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New measures for residents' associations with a community boiler

In Spain, there are 1.7 million homes with central heating and hot water from community gas boilers. The Government has announced a number of measures to respond to the needs of these consumers.

We explain briefly and simply the new measures in Royal Decree-Law 18/2022 related to residents' associations that have a community gas boiler.

The war in Ukraine has pushed up fuel prices since the beginning of 2022, something that all consumers have seen in their bills. Up to 18 October, measures had been launched to mitigate the effects of rising energy prices for families and businesses. However, residents' associations were not entitled to receive such aid until now.

 

What was the situation previously for residents' associations with a community gas boiler?

Due to their volume of gas consumption, residents' associations were not eligible for the so-called last resort tariffs (LRTs). LRTs are regulated market tariffs with the following characteristics:

  • The Ministry sets the conditions for these tariffs.
  • Rather than setting a price, it sets the formula for establishing the price in revisions.
  • It imposes 4 annual revisions (January, April, July and October).
  • There is no minimum duration.

There are several tariff types according to consumption:

  • LRT 1: up to 5,000 kWh/year. For homes where only gas is used to heat water and cook.
  • LRT 2: up to 15,000 kWh/year. For homes that, in addition to the above, use gas for heating.
  • LRT 3: up to 50,000 kWh/year. Especially for businesses or homes with high consumer.

 

What changes now for residents' associations with a community gas boiler?

Royal Decree-Law 18/2022 makes residents' associations and groups of residents' associations eligible for the LRT 3 tariff even if their consumption exceeds 50,000 kWh/year.

To have an LRT tariff applied, these associations must meet the following requirements:

  • The residents' association must be up to date in the payment of its bills from its current gas supplier.
  • The radiators in the homes must have individual heating meters or cost allocators from 30 September 2023. An exception is indicated for heating installations exempted due to the technical infeasibility of carrying out such work (according to Royal Decree 736/2020).
  • The building must have passed the energy efficiency inspection with a positive result (Royal Decree 1027/2007).

 

How does a residents' association apply for an LRT tariff?

The president of the residents' association must contact the gas supplier to submit an application, which must be accompanied by a declaration of responsibility that guarantees compliance with the above conditions.

They should attach the document of energy efficiency inspection, as well as the works project submitted to the Ministry of Industry for installation of the cost allocators, in cases where the homes do not already have them. In the case of buildings exempt from the requirement to carry out this installation, the document justifying this must be included.

If the works project has not been submitted or has not been approved, the residents' association must submit the Board of Homeowners' approval to have the cost allocator installation work carried out before 30 September.

 

Where should the application to contract an LRT gas tariff be sent?

The companies that can offer customers this tariff are called Last Resort Suppliers (LRSs).

To apply for the LRT tariff, the residents' association must contact its current supplier for it to identify which LRS in its business group is appropriate for making the application. The second case involves contacting the LRS with the largest market share in the Region where the residents' association is located.

 

How much can be consumed with the LRT tariff?

The LRT tariff's gas prices will only be applied to the volume of gas consumed equal to or less than the average consumed in the last five years (or the years available). Any consumption in excess of this average will have a variable component of 25% applied.

 

What happens if I do not install the consumption meters or cost allocators?

If a residents' association requests the LRT tariff without sending certification of installation of the consumption meters or cost allocators having been carried out before 30 September 2023, and if it is not the case that the installation is technically infeasible, a variable component increased by 25% will be applied to all of its gas consumption as of the time when the LRS begins to provide service with the LRT tariff to the residents' association.

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