Median receipts paid by households under the regulated electricity tariff reached 58.3 euros in October, up 14 percent from the same month a year earlier. This figure marks the point where the number of households paying less than 58.3 euros equals those paying more. For households benefitting from the free market, the average electricity bill in October stood at around 80 euros, about 22 euros higher than the adjusted rate and roughly 20 percent more than in October 2021.
When looking at the average electricity bill for the first ten months of the year, the median for those under the regulated tariff was 68 euros, still lower than the 72.3 euros observed for households on the free market, though the difference is modest at about 4.3 euros.
Customer information
The data come from a Caixabank Research study service analysis of anonymized information from private customers. This source provides a valuable reference because the National Institute of Statistics INE does not yet fully reflect the evolution of electricity prices in its Consumer Price Index. The free market represents about two-thirds of all households.
The analysis, published as part of Caixabank Research’s monthly report, examines how Spanish households’ electricity bills are changing. In an early 2021 report, Caixabank Research found that price changes in the wholesale electricity market transmit more quickly to the regulated PVPC charges than to fixed-price free market contracts. By the end of 2021, while the regulated market saw its average income rise by about 32 percent year over year, the free market averaged a 14 percent decrease as price increases had not yet been passed through, even as government relief measures started to take effect.
At that time, officials urged INE to incorporate free market price changes into its calculations. This move would have likely lowered reported inflation, but it faced pushback when energy companies did not provide the necessary data to the statistics institute, according to Caixabank Research.
Trend change
Caixabank Research, using anonymized private client data, notes a shift in trends observed at the end of 2021. The renewal of free market contracts led to price increases through the year in wholesale markets. As a result, the January 2022 fixed-price household income averaged around 60 euros, rising to about 80 euros by October. On a January through October basis, the average stood at roughly 72.3 euros.
Meanwhile, households on the adjusted rate saw their bills rise from about 78 euros in January to 58.3 euros in October. The ten month average sits near 68 euros, about 20 euros higher than the previous year but about 4.3 euros below the free market data.
2023 expectations
Overall, Caixabank Research anticipates that the annual energy bill for Spanish households will continue to rise, covering electricity, gas, and other fuels, with a total around 800 euros compared with roughly 500 euros in France in 2022, about 1,000 euros in Germany, and an estimated 1,400 euros for Italy.
Analysts at Caixabank Research expect electricity bills for the coming year to stay high for Spanish households, though much uncertainty remains about the gas market and its regulation. They note that a respite on the electricity bill is possible, but not guaranteed before the end of 2023.
On balance, the volume of household bills in the regulated market is forecast to exceed 2022 levels, given that MIBGAS futures prices for 2023 are slightly higher than those for 2022 by about 8.2 percent on average. The report suggests the gasoline ceiling could partially offset these increases in the first half of 2023. In any case, regulated market bond volatility is expected to ease after the planned PVPC rate reform. For households with contracts revised in the free market, rate increases are anticipated to continue the 2022 trend, though the rises are expected to moderate from the second quarter of 2023.