40% Energy Discount and New TUR Policy for Households: A Summary of the Royal Decree Law

The government has introduced a new social bond category with a 40% discount for low-income working households on electricity bills, along with a new regulated gas rate for neighboring communities served by a central gas boiler, and it is also tightening efficiency requirements for public lighting.

On Tuesday, the Cabinet approved a royal decree law that includes measures designed to soften the impact of high energy prices on consumers.

Teresa Ribera, Minister for Ecological Transition, stated after the Executive Board’s weekly meeting that this marks the tenth royal decree the Government has issued since June 2021 to shield families and the productive fabric. It includes fixed-cost invoice discounts, expanded protections for the most vulnerable, and a cap on gas within the Iberian mechanism for electricity users.

Potential beneficiaries of the new last resort rate (TUR) for neighborhood communities, which will cut gas costs by 50%, are estimated at 1.7 million households.

TUR 4 is temporary, running through the end of 2023. It will base charges on the society’s average consumption over the past five years, with a 25% surcharge applied to consumption above historical levels. The rate will be divided into eight consumption subtractions, ensuring a clearer structure for households and businesses alike.

Neighborhood communities must install individual meters before October 2023 unless cost-sharing partners are willing to absorb an additional 25% in the variable consumption period should the TUR be accepted, unless exemptions apply due to technical feasibility.

The government also extended the 15% cap on increases tied to raw material prices through the end of 2023 for TUR 1, 2, and 3 revisions.

In the General Government Budgets (PGE), the TUR program will receive 3,000 million euros to implement the measure and to cover 2023 debt by limiting raw material price impacts for the remainder of the TUR period.

The previous debt incurred by last-resort gas marketers (Naturgy, Endesa, Iberdrola, and TotalEnergies) is to be repaid when possible, and raw material costs will not rise by more than 15%.

40% discount

A new social-holding category will disburse a 1.5 million working households its share of the electricity social bonus, representing a 40% discount, alongside other beneficiary groups within the broader program.

Energy Justice bonus A new temporary bonus called the “Energy Justice” measure will stay in place until the end of 2023 and will be accessible to households with income between 1.5 and twice the Multi-Impact Income Indicator (IMPREM), featuring 14 payments.

For 2023, an adult earning less than €16,800 annually or a family of four with a yearly income under €27,720 falls within the eligibility range (illustrative thresholds).

The Government also widened the scope of existing social bonuses, increasing the discount for vulnerable consumers from 60% to 65% and for severely vulnerable consumers from 70% to 80%.

Additionally, and with summer heat and air conditioning in mind, many households have reached the annual deductible limit on social bonds. The limits are therefore extended by 15% to ease the strain.

The minimum thermal social bonus rises from €25 to €40 per year, and the average benefit doubles to €375 per year.

The reduction in profits from marginal power plants in the electricity market, driven by higher gas prices, is extended through December 2023.

The discount applies to 90% of benefits for electricity sold above €67 per megawatt-hour (MWh). The overall revenue from this measure, approved in September 2021, remains to be fully determined.

Obligations for Companies

The royal decree will require companies that choose to inform customers on the invoice about compensation or corrections paid to gas power plants for the Iberian mechanism to be accurate and clear. A verbatim paragraph will be collected by the BOE and mandated for inclusion to demonstrate the benefits of the measure, which the Ministry reports has already delivered around €3,000 million to consumers.

Ribera reminded that transmitting the throttle is not mandatory; companies may decide to apply it wholly or partially. Yet the Manager encourages reporting without “creative embellishments” in applying any rate or fee, preferring straightforward disclosures.

New electricity bills will reach homes from December, reflecting the average consumption in the customer’s ZIP code. The government will also allocate €40 million to replace analog gas meters with digital ones at no cost to customers, while simultaneously raising efficiency standards for public lighting.

— This summary reflects official communications and program details as publicly reported during the policy rollout. For readers seeking deeper context, these measures are part of ongoing energy affordability efforts in response to market conditions and are organized around social protection, fairness in pricing, and gradual modernization of energy infrastructure. [Source: Government briefing and royal decree law summaries]