The electric bill, in the bones, continues without reaching a ceiling

CR

Almost all taxes have come from the electricity bill, as well as a part of the fixed costs, without avoiding new disproportionate increases

Jose Maria Waiter

A year ago now, the Government launched what would be the first major decree to cushion the effects of the rise in electricity in Spain. At that time, war was not even on the horizon –although Russia's threats with gas cuts were–, but the increase in electricity was beginning to make the receipts that reached consumers unviable. That package contained tax and regulatory measures that followed the same path: reducing part of the concepts that were taxed on the receipt to make it more affordable.

A year later, the electricity bill has completely changed. It hardly contained epigraphs until last June, when the Iberian exception was launched. She stayed on the chassis. In fact, if you compare a receipt from this summer with one from the previous one, you can see how the weights of each of the realities included in any receipt have changed.

The cost of electricity consumed by the home in each invoiced period (euros per kWh consumed) used to account for a quarter of everything that was paid to the electricity company each month. Now, it represents more than 75% of the bill that we pay to energy companies. The problem is that this concept is the one that has risen the most in the last year. To give an example, in the case of the regulated tariff, in September of last year consumers covered by this modality paid an average of 0.21 euros/kwh, a cost that is already high compared to the average of recent years. . Now, that price is above 0.36 euros/kwh. That is, 70% more expensive than a year ago.

The transformation

of the electricity bill

Distribution of electrical costs

In each period, in % of the total

CHANGES IN THE LAST YEAR

electrical consumption

PVPC rate (monthly average,

in euros/kwh)

Charges

Remuneration to the old renewables, payment of the accumulated electricity deficit,

and insularity due to the higher cost of production in the archipelagos

tolls

Payment of the transport and distribution networks of electricity from the generation plant to each home

Source: CNMC, Ministry of

Ecological Transition, Red Eléctrica

The transformation

of the electricity bill

Distribution of electrical costs

In each period, in % of the total

CHANGES IN THE LAST YEAR

electrical consumption

PVPC rate (monthly average,

in euros/kwh)

Charges

Remuneration to the old renewables, payment of the accumulated electricity deficit,

and insularity due to the higher cost of production in the archipelagos

tolls

Payment of the transport and distribution networks of electricity from the generation plant to each home

Source: CNMC, Ministry of

Ecological Transition, Red Eléctrica

The transformation

of the electricity bill

Distribution of electrical costs

In each period, in % of the total

CHANGES IN THE LAST YEAR

electrical consumption

PVPC rate (monthly average,

in euros/kwh)

Charges

Remuneration to the old renewables, payment of the accumulated electricity deficit,

and insularity due to the higher cost of production in the archipelagos

tolls

Payment of the transport and distribution networks of electricity from the generation plant to each home

Source: CNMC, Ministry of

Ecological Transition, Red Eléctrica

Taxes represent the most diminished part during the last year in the electric bill. The Government decided in June of last year that the VAT (Value Added Tax) applied to these receipts would drop from 21% to 10%. It was an unprecedented decision, after several months in which the Ministry of Finance insisted that the European Commission prevented lowering this tax in Spain unilaterally. Along with this reduction is the suspension of the generation tax (the one paid by electricity companies). Although later new tax actions came with the reduction of the electricity tax from 5.11% to 0.5%. And the last one: VAT from 10% to 5%. In total, taxes now represent an average of 5.7% of the receipt as a whole.

Costs go down

The fixed part of the bill, that money that we pay even if we do not consume a single kilowatt (kw) of electricity, has also lost weight in the last 12 months. The first package of measures of the Executive lowered the charges by 90%. It is about the compensation aimed at paying the old renewables, the electricity deficit of the insularity. These same charges are now reduced by 33%, compared to 90% that were suspended at the time, which was a relief for the bill as a whole. As for tolls (retribution for the transport and distribution of electricity), since January they have been reduced by just over 4%. Although in the last quarter of last year that reduction was even greater. In an average home with a regulated tariff, with contracted power of 3.5 kW in the two sections and 3,600 kW, the savings can be around 40.64 euros during this year.

Despite all these measures, the average electricity bill has continued to increase in recent months as a result of the rise in electricity generation, the cost of which has practically eaten up the reductions in taxes, charges and tolls applied since June 2021.

In addition, to further curl the loop, since June 15 the Iberian cap has been in force (the limitation of the price of gas that is used to generate electricity). This measure needs to be compensated to pay the gas companies the real price of gas compared to the limited one. It supposes an additional charge to the receipt, which readjusts the reduction in the price of kWh derived from the limitation of the price of gas. This new concept that is incorporated into receipts will be in force, at least, until May 2023, when the Iberian exception expires.

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