(Bloomberg) -- Poland is planning to cut the maximum electricity tariff that utilities can levy by 19% in order to reduce the costs of state subsidies and help shield households from the full impact of price increases.

The Climate Ministry expects maximum tariffs to be “recalculated” to about 598 zloty ($148 dollars) per megawatt-hour, compared with the existing 739 zloty, and maintained through the end of 2025, it said in the new draft setting power and heating prices from July. The final level will be set in talks between the country’s energy regulator and utilities, including PGE SA, Enea SA and Tauron SA.

The government wants to protect Poles from the full impact of a jump in energy costs when current limits end in July. At present, actual prices for households are capped at 412 zloty, with the government compensating suppliers for the difference between that and the tariff. Under the proposal, the cap for consumers would rise, but to a maximum 500 zloty, while the tariff the utilities can charge would be trimmed. The government says that wholesale prices have fallen from previous highs.

The total cost of new energy regulations, which also include vouchers to assist low-earners, is estimated at 6.4 billion zloty this year and another 1.8 billion zloty in 2025, according to calculations included in the new draft. The proposals have sparked controversy, with the Ministry of State Assets warning that they may weaken utilities’ financial situation, and the government is due to discuss the details further this week.

The cabinet is facing an intense economic agenda, as it considers in the forthcoming week a fiscal plan for the next three years that may reveal the total cost of fresh social programs after a new coalition took power in December. It will also decide on changes to plans on how to deploy European Union recovery funds.

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