Saturday, November 28, 2009

Trying to make more sense of this

My neighbour tells me that he has now phoned the Iberdrola helpline (9012020) to enquire about the information he was given by his friends on the coast. The person he spoke to has promises to send him information by post. We will have to wait and see what arrives but in the meantime I have done a bit more searching about and found this:-

Iberdrola explain all this in their leaflet which you can read online in English.

From July, low-voltage electricity consumers whose contracted power did not exceed 10kw saw the all-inclusive electricity rates they were accustomed to paying replaced with the Last Resort Rates (LRR)*, set by the government. The Last Resort Supply (LRS)** is the model for the electricity sector, imposed by the Ministry of Industry, Tourism and Trade in accordance with EU regulations, in force in Spain under the Royal Decree 485/2009, dated 3rd April 2009.

Whilst consumers were not obliged to make any changes themselves and would not be affected by the new arrangements, they did have the option to choose their retailer from the list offered on the reverse of the letter.
The system essentially rewards low-voltage electricity consumers, with contracted power up to 10kw, who are entitled to cheaper rates, whilst penalizing those who use excessive volumes above this level.

The majority of home owners and some small businesses fall into the LRR category, and provided that they did not contract for an alternative retailer from the ‘deregulated’ or independent market, they were automatically supplied and charged by another division of the IBERDROLA Group , ‘Iberdrola Comercialización de Último Recurso’.

Iberdrola made this transfer will be made without charge, and the price will be fixed by the Government, at current rates.

Contrary to rumours, only consumers with contracted power of over 10 kw, who were being supplied by Iberdrola Distribución Eléctrica, SAU were strongly advised to opt for a deregulated market retailer, otherwise their contract was automatically be taken over by Iberdrola Comercialización de Último Recurso, with prices becoming progressively higher to a rate determined by the Ministry of Industry, Tourism and Trade, which could be as much as by 5% every month until the end of the year.

Effectively, these are the instructions that Iberdrola offered:
Consumers with contracted power of up to 10 kW could:
1. Continue as they are now and their contract will be automatically transferred from Iberdrola Distribución Eléctrica, SAU to Iberdrola Comercialización de Último Recurso, SAU, which will apply the LRR established by the government, at the current rate and without any break in supply.
2. Select an alternative last resort retailer, which will also apply the Government regulated LRR.
3. Choose an independent retailer from the deregulated market, as listed on the reverse of the letter from Iberdrola.
Consumers with contracted power above 10 kW could:
1. Select a retailer from the deregulated market.
2. Remain as they are and allow the contract to be transferred from Iberdrola Distribución Eléctrica, SAU to Iberdrola Comercialización de Último Recurso, SAU, but be mindful of the higher charges.

The Social Rate (as described by Iberdrola)

Provisionally, until the government establishes the announced per capita income indicator (based on social, consumption and purchasing power parameters), the Social Allowance will be open to consumers with contracted power under 3 kW, retired persons collecting a minimum pension, persons over 60, families with more than four children, and families with all members unemployed.

The Subsidised Rate for Underprivileged Homes

Article 2 of Royal Decree-Law 6/2009 establishes the creation of a subsidised rate for underprivileged homes that will benefit individual electricity consumers in their homes. These individuals must be subscribed to the last resort rate and comply with a series of social, consumer and purchase capacity characteristics. To this end, a threshold will be established in reference to a per capita family income indicator that will require official confirmation of income established by the corresponding regulations.

Temporarily, while the Government establishes the per capita income indicator – and depending on social, consumer and purchase capacity indicators – those individuals with a contract for power under 3 kW, retired persons over 60 years old with a minimum pension, large families and families with all members unemployed will be eligible to subscribe to the Subsidised Rate for Underprivileged Homes.

So where do we stand?

Because of our occupational pensions, I don’t think that Pam and I would qualify for the Social Rate.The contracted rate for our house is 5.75kW, I expect others on the estate are contracted for the same with the possible exception of those who have full air conditioning installed by the builder who I think have a contract for 13kW. Because we have done nothing, we will have been moved on to the Last Resort Rate and are now billed by Iberdrola Comercialización de Último Recurso.

From all that I have read, it seems that there would be no advantage for us moving to another supplier. As low consumers, we already have the most advantageous rates set by the government. From what I understand, If we did move, the new company (unless they were deregulated) would place us on the same Last Resort Rate. However, it is different for people with a contract for over 10kW who are strongly advised to change to the deregulated market otherwise they will face increases of 5% every month. The potential savings for those users are in the order of 15%.

Of course, to make matters more confusing Iberdrola offer a service called fixed fee which is similar to schemes in the UK which allow you to spread your bills out and pay the same amount each month. They also offer to take over the supply of your gas and offer a 15% discount for the first year. Sadly they are talking about natural gas, not the propane that we are contracted to .

*Tarifas de Último Recurso (TUR)

** Suministro de Último Recurso (SUR),

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