The electricity price that regulates household bills, known as the Voluntary Price for Small Consumers (PVPC), is undergoing changes. This state took advantage of the energy crisis to reformulate the ratio. Historically the most competitive in price according to the annual report from the National Markets and Competition Commission CNMC, it has been pressured by higher costs from rising natural gas. The proposal, one of the conditions agreed by the Ministry of Ecological Transition and the European Commission to approve the Iberian exception, was published this week on November 7 and remains subject to possible revisions.
Does this change?
The PVPC is the electricity rate charged to customers who choose reference marketers. It depends solely on the wholesale market price of electricity, the pool, so any shift in that price directly affects consumers. The new proposal adds a future price reference to the monthly bill: 10 percent, 36 percent quarterly, and 54 percent annually. This daily price plus futures reference forms the core energy concept on the bill, but other elements such as power, taxes, and additional charges still determine the final amount due each month.
When does it come into effect?
The methodological change will begin with the next year and gradually take hold. In 2023 and 2024 the daily wholesale price will continue to carry the heaviest weight. The future price reference will account for 25 percent of the calculation next year, with the pool price making up the remaining 75 percent. In 2025 the futures basket is expected to represent 55 percent of the total while the daily price drops to 45 percent.
Who was affected?
There are about 9 million users, representing roughly 35 percent of the total. The PVPC discount is available to sensitive consumers through the electricity social bonus, and the change narrows eligibility to domestic consumers and micro businesses. The new rule will take full effect one year after the regulation enters into force, starting December 31, 2023. The accessibility will be documented through a responsible accreditation system that evaluates micro-enterprises opting into PVPC, with oversight by CNMC as described in the regulations.
What is the point?
The main objective is price stability. The current PVPC links too closely to wholesale prices, which spiked dramatically last year, causing invoices to swing month to month and triggering widespread debate. This is considered a weakness in the context of price movements tied to the day-ahead market, especially as gas-driven electricity prices push higher. The new approach introduces a futures market price to dampen volatility, which generally smooths bills. Government estimates show that annual volatility of the daily price drops from about 17 percent to a lower level when futures are included, and the monthly volatility also declines compared to the pool price. These figures are illustrative and drawn from a five-year trend 2018 through 2021, used to demonstrate stability in a typical market cycle, and cited for context in official documents.
Will the invoice price go down?
The reform does not promise lower prices in every year. It is designed to moderate extremes. In years with high price peaks, the new method softens the impact, while in years of lower prices the result may be higher. Historical comparisons show that in a year of high prices the pool averaged around 111.9 euros per megawatt hour, whereas the new method could reduce the expense by about 20 percent. In years with cheaper energy, the new approach could still raise costs by a modest amount, reflecting the balance between daily prices and futures references. These outcomes align with the policy goal of stabilizing monthly bills rather than guaranteeing cheaper bills across the board.