Edition 109
By HEIDI WARDMAN THE cost of electricity in Spain is set to drop by around 6.5 per cent from April 1 – the first price cut for 12 years.
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Friday, March 22, 2013
THE PRICE IS BRIGHT
Homeowners will be able to take advantage of a healthy reduction in tariffs after Industry minister José Manuel Soria confirmed that when taken per household, the figures will equate to an average saving of five euros per month, or €60 a year The ‘tarifa de último recurso’ (TUR), which is reviewed every three months and applies to some 20 million homes and small businesses, has risen continually since the liberalisation of the sector in July 2009. It was at this point that the TUR introduced a single rate set by the Government to protect domestic customers with a contracted capacity of less than 10 kilowatts (kW). There was a slight decrease of 2.2% during October last year, although a concurrent increase in VAT swallowed the saving from the point of the consumer. The TUR is determined by two components: the tariffs regulated by the Government and the cost of energy itself, which is determined according to the results of bargaining between electricity producers and supply companies. The Government has approved various measures and reforms during the past year, in a bid to balance income and expenditure for the electricity system, with the deficit gap in 2012 amounting to €5,500 million. Prior to the latest revision, the Industry Minister had announced that costs would remain stable, so
Electricity costs to be slashed 6.5%
José Manuel Soria the severe drop came as a surprise all round, with some smiling wider than others. However, Soria has remained true to his word, after announcing last week that the Government would not apply heavy tax levies to the revised pricing structure, regardless of the final outcome.
Following the announcement, he said: “Having access to a lower rate of electricity will benefit all families using TUR power, so is a positive thing for the majority of people living in Spain.” The decline in energy prices is mainly due to weak demand caused by the economic crisis, along with increased interest in renewable energy, which is hammering the price of traditional energy sources. The five companies contracted to supply power to homes in Spain, Endesa, Iberdrola, Gas Natural Fenosa, HC and E.ON, have acquired 4,447 megawatts (MW) for each hour of the second quarter during off-peak times, and 380 MW at peak times. The five-euro saving per household is based on average spending for a four-person family, within an 80 square-metres living space and making use of normal electrical goods, but not heating or air-conditioning. Normally, spending for this housing set-up would be an average €890 per year.
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