Electricity bill will remain 30% more expensive with the gas cap

The bill of an average household, with a regulated PVPC tariff, 3.45 kilowatts contracted and an average consumption of 185 kWh per month, will continue to be at least 30% more expensive than a year ago, despite the reduction that the entry into force of the so-called cap on natural gas for electricity generation will entail. And that is if all the reduction in gas prices for electricity generation is transferred to the bill. The comparison of the first five months of this year with respect to the same period last year indicates that the average household has paid 112 euros more this year, 50% more expensive. The entry into force of the gas cap, which will be delayed until at least the month of June and which affects this measure, which will initially affect about 37% of domestic consumers - just over 10 million - and 37% of industrial consumers, will involve a real reduction in the PVPC bill of 15.3%, which would reduce the average bill of these households by just over 10 euros, to around 62 euros per month, still well above the average for the same months in 2021, when they paid just 48 euros on average per month.Thus, the reduction will not be as substantial as expected and will certainly not result in domestic consumers paying bills similar to those of a year ago, including the tax reductions introduced. The Minister for Ecological Transition, Teresa Ribera, had announced that the gas cap would allow a 40% reduction in the wholesale market for gas used by combined cycle power plants to generate electricity, to 130 euros per megawatt hour, much lower than the average of 210 euros per MWh recorded during the first quarter of the year.The royal decree limiting the price of gas used for electricity generation determines a maximum average price of 48.75 euros per megawatt hour in the twelve months that this exception will last, but the Impact Report accompanying the decree law reflects that the reduction in the first six months will be 40 euros per MWh, to be progressively increased by five euros per month during the following six months to 70 euros per MWh, and not to 50 euros per MWh as had been announced.The reason is none other than the compensation that consumers have to pay, between 5,000 and 6,000 million euros, according to industry sources, for the difference between the cap that is set and the actual price of the raw material. So to this ceiling of 48.75 euros per MWh, which provides for a market price of 126 euros per MWh, must be added the 45 euros per MWh of system compensation.The sum of the total matching price, plus the extra adjustment made to compensate for the rebate, comes to a total of 171.70 euros/MWh, which when the bonus to consumers for congestion rents - the difference between the electricity resulting from the cap in the Iberian Peninsula and that of France - which the Government estimates at 5.71 euros/MWh on average, is cut, would end up resulting in 166 euros/MWh. This would leave the real reduction in the bill for an average consumer, with the tax rebate in force and the current values of tolls and charges of the electricity system, at the aforementioned 15.3% in the last six months, because in principle the first six months the Ministry calculates a rebate of almost one point less, 12.5%. As detailed in the report, as the months go by, more term contracts will expire, so the compensation for the adjustment will be distributed among more agents and the price will go down.The compensation starts, in addition, for households under the semi-regulated tariff of the voluntary price for small consumers (PVPC), which account for more than 30% of low voltage supplies and about 10% of electricity demand; to large industrial groups that directly buy their energy in the wholesale market.