Regulated electricity tariffs fall by 3% in April, but will still be among the most expensive on the market

The Energy Services Regulatory Authority (ERSE) has approved an interim update of electricity tariffs in the regulated market, estimating that from April the average bill of consumers with regulated prices will decrease by approximately 3%.

This reduction results from a mechanism provided by the regulation for the electricity sector, according to which whenever there is a difference equal to or greater than 10 euros per megawatt hour (MWh) between ERSE’s forecasts for the wholesale price of electricity and of the actual cost in the market, the regulated tariffs are subject to an update of 5 euros per MWh in the energy component in the direction of the deviation.

Now, for this year ERSE’s forecast update for ERSE’s wholesale costs represents a deviation of 73 euros per MWh from the implicit tariff forecast announced in December and effective last January. Despite a discrepancy of up to 73 euros, the downward revision of the energy tariff for approved customers will be only 5 euros per MWh, equivalent to 0.5 cents per kilowatt-hour (kWh).

On June 15, ERSE will carry out a new evaluation of the deviations and if there continues to be a deviation greater than 10 euros, there should be a new interim update of the regulated prices, but again limited to 5 euros per MWh in the energy component.

According to ERSE, this downward revision of the regulated prices will mean that a family with a conventional power of 3.45 kVA and an annual consumption of 1900 kWh (which currently has a monthly bill of 36.6 euros) will save from April 1.02 euros per month.

A family with a conventional power of 6.9 kVA and an annual consumption of 5000 kWh (currently with a monthly bill of 92.4 euros) will save 2.83 euros per month.

Indexed prices continue to be more advantageous

Although the reduction in April is beneficial for the 988 thousand customers currently served by regulated tariffs, the truth is that regulated tariffs will continue, even with the reduction, to be among the most expensive in the electricity market in Portugal.

Currently, the simple electricity tariff on the regulated market is 16.24 cents per kWh. Assuming a 3% reduction, or 0.5 cents per kWh, the regulated price would rise to about 15.7 cents per kWh.

However, the ERSE simulators show that today the most competitive prices are in the liberalized market (rather than the regulated one) and within it to suppliers with tariffs adjusted to the wholesale market.

According to the simulators, CoopĂ©rnico’s indexed offer has an estimated cost of 6.93 cents per kWh, Luzboa 6.4 cents per kWh, Plenitude 6.49 cents and YesEnergy 6.84 cents.

Among the biggest suppliers, Galp charges 15 cents per kWh, Iberdrola 11.96 cents, Endesa 11.4 cents and EDP 13.15 cents.

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