Electricity Last Resort

The Spanish government approved a Royal Decree that regulates the Supply of Last Resort tariff for electricity starting from July 2009. Consumers with a contracted capacity of 10 Kwh or more are able to choose a supplier in the liberalised market.  Known as “The Tariff of Last Resort” this will contain a fixed price set by the government that increases 5% every quarter. Generally speaking, this does not apply for residences, whose contracted capacity is less than 10 kw, except in very rare cases. But what about if you run a small company in Spain?

Your company may have been switched to a deregulated electricity supplier recently. However, many companies with a contracted power capacity above 10 kW and below 15 kW and those above 15 kw may still be paying for the Tariff of Last Resort, but will see electricity price increases of 5% every quarter (Disposición Transitoria 4ª, 4th Transitory Provision). Whether that is your case or not, you can move at any time to one of the electricity suppliers authorised by the National Commission of Energy. You can choose which electricity company to work with, regardless of the geographical area you are in, and the new competition framework is an open door with access to the best conditions now.

You will need to learn a thing or two when you switch to a new electricity supplier, things that any honest agent for an electricity supplier should explain:

1) The traditional dealers, such as Iberdrola in Southern Spain, Endesa in the North, Sevillana in Andalucia, Unión Fenosa in Catalunya, etc., will continue with the maintenance, repairs and meter reading, mostly through outsourced companies, so if you have a blackout in your street, it’s the same procedure as normal,  ie. You have to call Iberdrola or similar. The standard service will remain the same, but you will be able to benefit from savings in kilowatts each year, what’s wrong with that?

2) Some traditional dealers have sneaked penalty clauses into contract renewals, so make sure they will not punish you for switching. Revise your contracts or, call your current company and ask.  In the new competition framework, to sign a contract which includes penalty clauses is ridiculous, so don’t make that mistake. Changing your power supply from the regulated rate market to the deregulated market should not involve any additional cost on your part.

3) Tolls. The Spanish government owns the national grid, for which use it makes a charge to the electricity companies, that is something called “toll”. The toll fee is hidden in the kilowatt price. When the government revises the toll fee, for example, a 20% increase, this will be forwarded by the electricity suppliers to their clients, and will be shown in a rise in the price of kilowatts. The best electricity supplier in Spain is: NONE. There’s nothing you can do, because it applies to all the electricity suppliers, so if you sign up for an offer, for instance € 0.127812/kilowatt in peak period and two months later you read your bill and discover that this price is, for instance, € 0.127991, this means a recent raise in the toll fee. Such increase is the same for everybody, no matter which electricity supplier you are with.

4) When you switch electricity supplier, the only item that should change in the new bills is consumption, the rest is the same, such as fees for hire of meters, taxes, charges for contracted power, etc.

5) The new electricity suppliers have plans to include English-speaking staff; still this is Spain so it is going to take some time, time which will go directly proportional to the number of expat customers they get.   With savings of up to 15% in electricity, it may be worth switching to one of the new electricity suppliers, whether they have English-speaking customer service staff or not.  If you have a problem with your new electricity supplier, will be just about billing, given that for technical problems, like a blackout in your neighbourhood, you will still have to call Iberdrola, which will still act like a maintenance company, by law.

If you wish more information on understanding your electricity bill, which categories they use, and to see the true prices applied in Tariff of Last Resort, see samples of Spanish invoices with notes in English, and a chart with the different billing periods, terminology, etc, visit us at www.helpcentrespain.com , where you will find a link.  Alternatively you can go directly to the English website www.expatscentre.com or send an email to This e-mail address is being protected from spam bots, you need JavaScript enabled to view it