Last Resort Tariff (LRT) What is it and how can it be contracted?

There has been a lot of talk in recent months about the Social Rate for electricity, the electricity rate regulated by the Government that provides a discount of between 65% and 80% for consumers with lower incomes (and for officially declared large families).

But what about gas? Is there anything like a Social Rate for gas? More or less. It is called Thermal Social Bonus and its purpose is to help meet heating, hot water and cooking expenses.

However, financial aid (electricity and thermal Social Bonus) must not be confused with regulated rates. The intention here is to remind you of the difference between the free market and the regulated market. They are not a flat rate either (but rather a discount to help you pay less if you meet certain requirements.

• In electricity, the regulated rate is called PVPC (Volunteer Price for the Small Consumer).
• In gas, the regulated rate is called Last Resort Tariff (TUR).

What is the gas TUR

It is a rate for natural gas regulated by the National Commission on Markets and Competition (CNMC) and the Ministry of Industry:

• There is a single rate throughout Spain: no matter where you live, the conditions are the same.
• The TUR specifies the maximum and minimum prices that gas suppliers can charge you.
• This rate cannot compete with prices on the open market for gas: as with electricity, for gas there is also an open market and a regulated market. The TUR is the regulated market rate.

To contract the regulated gas tariff (LRT) you need to contact any of the last resort retailers. The last resort retailer for the Endesa group is Endesa Energía XXI.

Types of last resort tariffs

Natural gas users have the possibility of benefiting from three last resort tariffs: One is intended for low consumption (LRT1), one is designed for intermediate consumption (LRT2) and there is another for those with high gas consumption (LRT3).

• LRT1: Designed for those who have an annual consumption equal to or less than 5,000 kWh of natural gas, and with a supply pressure equal to or less than 4 bars.
• LRT2: Designed for those who consume between 5,000 and 15,000 kWh of natural gas per year, and with a supply pressure equal to or less than 4 bars.
• LRT3: Specially designed for those consuming more than 15,000 and less than 50,000 kWh of natural gas per year, and with a supply pressure equal to or less than 4 bars.

In general, domestic consumers are connected to a natural gas network with a pressure of 4 bars and their consumption is far below 50,000 kWh. To give you an idea: A Spanish home that uses gas for hot water and heating has an annual consumption of about 9,000 kWh. However, if natural gas is not used for heating, consumption goes down to 3,000 or 4,000 kWh per year.

What are the prices for the LRT?

In LRT1 the fixed component of the bill (what you pay every month regardless of your consumption) is cheaper, while the variable component (the gas you consume) is more expensive.

In LRT2 the fixed component of the bill is more expensive, but the variable component is cheaper than in LRT1.

Finally, in LRT3 the fixed component of the bill is higher, but the variable component is cheaper compared to the above tariffs.

Prices change once a quarter depending on the cost of natural gas in the market auctions.

Who can opt for the LRT for gas?

To be able to contract the LRT you need to consume less than 50,000 kWh of natural gas per year. This figure is very high for a domestic consumer, since it is 5 times more than what an average household usually consumes for heating and gas-fired hot water.

Which LRT is most suitable for you?

It is not possible to choose a specific LRT since it is assigned based on your consumption. If you consume less than 5,000 kWh per year, you will be assigned LRT1, if you consume a maximum of 15,000 kWh, you will be assigned LRT2 and if you exceed that figure you will be assigned LRT3.

Differences with the electric Social Bonus

Although the quick way to introduce the LRT for gas is to compare it with the Social Bonus for electricity, the fact is that they are significantly different:

• The Social Bonus is awarded to those who have fewer resources (and officially declared large families) while to be given access to the LRT it is only necessary not to exceed an annual consumption limit.
• The Social Bonus applies a discount on the PVPC regulated electricity tariff, while the LRT is a tariff in itself, with its own prices.
• The electricity Social Bonus would be more comparable with the Thermal Social Bonus. Both have been designed to help people in need, although there are differences: The electricity Social Bonus is a discount applied to all bills; the thermal Social Bonus is a single annual payment that varies depending on where you live.