Ecological Transition will reduce billing costs by more than 9%, pending the decision to do with taxes
Despite the calm these days of rain and wind bring to electricity prices, the next year ahead will bring energy costs that will remain high and full of shocks. That is the market forecast and for which the government has proposed a reduction of 9.2% on the fixed part of the voucher that relates to costs. In other words, one of the amounts that are paid on the basis of the contracted capacity (consumption or not) and the electricity consumption during a month.
This tax cut is applied to the latest tax cut approved by the government in the middle of this year, which already represented a 56% drop in that amount compared to what consumers paid in 2021. to cut costs as one of the tools to contain the increase in electricity production, with a reduction of more than 90% after the summer of last year, when prices started to skyrocket.
Each year around these dates, the Ministry of Ecological Transition publishes a ministerial decision, which is subject to public consultation until this Friday 16th pending possible allegations, and which will then be sent directly to the BOE for application from January 1, 2019. This reduction of more than 9% will benefit domestic customers covered by the 2.0TD tariff corresponding to contracts with a contracted power of up to 15 kW (included) and low voltage. At other higher powers, for example linked to industry, the rate decreases from 5.3% to over 17%.
The cost represents the portion of the electricity bill that is used to pay, among other things, the premiums of the historic renewables – those that were launched until 2008, with the burst of the economic bubble – or the write-off of the debt of the electrical system. The other fixed part is the tolls – with which the networks are paid – set by the National Commission for Markets and Competition (CNMC), whose decision for next year will also be announced by the agency shortly. The toll will be reduced by 4.6% this year.
In making this decision, government sources admit that they predict a context in which energy prices will remain very volatile in the coming year, with many ups and downs, depending heavily on what happens in the war in Ukraine and Russia’s decisions regarding the gas. In fact, light futures (a kind of stock market on which energy prices are quoted) expect electricity costs to exceed 200 euros/Mwh by 2023, historically far from the usual 45 euros/Mwh for the Iberian system.
In the proposed decision, the Ministry of Ecological Transition and Demographic Challenge has taken into account a revenue forecast for this item for the year 2023. However, it is foreseeable that the current suspension, which expires on December 31, will be extended. The cabinet led by Teresa Ribera stressed that, in case this tax suspension “decided to be extended beyond December 31, 2022, an equivalent compensation should be provided to the electricity system for the loss of income that such suspension would cause, as already reflected in the successive suspensions of the said tax in the past”.
And therein lies the other key of how the electricity bill will start in 2023. Because within the government’s measures to curb the upward spiral of the electricity price, in addition to tackling tariffs, it has been agreed to introduce an 80% tax on electricity receipts, including the reduction of VAT to 5% and the Special Tax on Electricity up to 0.5%. Likewise, the tax levying 7% on the value of electricity production is suspended.
Source: La Verdad
I’m Ben Stock, a journalist and author at Today Times Live. I specialize in economic news and have been working in the news industry for over five years. My experience spans from local journalism to international business reporting. In my career I’ve had the opportunity to interview some of the world’s leading economists and financial experts, giving me an insight into global trends that is unique among journalists.
