The price of electricity in Spain is the fourth highest in Europe, according to Eurostat (data relating to 2015).
If we want to reduce power bills we should bear in mind how the electricity companies calculate prices, depending on the characteristics of the meter installed in the dwelling, the type of contract and the tariff chosen by the user.
And considering that the percentage of the bill represented by the fixed power charge is that which has most increased in price in recent years, one of the measures that would result in paying less would be precisely to reduce the power charge to bring it in line with consumers’ real needs.
Finally, adopting responsible consumption habits would also lead to a lower energy bill.
Contracts with Reference Reseller Companies (those that meet the conditions to offer prices regulated by the Spanish government) may be of two types:
- Voluntary Price for Small Consumers (VPSC)
This is the most usual in domestic properties, with contracted power capacity of 10kW or less, and the maximum reference price that can be charged by resellers to consumers who opt for this type of contract.
- Applies the real price of electricity on the market.
- Contract period of one year, automatically extended.
- Freedom to switch to another type of contract and to return at any time to the VPSC.
Vulnerable consumers who have the VPSC contract can apply for the rate subsidy (see the section “Who can benefit from a 25% discount?”).
- 12 month fixed rate tariff
If the contracted capacity is 10kW or less and you prefer a stable, uniform kW/h price throughout the entire year you can choose this tariff. The price is usually higher than the VPSC. All Reference Reseller Companies are obliged to offer this tariff as an alternative to the VPSC.
- Contract period is for one year and a limited exit fee is applied if you terminate it before the year is up (up to 5% of the contract price of the energy estimated pending supply).
- Tariff renewed only if the customer so wishes.
NOTE: Do not confuse the annual fixed rate tariff with a flat rate. The two-monthly bill will vary depending on your energy consumption during the billing period. What remains unchanged is the price of the kW per hour. No other type of service such as maintenance, gas tariffs, insurance and so on can be associated with this contract.
The third option is to choose an Open Market Reseller, irrespective of the contracted power:
- Bilateral contracts
This type of contract is recommended for consumers who prefer to negotiate the conditions of their energy supply directly with the Open Market Reseller.
Consumers who have contracted capacity of over 10kW are obliged to take this type of contract, otherwise the VPSC will be applied with a 20% surcharge.
- Means widening the selection of resellers by looking beyond the products offered by the Reference Reseller Companies.
- Contracts can include special clauses or additional services (such as servicing, maintenance, etc.). You should study them carefully when making your assessment and comparing offers.
There exists the figure of the vulnerable consumer, who is entitled to a rate subsidy with a reduction of 25% with respect to the Voluntary Price for Small Consumers (VPSC). The discount is applied on both the power charge and the energy charge, but not on the price of meter rental. Vulnerable consumers are people who meet any of the following conditions:
- Have contracted capacity of less than 3kW.
- Aged over 60 and receiving the minimum retirement, permanent disability or widowhood pension.
- Have a large family.
All the members of the family unit are unemployed.
If the contracted capacity is less than 3kW the discount is automatically applied. In the case of other circumstances this tariff must be requested from the Reference Reseller Company via the telephone number indicated on the bill. The procedure to switch to a rate subsidy is free of charge. This option is only offered by Reference Reseller Companies and is not available from Open Market Resellers.
Consumers are free to choose the company that supplies their electricity, as well as the type of tariff corresponding to their contracted power capacity.
There are around a hundred electricity supply companies in Spain. You can use the National Markets and Competition Commission’s tariff comparison site to choose the one which suits you best (for both electricity and gas, as well as joint offers). You have to specify where the dwelling is, approximate consumption, contracted capacity and tariff, and whether you want any additional services. The price comparison tool will use these parameters to show you the best offers.