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The cap on the price of gas and how it affects your electricity bill

A cap has been set on the price of gas used in electricity generation. This measure aims to bring down your electricity bill. But, at the same time, it generates additional costs that all consumers will have to pay.

What is happening to electricity prices?

The complicated international situation has seen gas prices rise. Gas, which is essential in generating electricity, is also increasing the price of electricity.

 

What is the gas price cap?

The cap on the price of gas is a temporary measure put in place by the government (Royal Decree-Law 10/2022) with the objective of containing electricity prices by setting a maximum benchmark price for natural gas used in electricity generation.

It is not a rebate or a discount: it is a "ceiling".

Although we talk about gas, it only affects electricity bills (as it applies to gas used in generating electricity).

 

When will the gas price cap be applied and for how long?

It is an urgent, temporary measure, which has been applicable since 15 June 2022 and will continue until a decision is made to cancel it (at the latest, 31 May 2023).

 

What is the amount for the gas cap and how is it calculated?

The cost of the cap on gas prices is variable for each hour of the day and very unpredictable, because it depends on the market price for natural gas, its impact on the electricity market and how we consume. 

The amount in your bill is the result of multiplying your consumption by the cost of the gas price cap in €/kWh. 

For an average customer, the cost of the cap on gas prices was between €2.21 and €18.38 for the month of October*.

Average electricity consumption per household published by the IDAE (annual consumption of 3,487 kWh).

 

Is the gas price cap bringing electricity prices down?

As a measure for containing the price of electricity, it is partially working. Prices are lower than they were a few months ago, although they have not returned to last year's levels.

There is a difference between the real price of gas in the international market and the price of "capped" gas in Spain. This difference between real price and "capped" price is being financed by all electricity consumers and appears in their bills.

 

Where does the cap on the gas price appear on the bill?

If you have a contract with a Deregulated Market retailer, this only applies to the mainland and is clearly broken down on your bill.

There are two different concepts, but you will only see one of them on your bill:

  1. A lower cost, which applies to all customers and destined for the Spanish Electricity Grid (REE). You will see it on your bill under the name "Maximum cost of gas RDL10/2022 REE".
  2. Another for a more significant amount, related to the Market Operator (OMIE). You will see it on your bill under the name "Maximum cost of gas RDL10/2022". This only applies to contracts after 24 April 2022 or if the following occurs during the dates when the regulation is applicable:
  • You change your tariff or retailer. 
  • The price of your contract is modified.
  • Your contract comes up for renewal.

Summary: If you are with a deregulated market retailer and you have not seen the additional OMIE amount (Maximum cost of gas RDL10/2022) on your bill, we recommend that you do not change anything. This way you will avoid incurring this cost before it is necessary. If you change retailer, you will assume the highest cost.

 

Endesa is offering special discounts of up to 20%

At a time of additional costs and market volatility, Endesa is the answer. If you are looking for savings and peace of mind, Endesa can offer you a special discount of 20% on the energy term.

FAQs

When the time comes, you will see it in two ways:

  • The lower cost, destined for the Electricity Grid (REE), will appear in an additional line on your bill under the following heading "REE cost for gas price cap RDL 10/2022*
  • The concept for a larger amount, which includes the cost of the Electricity Grid (REE) and the OMIE, the electricity market operator, will appear under the name "Cost for gas price cap RDL 10/2022*". 

This is not a fixed amount as it changes between bills, varying depending on demand for energy. 

The gas price cap is volatile and unpredictable. It fluctuates hourly, as it is the difference between the actual price, which is subject to market variations, and the ceiling set by the Government.

Electricity suppliers use the official hourly price published by the market operator (OMIE), which you can find on its website.

This measure will apply from 15 June 2022 and is expected to end on 31 May 2023.

The cost of the gas price cap varies every day, as it depends on supply and demand for gas in the wholesale market. This cannot be known in advance, so it is impossible to calculate what the final bill will be after including this amount.

If you have an unregulated market tariff, the effects of this measure will be applied progressively as current contracts are renewed or extended. It will be included in your bill as a separate item.

If at the moment you do not see in your invoice the concept destined to OMIE ("Maximum cost of gas RDL10/2022") do not change your tariff or retailer because from that moment it would begin to apply to you.

If you want your bill to remain stable throughout the entire year, then apply for the Endesa Única Tariff, which means you don't have to worry about price variations on your bills.

This measure is being applied by all suppliers in the unregulated market and the regulated market. The amount is the same for everyone.

If you are worried about when this date is, we recommend that you contact us so we can inform you when it is.

The effect of this measure is variable and will not always be the same, as the gas price cap varies every hour. The prices are published officially every day by the Electricity Market Operator.

The gas price cap applies to all suppliers in the unregulated and regulated markets. If you change your supplier, they will start to apply the gas price cap as soon as you agree a contract with them.

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