The new electricity bill, which will come into force on June 1, will mean a reduction of around 3.4% of the receipt of the 19 million domestic consumers covered by the regulated tariff (PVPC) without time discrimination, according to the estimates from the National Markets and Competition Commission (CNMC). However, in the case of consumers who were already under the hourly discrimination – about 10 million – the new scheme will cause the bill to increase by about 2 euros per month.
The key to the changes is a reduction of 68% in the regulated component of the bill – tolls (cost of transmission and distribution networks) and charges (costs associated with the promotion of renewables, extra-peninsular and the annuities of the tariff deficit) – which represent between 50-55% of the final price. The remaining 24% of what is paid on the electricity bill corresponds to the cost of energy and just over 21% to taxes.
The change occurs, according to the CNMC, to encourage more efficient consumption and for the consumer to play a relevant role in decarbonization so that the amount of the bill depends “more on when than on how much is consumed.”
The Government assures that the objective is not to lower the price of the bill, but the CNMC defends that habits such as avoiding putting several electrical appliances at the same time or ironing instead of at peak hours in the valleys could lead to savings.
Thus, the prices of tolls and charges will be different between time periods , both for power and energy. In the case of power from Monday to Friday on weekdays, the ‘valley’ will go from 00:00 to 07:00, while the ‘peak’ will be from 08:00 to 24:00. In the case of weekends and holidays, the power term will be ‘valley’ all day.
With regard to consumption, three time sections are set: ‘punta’, ‘llano’ and ‘valle’. The ‘peak’ period, in which the cost of tolls and charges will be higher, will be between 10 am and 2 pm and 6 pm and 10 pm; the ‘flat’ section, with an intermediate cost, will be between 08:00 and 10:00, 14:00 and 18:00 and between 22:00 and 00:00; and the ‘valley’ rate, the cheapest of the three, will be located between midnight and eight in the morning and will be applied during all hours of weekends and holidays.
More than 50% of the hours of the year are in the so-called ‘valley’, where consumption is 95% cheaper than in ‘rush’.
Thus, the CNMC understands that these savings in the bill can be even greater by adjusting that ‘peak’ and ‘valley power to the new structure of tolls and charges and with measures such as avoiding simultaneous consumption , that is, trying not to turn on several devices at the same time (for example, washing machine and kitchen or iron) -which could induce savings of between 200 and 300 euros per year for a consumer with high electrical equipment-, which will allow them to adjust the contracted power, or to charge the electric vehicle for the night.
In this way, it estimates that transferring 500 watts (W) of the contracted power from the ‘peak’ period to the ‘valley’ and 10% of the consumption from the peak period to the ‘flat’ and ‘valley’ periods can mean for the consumer savings in the regulated component of the bill of more than 15%, with a lower cost of receipt of around 7.5%.
Another example of savings for the regulator is an action as daily as ironing, whose transfer outside the ‘peak’ period to ‘flat’ can reduce its cost by 38 euros per year.
At the CNMC they are aware that this new model of encouraging consumption at different times may over time lead to a modification of the electrical system charging curve, so they do not rule out revising the time periods in the future. “The objective is for it to be a dynamic process,” said the same sources, who, in any case, affirmed that they do not foresee major changes in the consumption curve in the next two years.
For the free market, the trader must adapt the contract price to transfer the variation of the regulated component of the invoice, but can decide how to transfer it.
With the new model, the domestic consumer will not have to choose a toll or charge, although they will have to adapt their contracted powers and their consumption patterns to the new time periods. In this regard, by default your power in each period is the one you currently have contracted, although you will be able to modify the powers twice in the year and you will have information on your maximum powers for hourly periods on your bill.
In the event that it is in the PVPC with the right to the social bonus, the power will not exceed 10 kilowatts (kW) in any of the time periods.