Still, power giant ČEZ's reluctance to change its system of setting energy prices through auctions is likely to keep prices high, even in the near future.

Concerns about the steady rise in electricity costs came to a head early this month after ČEZ auctioned off 400 megawatt-hours to 15 bidders.

According to a system the ÚOHS created last year to decrease ČEZ's 60 market share in electricity trading, the company is required to auction off 3 percent of its annual energy production to independent dealers. The distributors can then resell to customers.

The purchase prices at the auction this month indicated that the cost of electricity would likely rise more than 17 percent next year. Household prices will rise about 5.7 percent, but companies could see a spike of more than 20 percent.

Having learned a lesson from last year, when a 15 percent price increase at auction led to a 21 percent boost to companies, the Association of Major Energy Consumers (SVSE) asked the ÚOHS to intervene.

"We asked the office to halt the increase in prices," said SVSE Secretary Zdeněk Piskač. "We want to make sure that ČEZ cannot increase the price of electricity more than 17 percent."

He said energy costs are so high that some companies have even considered buying electricity from sources in Eastern markets.

ÚOHS Chairman Martin Pecina said he understood the SVSE's concerns. The annual increase in domestic and commercial energy prices should not exceed the percentage rise at auction, he said.

"It's not a bad idea to put a ceiling on annual increases in electricity prices to the level that would correspond with the rise of the price in the auction," he said. "We will not start any proceedings with ČEZ, but we'll rather try to reach a consensus on the issue."

Pecina said the ÚOHS was ready to initiate talks with ČEZ soon. But Alan Svododa, sales director at the company, said ČEZ wants to continue holding auctions even after next year, when they'll no longer be required by the ÚOHS.

Power of politics

The ÚOHS is not the only state authority concerned about energy costs.

Soon after the Aug. 1 ČEZ auction, Prime Minister Jiří Paroubek met with ČEZ CEO Martin Roman. According to media reports, Paroubek asked Roman to set the increases in electricity prices below 17 percent next year.

Most business analysts argue, however, that Paroubek's initiative was a populist move because the market dictates commercial energy prices. Nearly two-thirds of residential prices are set by the Energy Regulatory Office.

"No politician can do anything about the prices," Cyrrus analyst Jan Procházka recently told Mladá fronta Dnes. "Paroubek only wants to be seen as a good uncle fighting against greedy ČEZ."

Indeed, the Cabinet is trying to leverage its ownership of ČEZ. Industry and Trade Minister Milan Urban recently intimated that a portion of the company's annual profits could be used to compensate low-income groups for increasing energy prices.

The proposal was rejected by shadow Industry and Trade Minister Martin Říman of the right-wing Civic Democratic Party. He called it a "nonsystematic and socialist measure."

At the same time, Říman insists that ČEZ's auctions need to be changed, and he is not alone.

Former ČEZ CEO Jaroslav Míl, now chairman of the Industry and Transportation Association, said this kind of auction is outdated and leads to excessive growth in prices.