The VPSC or Voluntary Price for Small Customer, is the system for establishing the price of electricity introduced by the government for customers in the regulated market (customers that have a contract with a Reference Reseller Company with a contracted power that does not exceed 10kW. On 28 March 2014 (Royal Decree) the VPSC tariff replaced the Last Resort Tariff (LRT).
With the entry into force of the VPSC, electricity bills still have three components:
- The cost of producing electricity.
- Access tolls, determined by the Ministry of Industry to cover all the activities related to supplying homes with electricity and other costs related to the electricity system.
- Relevant taxes.
With the VPSC, only the way in which the cost of producing electricity varies.
What is the difference between the VPSC tariff and the old LRT tariff?
When the TUR system existed, the price of electricity was set at quarterly auctions between power generators and electricity suppliers. This disappeared with the PVPC system, and new market conditions were introduced by which prices vary every hour of the day depending on supply and demand. Different factors influence the rise and fall of the price of the kWh in the PVPC regulated tariff system.
How is the VPSC billing carried out?
This new system will be applied in two ways:
1. If you already have a smart meter
It is possible to know how many kWh you consume every hour of each day, so you only have to apply the prices notified by Red Eléctrica Española, the corporation which operates the Spanish national electricity network.
The smart meter must be integrated into the remote management system, and the provider will use this system to bill you based on your actual profiled consumption.
The meter will have some data, also present on your invoice, such as the power rating you have signed up for, access fee and whether you are a beneficiary of any discounted rates.
It is possible to know how many kWh you consume each hour of each day, so you simply have to apply the prices as reported by the Spanish Grid (Red Eléctrica Española).
2. If you don’t yet have a smart meter
It is impossible to know how many kWh you consume each hour, so you are applied the profile of an average consumer (created by Red Eléctrica Española).
In principle, since 2019 all households should have smart meters connected to the remote management system, so it is most likely that you do have it installed and do not need to perform any additional procedures.
If you are still unsure whether or not you have one installed, you can contact the power distribution company and ask if your smart meter is available.
The distributor assigned to your geographical area will be in charge of changing the meter and notifying you before making the change. They will need to send a specialist technician to replace your analogue counter with a digital one. Remember that you should not make any payments to the authorised technician who removes the meter and installs the new one.
What Does the PVPC Billing Model Consist of?
On the regulated electric market, you are billed based on:
- Your real consumption during each hour.
- The price of electricity for that same hour.
The real and exact consumption during each hour is provided by smart meters.
The price of the kWh at the PVPC rate changes every hour of every day. With this tool, you can consult the updated electricity price.
By multiplying the kWh consumed during every hour by the price of the kWh in each one of these hours, you obtain the result of what you will be billed for your energy consumption.
Which customers does the PVPC model apply to?
Users of low-voltage electrical networks who have contracted a power rating less than or equal to 10 kWh are eligible for the PVPC. The vast majority of homes in Spain fall beneath this power rating threshold, so it is common to have access to this rate.
Additionally, the law also provides that this billing modality should be available to customers who, like the ones stated above, have a power rating less than or equal to 10 kWh, and who also contracted the last resort rate before entry in force of the Royal Decree, without having changed their rates or requested another.
This rate (PVPC) applies to all customers who are in the regulated market. There are 2 fundamental elements to this rate: