intends to submit at the earliest possible date an application to the ERO President for change of G Tariff.

Lack of coverage of costs will result in the creation in the consolidated financial statements of the PGE Capital Group for 2023 of a provision for onerous contracts (based upon IAS 37 Provisions, Contingent Liabilities and Contingent Assets). The Company, along with the auditor, will be analysing influence of the above on the consolidated results of the PGE Group in accordance with the International Accounting Standards. Value of the provision will be presented in the periodic report of the PGE Capital Group for year 2023.