The reduction of the costs of the electricity system charges is approved

EDITING |

As a result of the latest measures from the Government of Spain, starting from September 16 according to Royal Decree-Law 17/2021, a reduction of the costs of the electricity system charges and the electricity tax, among other aspects, has been approved. Approving a package of measures to tackle the unstoppable rise in electricity in 2021, aiming to lower the bill by 22% until the end of the year.

The price of gas breaking records in international markets. The cost of CO2 emissions skyrocketed. Reservoirs suddenly emptied below recommendations and for the benefit of those who manage hydroelectric resources.

In such a context, the Council of Ministers has launched a shock plan to reduce the electricity bill, with the aim of mitigating the price escalation in the wholesale market and especially protecting households and the most vulnerable groups. And a warning for navigators, regulatory changes in the energy sector are here to stay. We will increasingly see modifications in the charges and tolls, which make up the regulated costs you find on your electricity bill.

We summarize the main measures of the Government to reduce the electricity bill

1. Update of the electricity system charges: until December 31 there will be a reduction in the cost of system charges, both at supply points and for low-voltage electric vehicle charging points.
2. Reduction of the Electric Tax: the Special Tax on Electricity (IEE), one of the taxes you find on your bill apart from VAT, goes from the current 5.11% to 0.5%, the minimum allowed by European regulations.
3. Minimum vital supply: to protect the most vulnerable population and face the energy poverty, the Government extends the prohibition of cutting off electricity supply to vulnerable consumers covered by the Social Bonus, adding six additional months to the current four. During this time, the Reference Marketers cannot interrupt service in case of non-payment and must guarantee a limit power of 3.5 kW.
4. The suspension of the IVPEE is extended: the already existing interruption of the Tax on the Sale of Electric Energy Production, which taxes at 7% the electricity generation, extended until the end of the year.
5. 900 million in revenue from CO2 emissions: it will be used collected budget through the auctions of CO2 emission rights to address these measures that make up the shock plan.
6. Energy purchase auctions: the Government will call for auctions of power purchase contracts, requiring large business groups to offer electricity proportionally to their market share. This energy can be purchased by independent electricity companies and industrial consumers. This measure aims to lower the wholesale market price by negotiating less energy than currently.
7. Limits on the regulated gas tariff: the executive will apply a limit to the Last Resort Tariff of gas (TUR) that will prevent a 28% increase in its next review in October (this tariff is updated quarterly applying a mathematical formula). The difference will be gradually recovered in the next reviews starting in March, mitigating the impact on families and SMEs.
8. Regulation of stored water for hydroelectric use: in a context of climate change, the Government modifies the Water Law to consider the stored water as a priority social and environmental good. To avoid sudden releases like those of this summer, the river basin confederations will set a minimum and maximum regime of monthly flows to be released.
9. Reduction of the excess remuneration of some companies due to the high price of gas: in the current context, the gas thermal power plants set the price of the wholesale market and a good number of companies obtain extraordinary revenues derived from this situation. The Government has approved a mechanism that reduces this excess remuneration, allocating the collected money to reduce the electricity bill.