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Spain's Energy Providers Given Freedom to Impose Hikes

Source: FACUA - Mon 29th Sep 2014
Spain's Energy Providers Given Freedom to Impose Hikes

Spanish consumer action group, FACUA, has issued a report analysing the country's energy tariffs and has concluded that recent changes to legislation will not only not result in the dropping of the tariffs, but will give total freedom to the energy sector to apply enormous rises on prices which the government will be powerless to override under the proposed model.

With the average tariff as of August 2014, the average user pays 1.4% more than they did in August 2013.

This way, with the tariffs applied from 1 to 31 August, a monthly consumption of 366 kWh with a contracted electric load of 4.4 kW would cost EU75.87 (including the 27.19% VAT and taxes on electricity).

Users who use less than that have experienced a higher increase, due to the increase that the Government has approved for the fixed charges based on contracted electric load. This way, a user with 4.4 kW electric load who uses 250 kWh pays, according to August tariffs, 3.0% more than they did on the same month 2013.

The reductions experienced the last few months have now ended, and the futures market shows that users are condemned to pay more for their electrical consumption, since the Government refuses to approve a system where tariffs are set based on real costs of energy generation.

The average user EU67.62 on January (a 16.0% fall on January 2013), EU66.33 in February and March (17.6% less than the same period in 2013), EU63.98 in April (14.4% less than the previous year), EU71.46 in May (4.4% less), EU75.31 in June (0.7% more than June 2013), EU73.88 in July (2.4% less) and EU75.78 on August (a 1.4% more).

These amounts, related to the billing of the average user during Q1 of 2014, include the discount that the Government applied to the provisional tariffs when the real ones were established.

The average monthly price per kWh stood at 13.93 cents in January, 12.76 cents in February, 12.76 cents in March (following the revision when discounting 3.03 cents per kWh consumed during Q1), 12.12 in April, 14.17 in May, 15.22 in June, 14.83 in July and 15.37 in August.

In January 2014, the fixed charge per contracted kW was EU3.78, the same valid price since August 2013, when the Ministry of Industry, Energy and Tourism approved an increase of 62.8% compared to the EU2.32 set on April 2012. On February, the Government rose the tariff a 17.9% more, so it was established on EU4.46 per kWh. The accumulated increase of the kWh price in little more than a year has been 92.2%.

Last April, FACUA reported the Spanish Government to the European Commission over claims that that the new formula to establish electrical tariffs (the so called voluntary price for the small consumer that substitutes the last-chance tariff (fixed by the Spanish Government for consumers connected on low voltage and with a power supply of less than 10 kW) breaches the EU directives on electricity, consumers' rights and unfair terms. The association expects that Brussels Government will penalise Spain and stop the chaotic tariff model imposed by the Government.

FACUA warns that setting different tariffs depending on the kind of electricity meter whenever and the integration of these equipments in a remote meter reading system that is not even validated yet creates a clear discrimination among consumers, who are applied different conditions. In addition, there's a lack of transparency about prices, which are not notified to users before they are applied and are hardly understood by most of people.

On the other hand, FACUA states in its report that the way the electricity price is calculated, approved by the Government, breaches basic elements of the European data protection legislation, since the tariffs change substantially without giving the correct information about it to users beforehand.

Recommended Reading :

* Spain has one of highest cost of electricity in Europe : Study

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