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The cap on the price of gas and how it affects your electricity bill
In 2022, a cap was set on the price of gas used to generate electricity. This measure aimed to bring down your electricity bill; however, at the same time, it generated additional costs that all consumers would 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.
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What is the gas price cap?
The gas price cap was a temporary measure put in place by the government (Royal Decree-Law 10/2022) to contain electricity prices by setting a maximum benchmark price for natural gas used in electricity generation.
This cap was neither a rebate nor a discount, but a "ceiling".
Although we talk about gas, it only affected electricity bills (as it applied to gas used in generating electricity).
When will the gas price cap be applied and for how long?
It was an urgent and temporary measure, decreed by Royal Decree-Law 10/2022, and applied from June 15, 2022, and extended until December 31, 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 appearing on consumers' bills is the result of multiplying their consumption by the cost of the gas price cap in €/kWh.
Is the gas price cap bringing electricity prices down?
It partially worked as a measure for containing the price of electricity; prices are lower than 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 the real price of gas and the "capped" price was financed by all electricity consumers and reflected in their bills.
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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.
Two different concepts are broken down, although you will only see one of them on your bills for 2022 and 2023:
- 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".
- 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 26 April 2022 or if the following occurs during the dates when the regulation is applicable:
- You changed supplier or product or had a modification in the price of your contract.
- Your contract came up for renewal.
FAQs
You can see it in two ways:
- The lower cost, destined for the Electricity Grid (REE), appears in an additional line on your bill under the following heading "REE cost for gas price cap RDL 10/2022*".
- The larger concept, which includes the cost of the Electricity Grid (REE) and the OMIE, the electricity market operator, appears 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 used the official hourly price published by the market operator (OMIE), which you can find on its website.
This measure was applied from 15 June 2022 to 31 December 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 the consumer had an unregulated market tariff, the effects of this measure were applied progressively as current contracts were renewed or extended. It appears on bills as a separate item.
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 was applied by all suppliers in the unregulated market and the regulated market. The amount was the same for everyone.
If you are concerned about the renewal date of your contract, we recommend that you contact us so that we can inform you when it is due for renewal.
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.
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