It will take into account a package of monthly, weekly and annual prices to avoid the current swings of the PVPC, which has scared 10 million households in the past year.
The Department of Ecological Transition has put on the table the first draft to amend the regulated electricity tariff, a contract that has overwhelmed millions of households over the past year due to the volatility of electricity prices it contains. The department headed by the third vice president, Teresa Ribera, has submitted for public consultation the PVPC (Small Consumer Voluntary Price) reform document with which it will try to stabilize this reception by taking new references beyond the prices of the wholesale market that exposes the market daily and hourly.
In general, the idea of the Executive is to take as a reference a series of temporary prices that can be monthly, quarterly and even annual averages, rather than the current hourly references that spread the electricity costs over a day until they are about to double it. or even triple, depending on the hours in which each house makes a more intensive light consumption. In order to avoid these large fluctuations, the annual prices will be taken as the main reference and thus an attempt will be made to achieve a variation that does not exceed the margin between 15% and 20%.
This reform of the regulated tariff was one of the major commitments made by Spain to the European Commission after the approval of the Iberian mechanism limiting the price of gas on the Iberian market. Because Spain is still the only country to maintain a regulated rate as volatile as the current one.
In France, for example, it is fixed for a year and its price is actually calculated as an average between the cost of historic nuclear energy and the futures market price. In Portugal, also a year, it is calculated as an average of the forward market price (for what the CUR acquires over time) and a price forecast made by the country’s regulatory body. In Britain, the regulated rate is calculated every six months and in Italy every quarter to give stability to the receipts received, although it is planned to abolish it in 2023. In Germany, for example, this option no longer exists.
The Ministry of Ecological Transition already launched a preliminary consultation in October last year to change this modality of the PVPC, which can accept deliveries with less than 10 kilowatts of contracted power. It involved collecting “proposals to reduce the volatility of the PVPC and optimize its design for the energy transition process.” It was one of the energy companies’ requests and one of the measures included in the government’s shock plan. But its processing was not immediate. And finally, under pressure from consumer and user organizations, it was discarded.
However, the escalation in electricity prices that Spain has suffered since last summer, exacerbated by the war in Ukraine, has led to a radical change in the tariffs that citizens had taken on, by moving massively from the regulated to the free market as never before. . basically looking for more stable rates. Notably, 1,250,101 households opted for some of the dozens of stable rates offered by marketers in 2021 and decided to exit the PVPC, after recording continuous historical cost records.
This high number of consumers switching from the regulated to the free market means more than a doubling of the transfer request between both types of tariffs in 2020, when it barely crossed half a million portability. In addition, the figure recorded last year by the National Commission for Markets and Competition (CNMC) shows a record number of tariff transfers, compared to 663,000 in 2019 or 737,000 in 2018.
There were also those who moved from the free market to the regulated market, although they may have done so in the first half of last year, when pool prices were still relatively low, before starting to rise in June. About 428,000 households opted for the regulated rate from one of the free ones.
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.
