The regulated rate of electricity, known as the Voluntary Price for Small Consumers (PVPC), is in the process of changing. this State took advantage energy crisis to reformulate this ratio. It is historically the most competitive in terms of price, according to the annual release of the National Markets and Competition Commission (CNMC). However, this has been hurt by higher prices from the surge in natural gas. The proposal, one of the conditions agreed by the Ministry of Ecological Transition and the European Commission to authorize the ‘Iberian exception’, was made public this week by 7 November, so it is still subject to change.
Does this change?
The Voluntary Price for Small Consumers (PVPC) is the price of electricity charged to customers covered by reference marketers. it just depends electricity price in the wholesale market (known as the ‘pool’), so any change in this price directly affects consumers. An additional addition is proposed in the new proposal. future price reference monthly reference (10%), quarterly reference (36%) and annual reference (54%).
This new formula (daily price + futures reference) establishes the energy concept of the bill, which is the only thing that changes. But we must add to this the power, taxes and other fees contracted to arrive at the final price consumers pay on the monthly bill.
When does it come into effect?
The change in methodology will be effective from the next 2023 but will happen increasingly. Thus, in 2023 and 2024, the daily wholesale price will still have the highest weight. Specifically, the future price reference will only make up 25% of the calculation next year (the remaining 75% will correspond to the pool price) and 40% the following year. In 2025, this futures price basket will represent 55% of the total compared to the daily price, which would then represent 45%.
Who was affected?
actually exists 9 million users, 35% of the totalThis rate is mandatory to take advantage of this discount, including sensitive consumers who benefit from the electricity social bonus within the scope of the PVPC rate. Until now, the requirement to have this rating was to contract 10 kilowatts or less, which in practice means targeting domestic consumers and companies, but without any restrictions on their size. However, at the new rate only “domestic consumers and micro businesses” will have access. This condition will be valid one year after the new regulation enters into force, that is, from 31 December 2023.
This change will be governed by a responsible statement-based accreditation system to document the evaluation of micro-enterprises for companies that decide to take advantage of this price. This accreditation and access to the PVPC will be overseen by the National Markets and Competition Commission (CNMC), according to the text.
What is the point?
The only and ultimate goal, ensure price stability. The problem with the current PVPC rate is that its direct correlation with wholesale prices, which rose 500% last year, means that daily pool price changes are automatically reflected in invoices, and this has been in the past year. It caused huge price differences in the electricity bill from one month to the next and created a lot of controversy. At the same time, this is a “high exposure” to the day-ahead market According to this published text, it is something that “appears to be a weakness in the context of the upward move” in prices, caused by the contagion effect of natural gas on electricity prices, undermining incentives by large buyers to buy energy on futures. Wednesday.
Therefore, price fluctuations are avoided by adding a futures market price, which tends to be more stable. So prices are less volatile. According to the government’s calculations, the annual volatility of the daily price (how much the average daily price changes throughout the year) is 17% compared to the pool’s 27% volatility; annual volatility of the monthly average price (how much the monthly average price changes over the year) reduced to 16%, compared to 23% of the pool price. These percentages are indicative because they are based on the average of the last five years (2018-2021), but show a stable trend.
Will the invoice price go down?
The new formula does not necessarily mean a lower price, and that is not its purpose. And this is reflected in the economic report of the royal decree, which explains that in a market like 2021, the price of the ‘pool’ ends up at an average of 111.9 euros per megawatt hour (expensive price). new methodology, final result would be 20% cheaper. In 2019 (a cheap price year closing at an average of 47.7 euros per megawatt hour), however, 11.4% more expensive with new methodology. So in years when price peaks are high this formula will soften them, but in years when prices are low it is very likely to be more expensive.
Source: Informacion
Christina Moncayo is a contributing writer for “Social Bites”. Her focus is on the gaming industry and she provides in-depth coverage of the latest news and trends in the world of gaming.