The July bill was the third most expensive in history, although the measures adopted by the Government prevent it from rising even more
Gas, electricity, water and food. Spanish families are still drowning in an avalanche of bills that have already caused changes in habitual consumption habits. A change that the Bank of Spain has detected more clearly in vulnerable households, warning that many of them have been forced to eliminate items from their daily budget to face the escalation of energy.
The fiscal measures adopted by the Government to lower this cost have succeeded in limiting the impact of the runaway prices in the wholesale market. But they have not completely erased, far from it, the energy wound that families have suffered for months.
In fact, and according to calculations by the Organization of Consumers and Users (OCU), the average electricity bill, calculated on an average consumption of 3,500 kilowatts (kw)/year with a power of 4.6 kw, reached 115, 27 euros in July. It is the third most expensive bill in history, after March this year (143.03 euros) and December 2021 (119.17 euros). And it exceeds by just over 43 euros that of July last year, when consumers paid 72 euros on average.
Since then, twelve months of energy chaos of which only four have registered average bills below 100 euros: August, September and November 2021; and May of this year, when the receipt was 98.8 euros. In between, a wave of tax measures to ease the pocket, among which the reduction of electricity VAT from 21% to 10% -and now to 5%- stands out, in addition to the reduction of the Special Tax on Electricity or the suspension of the one that tax production.
The potential beneficiaries of the electricity social bond have also been expanded and an energy saving plan has been launched which, in its second week of operation, has reduced the country’s consumption by 9.5%, as detailed yesterday by the director general of the Institute for the Diversification and Saving of Energy (IDAE), Joan Groizard.
Iberian exception
The star measure of the Government, however, has been the cap on gas with which the Executive hopes to reduce consumers’ bills by between 15% and 20%. At the moment, the so-called ‘Iberian exception’ has managed to contain to a certain extent the increases in energy prices in the wholesale market of Spain and Portugal compared to what happened in other countries such as Germany or France, where they continue to beat maximum after maximum.
However, the plan has not led, for the time being, to a notable drop in the bill. “It is rather a moderation of the rise than a decline as such, since prices have continued to climb,” they explain from OCU.
Among other things, because the implementation of the mechanism since mid-June has coincided with several heat waves and completely runaway gas prices. And when the real cost of gas exceeds the 40 euros/MWh established as a ceiling for the first six months of the measure, the companies that have to activate the combined cycle plants to cover all the demand must be compensated. Thus, the more expensive the gas is and the more quantity is used to produce it, the higher this compensation will be.
According to the regulations, its cost is distributed among all the users of the regulated market (PVPC) and the free market contracts indexed to the wholesaler. The charge will also apply to all fixed contracts that are renewed between April 26 and May 31, 2023.
Thus, as these customers are incorporated, the total cost will be lower, as it is distributed among a greater number of consumers. But data from the futures market anticipates that August will be tough for households. With gas at new highs in the face of a new threat of supply cuts, the average price of electricity will rise 35% this Tuesday to 365.33 euros MWh, according to data from the operator OMIE.
That figure is the result of adding the auction average to the compensation paid for the gas cap. It is the highest level since the measure came into force, but in its absence the price of electricity in Spain would be 476.76 euros/MWh. That is, 111.43 euros more than with the compensation.