The Ministry for the Ecological Transition and the Demographic Challenge (Miteco) has launched a prior public consultation on to the modification of the Voluntary Price for the Small Consumer (PVPC), the regulated tariff that electricity consumers with a supply point with a voltage lower than 1 kilowatt and a contracted power less than or equal to 10 kilowatts can benefit. The consultation aims to gather proposals to reduce the volatility of the PVPC and optimize its design with a view to the energy transition process, according to the ministry in a statement.
Royal Decree-Law 17/2021 on shock measures approved by the Government already establishes that the PVPC will be revised in order to incorporate the price reference of the new auctions of long-term power purchase contracts, with a maximum weight 10%. However, the ministry has considered that “beyond this provision, it is appropriate to consider the possibility of modifying the structure and calculation methodology of the PVPC to reduce the volatility of such a basic good in domestic economies – especially vulnerable ones – such as electricity ”and has decided that it is better to do so by prior consultation between all the protagonists: consumers (individuals and companies), producing and marketing companies.
In his opinion, if it is considered necessary to reformulate the regulated tariff, the department invites to answer questions regarding its structure, the convenience of including price references for forward products, the most appropriate periodicity for updating it, the need to establish a regime temporary for the new configuration or the opportunity to maintain a dynamic PVPC for those consumers who so wish. Any other contributions that are deemed appropriate in relation to the matter consulted may be included in the responses. They must be sent before October 22 to the email firstname.lastname@example.org, indicating in the reference subject “PVPC modification consultation”.
The PVPC, introduced by the 2013 Electricity Sector Law and regulated in Royal Decree 216/2014 by the Government of Mariano Rajoy, is a price indexed to the wholesale electricity market that includes, in an additive way, the cost of production of electricity, access tolls, and marketing charges and costs. This price can only be offered by the reference marketers (COR) designated by the Government and it is the electricity contracting modality chosen by 10.7 million consumers, around 40% of all domestic consumers. In addition, it allows vulnerable consumers to benefit from the social bonus, with discounts of 25% and 40%, and have access to other additional protections, such as the recent vital minimum supply.
Due to its configuration, the PVPC is one of the most competitive options for the supply of electricity, as revealed in the supervision reports of the retail market of the National Commission of Markets and Competition (CNMC), guaranteeing profitability at all times. COR, says the ministry.
However, the evolution of energy prices in recent months has led to a reflection on its configuration, since it fully and rapidly transfers the oscillations of the wholesale market to households and SMEs, although this greater volatility does not translate into higher prices to long term. The Ribera ministry recognizes that this greater volatility “may be accentuated as the energy transition progresses and periods with low prices follow, due to a greater weight of renewable generation, with episodes of high prices, due to the presence of plants with higher variable costs, such as natural gas combined cycles ”, as is happening in recent months.