Consumers demand that the Government, among other measures, reinforce the electricity social bond in the face of the current electricity price crisis. These discounts for vulnerable consumers are only enjoyed by “30% of potential beneficiaries”, criticizes the president of the Council of Consumers and Users (CCU), Carlos Ballugera, who demands less “bureaucracy” for their processing and believes that the “ideal” is to be granted automatically.
Ballugera meets this Tuesday with the third vice president and minister for the Ecological Transition, Teresa Ribera, together with representatives of consumer organizations. The main issue is to address the review of the regulated rate of the voluntary price for small consumers (PVPC) that the Ministry for the Ecological Transition has proposed, although the objective of the CCU is also to convey the need to address improvements in the social bonus.
In full struggle with the electricity companies due to the impact of the shock plan approved in September to try to contain the price increase, the Ministry has opened a public consultation to obtain opinions regarding the possible measures to be adopted to reduce the volatility of the PVPC, by that more than 10 million consumers are welcomed, with a view to the energy transition process. The process has started in the middle of a crisis that has brought electricity prices to unprecedented levels in Europe due to the rise in gas prices and CO2 emission rights.
This Tuesday, the daily price of the wholesale electricity market in Spain, to which the PVPC is directly referenced, will reach its second highest record in history (more than 203 euros). The futures of the Spanish pool for the first quarter of 2022 already point to a new record of 219 euros. The matter is already at the center of this week’s discussion among EU member countries.
Looking ahead to that meeting with Ribera, Ballugera hopes that the announced reform of the PVPC will make it possible to provide the semi-regulated tariff with more “stability” in the face of “turbulence” in the energy markets and believes that “if it helps to lower prices, it will be welcome” . The vice president has warned that this change could lead to a higher risk premium at the expense of the consumer. The major electricity companies have been asking for the reform for a long time. For the Government, it would reduce the political cost of the constant records of the so-called pool.
But organizations such as Facua and the OCU have distanced themselves from a proposal reminiscent of the old quarterly auctions with which the domestic tariff was set, which were abolished in 2013 because they favored speculation. The Spanish Confederation of Consumer and User Cooperatives (Hispacoop), also convened this Tuesday, claims that the PVPC reform be approached “with caution” and “in the medium term.”
The president of the Council of Consumers insists on the need to address the “improvement” of the social bonus by eliminating the “bureaucracy” that goes hand in hand with it and changing the award criteria. In March (last year available) 1.1 million consumers had received the bonus. Taking into account Ballugera’s estimate, at least 2.5 million households would be missing out on discounts. These amount to a minimum of 25% on the electricity bill. It is necessary to be a member of the PVPC to enjoy them.
One of the tools contemplated in the Strategy against Energy Poverty 2019-2024 was, in addition to the minimum energy supply approved in September, that the social bonus be granted automatically, as in France or Portugal. According to the president of the CCU, “it would be ideal for it to be automated”, but “the challenge lies with the Administration,” which would have to identify its beneficiaries. Currently you have to ask the marketers, which are the ones that cover the cost.
“We have told the Ministry that there is a gap that is not covered. There are 70% of potential beneficiaries who are not receiving it,” insists Ballugera, who demands “that the information to the beneficiaries be increased” because “the process is complicated “and” many beneficiaries do not ask for it. ” The president of the CCU also criticizes that “electricity companies generally remain completely turned away from consumers.”
Expanding the range of beneficiaries and the percentage of social bond discounts is one of the “short-term” measures that Hispacoop will claim from Ribera at the meeting this Tuesday. To lower the price of the bill, the confederation also claims, among other measures, to extend the already approved tax cuts (VAT and Electricity Tax) or charge costs not related to the supply to the State Budgets by removing them from the rate.
For its part, Facua demands that the Government impose a minimum discount of 50% on the electricity bill submitted to the PVPC for at least six months, to limit the effect of increases in energy prices on consumers. He asks that this discount be applied to the majority of families, excluding only those with the highest incomes, and is borne by the main energy companies operating in Spain in proportion to their market shares.
Facua points out that “the aggression of the electricity oligopoly on consumers and the pulse it is maintaining with the Government is serious enough for there to be a forceful intervention in prices by the Executive.” “It is about using a capacity for which the Member States are empowered by Directive 2019/944, of June 5, on common rules for the internal electricity market.”