The Minister of Industry, José Manuel Soria, has announced that the rates on electricity will go up 3% as of the 1st of January.

Over 20m electricity users with contracts of less that 10 kilowatts will see their monthly bills increase because of this planned rise, but it doesn’t end there because the said minister also foresees that those who have over 3KW and with a monthly consumption of 193KW will also have a surcharge of up to 8%, if they go over by more than 10% on their average consumption. For this reason, the consumer rights organisations interpret this as a general increase of up to 9%.

Readers will remember that there was a 7% increase in April and a 4% one in July, although in October it came down by 2.4%. Consumers did not really see a 2.4% drop because it coincided with the increase in IVA, when it went up from 18% to 21%.

On top of that, the Supreme Court ruled that the electricity companies could fractionizar (spread over various monthly bills) an increment from October 2011 onwards, which the Government had blocked. If you look at your electricity bill, you will see an extra 10 euros, more or less, corresponding to this.

Most of the problem stems back to decades of the Government imposing a price for electricity below the market rate, accumulating a deficit of 2.4b euros. By law, this has to be made good, but the Government is shying from it because the increase would be huge.

The Comisión Nacional de la Energia complains that this penalization on usage over 10% of the average monthly consumption does not take into account the amount of people living in the house, nor, indeed, the season. This is further aggravated by the fact that electricity companies carry out estimated readings that do not correspond to real consumption.

(News: Spain)