Almost all taxes come from the electricity bill, as well as part of the fixed costs, without avoiding new disproportionate increases
A year ago, the government launched what would be the first major decree to cushion the effects of the electricity surge in Spain. At that time, there was no war on the horizon—although Russia’s threats of gas cuts were—but the surge in electricity was beginning to make revenues reaching consumers unsustainable. That package included fiscal and regulatory measures that followed the same path: reducing some of the concepts taxed on the receipt to make it more affordable.
A year later, the electricity bill has completely changed. It barely had any inscriptions until last June, when the Iberian exception was launched. It stayed on the chassis. If you compare a receipt from this summer with one from the previous, you can see how the weights of each of the realities included in a receipt have changed.
The cost of the home’s electricity consumption in each billed period (Euros per kWh consumed) used to be a quarter of everything paid to the electricity company each month. Now it represents more than 75% of the bill we pay to energy companies. The problem is that this concept has risen the most in the past year. To give an example, in the case of the regulated tariff, consumers covered by this modality paid an average of 0.21 euros/kwh in September last year, a cost that is already high compared to the average of recent years. . Now that price is above 0.36 euros / kWh. That is 70% more expensive than a year ago.
Taxes represent the most reduced portion of the past year on electricity bills. The government decided in June last year that the VAT (Value Added Tax) applied to these receipts would fall from 21% to 10%. It was an unprecedented decision, after several months in which the Ministry of Finance insisted that the European Commission prevented this tax from being unilaterally reduced in Spain. Along with this reduction is the suspension of the generation tax (which is paid by electricity companies). Although new tax actions came later with the reduction of the electricity tax from 5.11% to 0.5% and the last: VAT from 10% to 5%. In total, taxes now represent an average of 5.7% of total receipts.
The fixed part of the bill, that money we pay even if we don’t use a single kilowatt (kw) of electricity, has also fallen off in the past 12 months. The management’s first package of measures reduced expenses by 90%. It concerns the compensation aimed at paying for the old renewable energy sources, the electricity shortage of the insularity. Those same fees have now been reduced by 33%, compared to 90% that were suspended at the time, which was a breath of fresh air for the bill as a whole. Tolls (fees for the transmission and distribution of electricity) have been reduced by just over 4% since January. The decline was even greater in the last quarter of last year. In an average regulated rate home, with a contracted power of 3.5 kW in the two sections and 3,600 kW, the savings could be around 40.64 euros this year.
Despite all these measures, the average electricity bill has continued to rise in recent months due to the surge in electricity generation, the cost of which has practically eaten up the cuts in taxes, fees and tolls applied since June 2021.
In addition, to further curl the loop, the Iberian cap (limiting the price of gas used to generate electricity) has been in place since June 15. This measure must be compensated in order to pay the gas companies the real price of gas compared to the limited price. It presupposes an additional surcharge on the receipt, which adjusts the reduction in the kWh price resulting from the limitation of the price of gas. This new concept incorporated in the receipts will be in effect at least until May 2023, when the Iberian exception expires.
Source: La Verdad
I’m Wayne Wickman, a professional journalist and author for Today Times Live. My specialty is covering global news and current events, offering readers a unique perspective on the world’s most pressing issues. I’m passionate about storytelling and helping people stay informed on the goings-on of our planet.
