As one of the requirements imposed by the European Union to authorize the so-called “Iberian exception”, which allows Spain and Portugal to limit the price of natural gas used in the production of electricity to alleviate the consequences of the escalation in energy prices in the electricity pool after the outbreak of the conflict in Ukraine, there will be changes in the electricity bill from next January 2023.
Specifically, from that date there will be a new way of measuring the price in PVPC rates, those that are subject to market regulation.
What will change in the electricity bill?
Broadly speaking, the bill will no longer be indexed at the price at which electricity is sold in the wholesale market each day so that these ceilings do not have so much weight in the price. What will be done from now on will be to index the price to a basket of medium and long-term prices: monthly, quarterly and an annual average to avoid strong fluctuations, without losing the short-term price references that encourage savings and efficient consumption.
The proposal indicates that, for the term price signal, the distribution between the above products is made in such a way that the monthly product represents 10% of the total, the quarterly product is 36%, and the annual product represents 54%.
With this formula, if electricity were to set a new record again, something that has been happening over the last few months, that value would affect the price and there would be a rise, but it would not necessarily mean paying more expensive electricity than never.
“Customers covered by this type of contractual modality have been the main victims of the upward spiral in wholesale electricity prices, since the final price of electricity transferred by the electricity marketers in these contracts is a true reflection of the evolution of the marginalist appeal prices in those markets”, declared the Ministry of Ecological Transition.
More changes in the future
When the Iberian Electricity Market (MIBEL) comes into operation, prices will stabilize and their oscillation will be reduced. The Government calculates that the oscillation will be reduced by a third, while demand will be encouraged to move to cheaper hours and with greater production of renewable energies. In other words, there will be very economical schedules and sections due to the use of clean energy.
With this new proposal to prepare the electricity bill, instead of the price set by the MIBEL being 100% of the reference, the Ministry of Ecological Transition intends that references to futures be gradually incorporated.
In 2023 they will represent 25%, in 2024 they will increase to 40% and in 2025 they will already account for 55% of the total, while the remaining 45% will continue to be provided by the daily price of electricity so that marketers can adjust the offer to the needs actual consumption.