The electricity bill of a consumer covered by the regulated tariff or PVPC has increased by 18% in November compared to October, practically reaching 64 euros, making it the most expensive since February 2023.
This is explained because November has been, with 104.43 euros/MWhthe month with the highest wholesale price of electricity in 2024 by lower wind and nuclear productionwhich has forced greater use of gas combined cycles, a fuel whose price has also increased significantly.
Added to this is that in 2024 tax cuts have been declining or being reducedamong them those of VAT, which the Government applied to reduce the effect on consumers of the price increases caused by the war in Ukraine.
According to the simulator of the National Markets and Competition Commission (CNMC), the electricity bill of a typical consumer, with a contracted power of 4.4 kilowatt hours (Kw) and a monthly consumption of 60 kilowatt hours (KWh ) during peak hours, 70 KWh on the plain and 120 KWh in the valley, is in November 63.89 euros, 18.13% higher than October and 34% higher than in the same month of 2023. This typical consumer accumulates a bill of 564 euros in the first eleven months of 2024.
The bill for the entire year 2023 for that consumer, although in this case it does correspond to the 12 months of the year, amounted to 633.17 euroswhich represented a drastic reduction compared to the 1,096.53 euros it amounted to in 2022 and the 824.55 euros in 2021, years in which the price of electricity skyrocketed, especially after the Russian invasion of Ukraine in February 2022.
The electricity bill for this month of November It is the highest in all of 2024surpassing that of August, which was 57.19 euros; and the largest amount since February 2023, when it reached 64.48 euros.
The electricity bill includes, in addition to the price of electricity, the regulated costs (tolls and charges), the rental of measuring equipment, the margin for the marketing company for the services provided and taxes.
Precisely to limit the impact of the rise in electricity prices in the market on consumers, the Government reduced taxes that have then been progressively recovered, such as the special one on electricity or VAT.
Partial VAT recovery
The latter, whose type was reduced from 21% to 5%s maintained this reduction until the end of 2023, to move to 10% in 2024, although an exception was established: if in one month the average in the daily wholesale market did not exceed 45 euros/MWh, in the following month it would be applied a VAT of 21%.
Therefore, in the months of March, April, May and June, due to the very low prices in the daily wholesale market in the spring, in which in April a monthly historical minimum of 13.67 euros/MWha VAT of 21% was applied.
In those months, the invoices amounted to 44.85 euros in March, 42.1 euros in April, 47.13 euros in May and 52.51 euros in June, exceeding that of this last month than that of July, which was 52.17 euros.
If nothing changes, in 2025 the 21% VAT on the electricity bill will be fully recovered, compared to 10% in 2024 except in the months referred to above.
Reform of the PVPC or regulated rate
In addition, 2024 has been the first year in which the reform of the Voluntary Price for Small Consumers (PVPC), known as the regulated tariff, has been applied to reduce the weight that the daily wholesale price had in the consumption term of the invoice, which It was 100%.
As of January 1, the 75% of the PVPC It is determined by the daily price and 25% by the futures market, the latter percentage that will increase to 40% in 2025 and 55% in 2026.
The purpose of the PVPC reform, in addition to being a commitment of the Government with Brussels when the cap on the price of gas for electricity generation was authorized, was to reduce the exposure to market volatility for clients who have this rate, who have 8.6 million consumers.
Among them are the beneficiaries of the social bonus, who are required to have a rate to access that discount on the electricity bill for consumers classified as vulnerable.
This reduction in the exposure of consumers with PVPC to the daily market has the effect that in the months when, such as February, March, April and May of this year, prices were so low They did not benefit to the same extent than if the weight had been 100%.
However, in months when, like November of this year, the 100 euros/MWh, They are not as affected as if the weight were 100%.
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