Consumer associations criticize Spain’s new electricity billing system | Economy and business


A change in electricity tariffs went into effect on June 1 in Spain, a change that could save consumers on their bills, according to competition watchdog CNMC. The new system is not without controversy, however, with consumer organizations denouncing that the measures could hit the most vulnerable households with additional costs. And depending on the type of consumer contract so far, the monthly bill could actually go up to 27%, according to these groups.

The new billing system, which affects consumers with contracted power of less than 15 kW – typically households and small and medium-sized businesses – uses a single tariff called 2.0TD instead of the six different ones available so far.

It also introduces three periods when electricity is either cheaper or more expensive, theoretically giving consumers a chance to save money by concentrating the use of their devices during off-peak hours. The cheapest periods are from midnight to 8 am Monday to Friday, weekends and holidays. The most expensive levels are from 10 a.m. to 2 p.m. and from 6 p.m. to 10 p.m. on weekdays. The rest are average prices.

Consumers can now have two subscribed power capacities (power contract) instead of one, and these may be different at peak and valley times in order to increase savings.

The system will represent savings of around 3.4% for 19 million households that were not already billed on differentiated time slots (Discrimination schedule), said the CNMC. For another eight million people, the new system actually represents an additional expense of € 2 per month.

There is also the question of who is switching to the new system. Of the 27.5 million Spanish consumers, around 10.7 million are subject to a regulated tariff called PVPC: for them, the change will be automatic. But the millions more on an unregulated system won’t necessarily be replaced by their business and should consult with their utility to see which plan is best for them.

According to the CNMC, changing your habits could result in an annual saving of 200 to 300 €. Other money-saving tips from the regulator include not using multiple devices at the same time, or ironing during off-peak hours, as irons tend to be some of the most energy-intensive devices in the world. a house.

But according to the Consumers and Users Organization (OCU), burden sharing is likely to excessively penalize the small consumer and benefit the larger ones. According to the OCU, while the price increase due to the new system could amount to 8.5% for some households, it could reach 27.3% for others depending on the supplier. “Despite the fact that the changes only affect the regulated items of the invoice, the majority of sellers who have communicated their rates for new customers apply much higher increases than expected, and existing customers still do not experience surprises. that their business has. in reserve for them, â€declared the UCO. The organization specifies that the exceedances of regulated hikes cannot be applied if there has not been a prior warning.

For consumers benefiting from the new billing system, the OCU calculates that they could save up to € 574 if they use their devices about half the time during the cheapest period rather than all the time during peak hours. . It is currently estimated that an average customer consumes 29% of their electricity during peak hours, 26% during average tariff hours and 45% during off-peak periods.

Meanwhile, the organization Facua-Consumers in Action says asking customers to use their devices at night is “degrading” for the most vulnerable consumers. “You can’t blame the consumer for their high bill just because they didn’t do the ironing or turn on their appliances during the cheapest times,†says Facua. “These times coincide with when people should be resting.”

The organization criticizes the fact that the new system makes the consumer responsible for having efficient devices, while utilities have less incentive to make the necessary investments to improve distribution networks. Facua also points out that a high percentage of families do not live in energy-efficient houses, do not have devices that can be programmed to work at a certain time of the day, or machines that can store energy at a certain time of the day. cheaper hours to use. during the day.

This association adds that the most expensive times of the day coincide with periods of high demand for heating or cooling, or when people are working from home.

Frequently Asked Questions About New Electricity Bills

Why is this change being made? The aim of the new tariff system, according to the CNMC, is to encourage more efficient consumption of electricity and allow consumers to play an active role in the country’s decarbonization efforts. The monthly bill will now depend more on “when, rather than how much, we consumeâ€. The regulator also hopes that more efficient use of energy will reduce the need for new investments in the grid.

How is the invoice broken down? About 55% of the bill reflects the peajes (transport and distribution costs) and cargoes (set by government and linked to renewable energy costs and other expenses). Another 24.1% represents the cost of energy production and 21.4% taxes.

Why the different time levels? The idea is that the “when” now matters more than the “how much”. The prices charged for peajes and cargo will be different depending on whether it is a rush hour, low or medium, and these prices will be applied to both consumption and the contracted power.

What is the impact of the new tariffs? The prices of the peajes and cargoes are expected to fall by 6.7% and 6.8%, which will translate into savings for 19 million consumers already subscribed to a plan without an hourly rate. As for the nine million customers who benefited from hourly pricing, the new system increases their bill by around € 2 per month.

What should the consumer do? For consumers of the regulated tariff system known as PVPC, the change will be automatic. For those who live in a free market system (liberalized market), the company will adjust the contract prices to reflect the price change, but it can do this in a number of ways. Customers should check with their utilities how they cope with changes and whether they want to change contracts.

Limitation of profits for hydraulic and nuclear power

Also on Tuesday, the government approved a bill to limit windfall profits from hydropower and nuclear power plants, as rising CO2 prices push up electricity bills. A government source said the proposed new electricity regulation, which will now be subject to public consultation, aims to reduce consumers’ electricity bills by 4 to 5 percent depending on CO2 prices, the report reported. Reuters news agency.

english version by Susana Urra and Simon Hunter.


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