Unauthorized Electricity Consumption: How Damages Are Calculated and What You Realistically Owe

When a distributor (ČEZ Distribuce, EG.D, PRE Distribuce) suspects unauthorized electricity consumption, it faces the question: how do you quantify damages when you don't know how much electricity was actually consumed? Real consumption cannot be measured retrospectively. The law therefore allows the use of a so-called penalty decree — a fictitious mathematical model that calculates damages from parameters of the connection point.

The problem: the calculation tends to be significantly higher than actual consumption and results in invoices in the range of tens to hundreds of thousands of CZK. The good news: there is a legal path to challenge it — and the Constitutional Court has ruled that the fictitious calculation does not automatically take precedence over reality.

What is the penalty decree

The penalty decree is the short name for Decree of the Energy Regulatory Office No. 359/2020 Coll. (and its predecessor 82/2011 Coll. for older cases). It sets out the method of calculating damages for unauthorized consumption from the distribution system when the actual amount consumed cannot be determined.

The principle is simple:

1. The distributor identifies the technical parameters of the connection point (fuse type, number of phases, installed power).
2. It determines the duration of unauthorized consumption (from the last metered reading to detection).
3. It assumes full use of installed power for the entire period.
4. It multiplies this by the ERÚ rate for unauthorized consumption (typically higher than the market price of energy).
5. It adds the cost of metering and investigation.

The result is typically many times higher than the actual consumption of a household over the same period.

Model calculation for an ordinary household

Consider a typical household with a 3×25 A main fuse and suspicion of 6 months of unauthorized consumption:

For comparison: the real consumption of an ordinary family household is around 3,000–5,000 kWh per year, i.e. about 1,500–2,500 kWh for 6 months. At a price of 5 CZK/kWh, the actual value of the consumed electricity would be 7,500 – 12,500 CZK.

Real consumption is therefore orders of magnitude lower than the fictitious calculation — and that is where the defense argument arises.

How the distributor's calculation differs from reality

Distributors generally calculate at the maximum: full installed power, maximum duration, full rate. In reality, however:

• a household never uses the full installed power continuously — even the most loaded houses use 10–20 % of installed power on average,
• you can demonstrate a pattern of ordinary consumption from previous years (before the alleged unauthorized period),
• you can document limited presence at the property (travel, long-term absence),
• you can demonstrate that certain appliances were not in operation (revision, replacement, idle state).

Arguments against the penalty decree that courts have accepted

The Constitutional Court and the Supreme Court have repeatedly addressed the application of the penalty decree. Key conclusions usable in defense:

1) The penalty decree is not an automatic obligation

Case law of the Constitutional Court and the Supreme Court repeatedly emphasizes that the fictitious calculation is not automatically a valid claim. The court has the duty to examine whether it corresponds to reality and whether it does not represent a hidden sanction (which should not be applied in civil proceedings). Specific rulings should be applied individually based on case circumstances.

2) The distributor must prove the amount of damages

The burden of proof of the actual amount of damage caused lies with the distributor. The penalty decree helps it where the exact amount cannot be determined, but it does not relieve it of the duty to allege and prove the real extent of unauthorized consumption.

3) Proportionality

The court must assess the proportionality of the claimed compensation to the circumstances of the case. If the fictitious calculation is clearly out of touch with reality (an order-of-magnitude difference), that is a strong argument against its use.

4) Limitation of partial claims

In some cases distributors claim periods that are already time-barred. A plea of limitation is often underestimated but can eliminate part of the claim.

What to prepare for defense of the calculation

To effectively challenge the calculation, you need evidence of the actual situation. Collect:

• consumption history from previous years (invoices, distributor portal statements),
• billing for previously consumed electricity (for order-of-magnitude comparison),
• documents on absence from the property (visas, accommodation records, contracts for stays elsewhere),
• technical parameters of appliances (photos of labels, purchase documents),
• records of maintenance and repairs (revisions, replacement of wiring),
• any photographic documentation of the connection point before the investigation (if any exists),
• inspection protocol of the distributor (request a copy),
• expert opinion of a technician (if you challenge the measurement method).

Model impact of defense

From our practice: in a typical case with a fictitious calculation of 600,000 CZK, successful objections led to reduction to 80,000 – 150,000 CZK (or to dismissal in civil proceedings after acquittal in the criminal case). The keys were:

1. challenging the duration of unauthorized consumption,
2. evidencing real consumption from a comparable period,
3. invoking Constitutional Court case law on the non-automatic applicability of the penalty decree,
4. a quality expert opinion challenging the measurement method.

Important: Every case is different and the outcome depends on the specific circumstances. The most important thing is to start the defense immediately, as soon as the first demand arrives — later action has less impact.

What to do when an invoice or demand arrives

1. Do not sign any "acknowledgment of debt" — the distributor will propose this out of court, but acknowledgment of debt weakens your legal position.
2. Request all underlying materials — inspection protocol, calculation under the formula, technical parameters of the connection point.
3. Contact an attorney — ideally one specialized in unauthorized consumption cases (a specific area).
4. Collect evidence — consumption history, comparable period, technical evidence.
5. File formal objections — against the amount and the method of calculation, with reference to case law.

Summary

The ERÚ penalty decree allows fictitious damage calculation, but it is not absolute. Case law repeatedly limits it and courts must examine reality. The fictitious calculation tends to be orders of magnitude higher than actual consumption and a qualified defense can lead to its fundamental reduction or rejection.

If you are facing a demand or invoice from an electricity distributor, our office can help you evaluate the calculation and design a defense. We consistently achieve successful outcomes in this area in both the criminal and civil tracks.