Sunday, July 3

The Government withdraws discounts from its electricity shock plan and causes a rise in the bill

The shock plan that the Government launched last summer to cushion the rise of the receipt of the light included steep tax cuts and a drastic cut of the fixed part of the bill. With the wholesale market still runaway and with the futures market anticipating that high prices will persist this year, The Executive has decided to temporarily maintain the tax cuts, but withdraw the extraordinary discounts of electricity charges since January 1, as confirmed this Monday by El Periódico de España.

The Government has extended until April the reductions of the VAT, the special electricity tax and the 7% tax on electricity production. But the Ministry for the Ecological Transition has put an end to the drastic reduction of 96% of the regulated charges that it applied until the end of the year, as stated in the ministerial order of charges of the electricity system for 2022.

The regulated charges of The receipt (which represents a net cost in the receipt of about 4,800 million euros this year) are used to pay the premiums for renewables, the extra costs of the extra-peninsular territories or the payment of the debt of the electricity system, among other aspects, and the The government reduced them in an extraordinary way between September and December 31 to stop the blow to homes and companies from the rise in electricity.

The new charge sheet for 2022 already published in the BOE eliminate that extraordinary discount, so from January they are applied again normally and, with this, there is a rise of the receipt of all customers Spanish electric companies in relation to what they paid until December 31. The order of charges entails strong increases in all customer rate segments, for all periods and both in the charges that apply to the power term and that applied to the energy consumed in relation to those that are currently paid.

However, the Government emphasizes that its proposal for positions for next year represents a reduction in relation to the average of positions for 2021 as a whole (including the eight and a half months of normal charges and the three and a half months of extraordinary reduction ). According to government calculations, for households and SMEs the The reduction of charges will be 32.8% in relation to the whole of last year. And for the rest of types of consumers the reduction ranges between 33% and 28% depending on the tariff segments.

Pending cuts

As stated in the documentation submitted for public consultation by the Executive last month, the reduction of the charges for 2022 in relation to last year as a whole will be possible fundamentally due to the new income that the electricity system will receive thanks to two laws that are now in force. pending in the Courts and which are expected to be in force in the second half of next year.

On the one hand, the Government intends to launch the National Fund for the Sustainability of the Electricity System (FNSSE), with which part of the costs will be shared to pay the remuneration of regulated renewable energies among all energy sources, so part of the cost is taken from the electricity bill to be charged to oil or gas companies, for example . The FNSS will mean an additional net injection to the electricity system revenues of 663 million, which will no longer have to be charged to the bill.

On the other hand, the bill for the reduction of electricity revenues due to CO2 not emitted for nuclear, hydroelectric and wind power plants, which will mean a cut in companies’ income and an injection for the electricity system accounts of 483 million euros. In total, about 1,140 million extra that stop being charged to the invoice and that allow the charges to be partially reduced.

The electricity bill includes two types of regulated fixed costs. On the one hand, the charges established by the Government to cover expenses related to energy policy. On the other, tolls, which are used to finance the costs of electricity transmission and distribution networks and to reward companies for their investments in these networks. The amount of the latter is set by the National Markets and Competition Commission (CNMC) and for this year it has established a 4.6% reduction in tolls.

The Government Promise

2021 has been the year with most expensive electricity price in history in the wholesale market, with an average of 111.9 euros per megawatt hour (MWh), triple that of the previous year, as a result of rising gas prices and CO2 emission rights. The Government has fulfilled its promise that last year the annual electricity bill would be similar to the one paid in 2018 thanks to the measures adopted to cushion the impact on the bill of the rise in the electricity market.

Related news

According to the Government’s calculations, the average of all Spanish consumers paid an annual electricity bill of 613 euros, compared to the 608 euros paid in 2018 (which is 635 euros in relation to the effect of inflation in that period) and the 696 euros that it would have been paid for last year without the crash plan measures.

The Executive performs these calculations by making an average of all domestic customers, both the regulated tariff (10.5 million customers who last year paid 20% more than in 2018 because they depend on the evolution of the wholesale market) and the free market rates (16.2 million users paid less than last year for having contracts with stable and fixed prices).

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