Those of us with a contracted power rating of less than 10 kilowatts (ours akin with most houses of this size is 5.75lw) are on what is called the tariff of last resort (TUR). Since 2009, this is the only tariff which is set by the Government who regulate the cost.
Throughout 2012, the rate rose by 4% in April, by 7% in July and actually fell in October by 2.4%. However, that decrease was wiped out when VAT rose from 18 to 21%.
The argument used to explain these continuous cost increases (since 2006 electricity has always risen well above inflation) is the so called tariff deficit. That is, companies are spending more on producing electricity than they charge for it. Successive governments have always admitted this deficit which is currently estimated at 24,000 million euros.
The government of Mariano Rajoy wants to end the deficit, which for 2012 may well rise to 3,452 million- twice the legal limit set at 1,500 million and they intend to introduce taxes to achieve this.
There are two elements to the price of electricity; 50% is for the cost of generating the power and the other 50% for so called access fees which are set by the Goverment.
Where is this leading to you ask – well the price of electricity is set to go up in January by about 3%. It could have risen more if the Government hadn’t decided to freeze the 50% access fees. Those who are high users (consuming more than 10% above the average) will pay an extra 1 to 8% on top of that. What is the betting that those of us who live in houses with air conditioning, pool pumps and lots of modern appliances will fall into that category?
Hurry up Britain and get my claim for “winter fuel allowance” processed, I think I’m going to need it!