Spanish government starts proceedings to change electricity tariffs

The price of electricity in Spain and Portugal on Tuesday, March 15

The price of electricity in Spain and Portugal on Tuesday, March 15. image: Wikipedia

The Spanish government has started proceedings to change electricity tariffs for consumers.

The regulated tariff price for electricity, known as PVPC, in its present format has its days numbered. The Spanish Government announced yesterday, Friday, October 1, the launch of a public committee to discuss suggestions for its modification.

The Voluntary Price for the Small Consumer (PVPC) currently marks the amount that almost 11 million Spanish consumers pay for electricity, 40% of the total. Its design is directly linked to the price that the wholesale market auction (pool) sets every day and can be, as we have all witnessed, very volatile indeed.

Due to the way the system works, it can cause spectacular price rises, as happened when the price reached its historical maximum yesterday, spiking at 216 euros per megawatt-hour. The price rises worsened in June and the electricity companies have blamed the methodology for calculating the PVPC as one of the reasons why this rise has become a social problem so quickly.

Now, with the price of electricity at its maximum and with a seemingly unstoppable upward trend ahead, the Government wants to collect any suggestions from consumers on how to disconnect the price paid by them from the volatility of the wholesale market with a public consultation that will remain open until October 22.

Currently, only consumers who use this rate can benefit from the social bonus for vulnerable consumers that allow, if certain requirements are met, to obtain discounts off their bills of between 25% and 40%, and have access to other additional protections, such as the recent vital minimum supply agreement.

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Ron Howells

Ron actually started his working career as an Ophthalmic Technician- things changed when, during a band rehearsal, his amplifier blew up and he couldn’t get it fixed so he took a course at Birmingham University and ended up doing a degree course. He built up a chain of electronics stores and sold them as a franchise over 35 years ago. After five years touring the world Ron decided to move to Spain with his wife and son, a place they had visited over the years, and only bought the villa they live in because it has a guitar-shaped swimming pool!. Playing the guitar since the age of 7, he can often be seen, (and heard!) at beach bars and clubs along the length of the coast. He has always been interested in the news and constantly thrives to present his articles in an interesting and engaging way.