An extra charge on many electricity bills in Spain is adding to the cost of living crisis

It is the compensation that has to be paid to companies that use gas to generate electricity. The amount can vary, and so far has ranged from 12 to 20 cents per kilowatt hour of electricity used

José María Camarero

Madrid

Monday, 3 October 2022, 10:41

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As if electricity bills were not already difficult enough to understand, an extra charge has now been added in many cases and it has a different name depending on the company. It is the compensation that has to be paid to companies that use gas to generate electricity following the cap on the gas price which the European Commission agreed to in Spain earlier this year. The cost of paying them difference between the price cap and the real price has to be spread among all consumers.

Bills are still cheaper, Ministry says

The Ministry of Ecological Transition says that despite this additional charge, electricity prices in Spain are still cheaper than they would otherwise have been. It estimates an average of 17 euros a month is being saved on bills.

The extra charge will be payable each month until the end of May 2023. The first bills to include it were those of the 10 million households who are on the regulated tariff. It was added from 15 June this year and was calculated then at 12 céntimos per kilowatt hour, but rose to 20 cents per kilowatt in September when the real gas price shot up.

All households

Now, more and more consumers whose electricity is supplied on the free market tariff are finding that their company is incorporating the new charge to their bill. Because electricity contracts normally last for one year, people who decide to move to another company which offers better conditions instead of renewing have found that they have had to start paying this compensation.

The aim is for all households in Spain to be contributing towards this cost by the end of May, and the Ministry points out that this will make it cheaper. However, it also depends on the gas price on the international markets and the cost of electricity is expected to remain high until some time next year.

Experts advise anyone choosing a new electricity supplier to take a note of the price they offer (the charge per kilowatt hour) and remember that the additional charge will go on top. The amount can also vary, and so far has ranged from 12 to 20 cents per kilowatt hour of electricity used.

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