Electricity bills rose 18% in November

Madrid (EFE).- The electricity bill of a consumer subject to a regulated tariff or PVPC increased by 18% in November compared to October, almost reaching 64 euros, making it the most expensive since February 2023. .

This is because November (€104.43/MWh) was the month with the highest wholesale electricity price in 2024 due to lower wind and nuclear power production, leading to increased use of combined cycle gas, a fuel whose price also decreased. has increased significantly.

It should be added that in 2024, tax breaks, including VAT, which the government applied to reduce the impact on consumers of rising prices caused by the war in Ukraine, will be reduced or reduced.

Typical consumer’s electricity bill

According to the National Markets and Competition Commission (CNMC) simulator, the electricity bill of a typical consumer with a contracted capacity of 4.4 kilowatt-hours (kW) and a monthly consumption of 60 kilowatt-hours (kWh) during peak hours is 70 kWh cost per plain and 120 kWh in the valley in November is 63.89 euros, which is 18.13% higher than in October and Na 34% higher than the same month in 2023.

This typical consumer will accumulate a bill of €564 in the first eleven months of 2024.

The bill for the whole of 2023 for this consumer, although in this case it corresponds to 12 months of the year, amounted to €633.17, which represents a sharp decrease compared to the €1,096.53 it amounted to in 2022 and €824.55. euros in 2021, in years when electricity prices have risen sharply, especially since Russia’s invasion of Ukraine in February. 2022.

The electricity bill in November is the highest for the whole of 2024, exceeding the figure for August, which was 57.19 euros; and the highest amount since February 2023, when it reached 64.48 euros.

The electricity bill includes, in addition to the price of electricity, regulated costs (tolls), rental of measuring equipment, markup of the sales company for services provided and taxes.

It was in order to limit the impact of rising electricity prices on the market on consumers that the government reduced taxes, which were then gradually reimbursed, for example, a special tax on electricity or VAT.

Partial VAT refund

The latter, whose rate was reduced from 21% to 5%, remained at this reduction until the end of 2023, and in 2024 it will move to 10%, although an exception was established: if in a month the average daily wholesale price on the market did not exceed 45 euro/MWh, VAT of 21% will apply next month.

Thus, in March, April, May and June, due to the very low prices on the daily wholesale market in the spring, which reached a monthly historical low of 13.67 EUR/MWh in April, a VAT of 21% was applied.

In those months, invoices amounted to €44.85 in March, €42.1 in April, €47.13 in May and €52.51 in June, an increase from July, which was €52.17.

If nothing changes, the 21% VAT on electricity bills will be fully refundable in 2025, up from 10% in 2024, excluding the months mentioned above.

PVPC Reform or Adjustable Rate

In addition, 2024 was the first year that the Petty Consumer Voluntary Price (PVPC) reform, known as the regulated tariff, was applied to reduce the weight that the daily wholesale price had on the invoice from a consumption perspective. , which amounted to 100%.

As of January 1, 75% of PVPC is determined by the daily price and 25% by the futures market, with the latter percentage increasing to 40% in 2025 and 55% in 2026.

The purpose of the PVPC reform, in addition to the government’s commitment to Brussels when the cap on the price of gas for electricity generation was approved, was to reduce exposure to market volatility for customers who have this rate, who have 8.6. millions of consumers.

Among them are beneficiaries of the social bonus, who must have a rate that allows them to receive a discount on energy bills for consumers classified as vulnerable.

This reduction in PVC consumers’ exposure to the daily market means that in months when prices were so low, such as February, March, April and May of this year, they did not receive the same average benefit as if the weight was 100%.

However, in months when, for example in November this year, 100 EUR/MWh is exceeded, this does not have the same impact as if the weight were 100%.