March ends with a year-on-year increase of 26.5% in the price of the kilowatt hour of electricity

The increase has been even higher than in January, although the price per kilowatt hour has not reached as high an average as in that month.

March ends with a year-on-year increase of 26.5% in the price of the kilowatt hour of electricity

March ended with a year-on-year increase of 26.5% in the average price per kilowatt hour (kWh) of electricity, which stood at 14.13 cents (including indirect taxes), compared to 11.16 cents in the same month in 2020. This is evidenced by FACUA-Consumers in Action's analysis of the evolution of the PVPC semi-regulated tariff.

The association warns that the increase this month has been even greater than the one in January, when it reached 25.8%. However, the price per kWh this month has not reached the levels of the first month of 2021, when it averaged 16.75 cents and ranged from 7.30 cents on the cheapest day to 22.14 cents on the most expensive.

Among the reasons for the rises are the price increases in the electricity generation market from hydroelectric power plants and the fact that the market for CO2 emission allowances has soared.

The average user's bill rises by 18%

After 80.48 euros in January and 62.08 euros in February, the average customer's monthly bill in March was 70.90 euros. This represents an increase of 18.0% compared to the 60.06 euros in March last year. The difference has reached 10.84 euros.

FACUA warns that the rise in the PVPC should not lead users to switch to the free market, as companies there do not offer cheaper rates, but rather the opposite. Thus, the association advises to be wary of claims based on flat rates or price stability for a year.

The profile of the average customer used by FACUA is the result of the analysis of several tens of thousands of bills from households. It consumes 366 kWh per month and has a power capacity of 4.4 kW.

Demands to the Government

FACUA calls on the Government to speed up the fulfilment of the manifesto commitments adopted by PSOE and Unidas Podemos at the beginning of the legislature in terms of energy policy. Among them, the lowering of the very high price of the power term, the application of a lower price for the first kWh consumed and the elimination of the over-remuneration received in the wholesale market by certain technologies that were installed in a different regulatory framework, prior to liberalisation, and which have more than recovered their investment costs.

The association also calls for a substantial reduction in the indirect taxes applied to families' electricity bills, which exceed 27%, when the general VAT of 21% is added to the special tax on electricity. It also hopes for a reform of the social tariff so that many more consumers can access it and increase the discount it represents on the semi-regulated PVPC tariff.