Domestic consumers in the regulated electricity market will see a further increase in their electricity bills in October by about 3%. The Energy Services Regulatory Authority (ERSE) announced on Wednesday an increase in the electricity tariff in the regulated market by € 5 per MWh effective October 1, 2021.
For most domestic customers in a regulated market with a contractual capacity of 3.45 kVA, the renewal will be around € 1.05 on an average monthly bill, according to ERSE. ERSE estimates that for families with a contractual capacity of 6.9 kVA, the bill will increase by € 2.86.
This is the second increase in the electricity tariff determined by ERSE in 2021, following a similar update in July. There are now 933 thousand clients on the regulated market. The increase is justified by rising energy prices in the Iberian Electricity Market (MIBEL), which are breaking records every day. The average price per MWh in the Iberian market this Thursday will reach € 188.18.
“Based on consumers like the ERSE energy price simulator, the estimated impact of the renewal of the energy tariff for consumers in the regulated market is about 3% greater than the current prices in the total electricity bill (including VAT),” says the regulator.
This increase follows a 3% increase in July and a 0.6% decrease in January, so that “the average annual tariff change from 2021 to 2020 will be about 1.6%.”
The energy tariff “reflects the cost of purchasing energy from the last service provider (CUR) in the wholesale markets, being one of the components that unifies the final price paid by consumers in the regulated market,” explains ERSE.
The second increase for the year is aimed at “avoiding excessive mismatch with the free market and creating deviations that will subsequently be offset by tariffs with implications for all consumers.” The regulator can revise the electricity tariff on a quarterly basis whenever “based on ERSE estimates, the deviation from the cost of acquiring renewable energy equals or exceeds 10 € / MWh”. What happened again in the third quarter.
“For 2021, the forecast for the CUR acquisition cost taken into account when setting the energy tariff approved by ERSE on December 15 was 49.52 EUR / MWh. Following the renewal of the energy tariff in July 2021, the estimate for 2021 is € 52.02. / MWh “.
However, price increases in the Iberian market in recent months “as a result of the very high price of natural gas for natural gas combined cycle power plants and the high price of carbon dioxide (CO2) licenses” prompted a new revision.
“The updated estimate for 2021 points to a CUR acquisition cost of € 73.24 / MWh, which corresponds to a deviation of € 21.21 / MWh, which is 41% higher than the value reflected in the current tariffs.”
The new tariff will take effect on October 1 and will be valid until the end of the year. By October 15, ERSE will submit a tariff offer for 2022, which will include a tariff for network access, which will remain unchanged in this update.
Finally, ERSE “advises consumers to look for potential electricity bill savings from suppliers in the market.
