It does not solve the energy poverty problem

FACUA finds unfair and insufficient the new electricity social tariff, that does not consider a minimum supply

The association has analysed the Law draft prepared by the Ministry of Energy and argues that it should include a prohibition of disconnection for those families who cannot face the bills, and other measures as not making it depend on the market.

FACUA finds unfair and insufficient the new electricity social tariff, that does not consider a minimum supply

FACUA-Consumers in Action finds unfair and insufficient the new electricity social tariff introduced by the Government in the draft of Royal Decree that regulates the vulnerable consumers in the energy sector, the social tariff and the conditions to disconnect those consumers who have a contracted electric load of 10 Kw. It does not guarantees a minimum supply, it does not prohibit the disconnection for vulnerable consumers who cannot face the electricity bills and again makes such an essential tool to tackle energy poverty depend on the market and its fluctuations.

The association has analysed the Law draft and sent its conclusions to the Ministry of Energy, Tourism and Digital Agenda within the term of public participation opened. FACUA reminds that, if the Government keeps the current price of electricity and this depends on the fluctuations of the market, with an opaque and suspicious setting system, consumers will keep their vulnerability and the alarming figures of energy poverty will not decrease in Spain.

The association believes that an acceptable price of kw should be set, along with a reduction of the taxes of the electricity bill (it is hard to believe that the general VAT of 21% is still applied) and a prohibition of disconnection due to lack of payment, at least those months of extreme temperatures in which the access to electricity is essential for health.

Social tariff in the hands of the market

The social tariff presented by the Government in its draft keeps the link with a discount of the semi-regulated price, the Voluntary Price for the Small Consumer (PVPC according to its initials in Spanish). FACUA is against this system, and says that it should not be linked to any tariff, since these depend on the fluctuation of the market, so vulnerable families who access the social tariff might see themselves in the situation of not being able of facing the bills again.

Originally, the social tariff consisted in freezing the so called Last Chance Tariff (0.114730 and 1.675202 Euro per kW of contracted electric load). At the beginning of 2014, the Government decided to change the system and apply a 25% deduction on the Small Consumer Voluntary Price (PVPC, according to its initials in Spanish, which replaced the Last Chance Tariff). Since then, the system has been the same, one that the association finds unfair and disproportionate, since if it depends on the prices imposed by the market it will be difficult to access for families who are in financial trouble.

On the other hand, this discount will not be applied on the total of the consumption of electricity, there will be limits depending on the type of families accessing it, so, depending on the case, families in need can be left out.

In addition, the criteria for accessing this rickety discount are still way too restrictive. The access to the social tariff is determined by an income guideline based on the Iprem (Public Indicator of Multiple Effects Income), which implies too many difficulties. In one hand, it has not been updated for years, and on the other hand, the sums are way too low. In fact, according to the data offered by the Social Security on its website, the monthly Iprem is 532.51 Euros, while the minimum wage is 707.70 Euros per month.

On the other hand, only gross income and not the available income is considered to qualify for the definition of vulnerable consumer and therefore to access the social tariff, so essential expenses such as the mortgage, etc that can limit consumers possibilities of facing the electricity bill are not taken into consideration.

FACUA also believes that being registered as a large family should not be used as a reason to access the social tariff, since it does not separate the families depending on their income or the financial circumstances that they live in.

In addition, the association rejects the criteria used to be considered a severe vulnerable consumer, since, in addition of reducing even more the income threshold, forces the consumer to be assisted by the social services and to be helped by the Administration to pay 50% of the electricity bill. Linking the condition of severe vulnerable consumer to requirements which are external to consumers is not admissible, FACUA says.

This is also in contradiction with another article of the law draft (article 13), that states, literally, that "Public Administrations will not be considered forced to fund the social tariff and the cost of co-financing the electricity supply of those consumers at risk of social exclusion".

No consequences for suppliers

FACUA insists that linking the social tariff to the PVPC and to a specific contracted electric load (less than 10 kw) can leave many consumers who have been tricked by the suppliers to change their tariff out.

The association reminds that the reality of Spanish electricity market is an absolute lack of information of consumers about their rights, about the existing types of tariffs and even the companies they have to deal with: trading company, the reference trading company and distributors.

It is a fact that even the National Commission of Market Competition (CNMC, according to its initials in Spanish) has started fining companies for changer consumers' suppliers or tariffs without their consent. There's an increasing number of denounces in Spain.

These irregularities can make consumers, without their knowledge, to stop having access to social tariff. The new law only mentions that consumers have to be informed when their tariff is going to be changed. FACUA finds outrageous that the Government thinks a simple warning is enough, despite the ignorance of the system and the constant irregularities produced in it.

The association also rejects that this new law does not include consequences for those companies that commit these irregularities, or even for those situations where, despite consumers meet the criteria to access the social tariff, they are not given it directly.