Update Post: December 9, 2023 8:48 am
Pedro Sánchez is expected to shed light on his new Government this Monday and in a little less than a month and a half the renewed Executive will have to decide whether or not to extend part of the ‘social shield’ that he put in place as a consequence of the crisis derived from the invasion . from Russia to Ukraine. President Pedro Sánchez has already announced that the VAT reduction on food and free transportation for young people and the unemployed is being extended, but there are other support measures, but it is still unknown if they will continue.
Thus, the extension of the tax reduction on the electricity bill has remained up in the air. In addition, there is no information about starting the extra discount on the electric social bonus. Teresa Ribera, who until now served as third vice president and minister for the Ecological Transition and who appears in all the pools as one of the heavyweights who will continue in the Executive, is in favor of maintaining the measures that have been effective during the crisis.
In mid-October of last year, the Government increased the coverage of the social electricity bonus to 65% and 80% under the umbrella of a Royal Decree-Law that reinforced consumer protection in the face of the energy price crisis.
The extra protection of the social bonus ends on December 31
However, this greater protection of the social electricity bonus comes to an end on December 31 and would return to a 25% discount for vulnerable consumers and 40% for severely vulnerable consumers. Currently, there are around 1.5 million households that receive the social bonus, of which around 695,600 are considered vulnerable and around 818,100 are considered severely vulnerable. Yolanda Díaz, second vice president and Minister of Labor in the previous legislature, assured during the presentation of the PSOE and Sumar agreement for a new coalition Government that the number of beneficiaries of this more affordable bill will double to three million people.
The electric social bonus only applies to the habitual residences of natural persons (it is not valid for companies or corporations) and as long as they have a contracted power equal to or less than 10 kW. In order to request it, you must have contracted the regulated rate, the voluntary price for small consumers (PVPC), and also meet some of the personal, family or rental requirements, included in Royal Decree 897/2017, and with temporary effect. . , in Royal Decree-Law 18/2022.
The application must be processed through any of the eight reference marketing companies (COR) in Spain: six operate in the Iberian Peninsula, the Canary Islands and the Balearic Islands – and there are two specifically for Ceuta and Melilla -. Specifically, they are Energía XXI (Endesa), Curenergía (Iberdrola), Gas & Power (Naturgy), Baser COR (EDP), Régsiti (Repsol), CHC COR (CHC), Teramelcor (Gaselec Diversificación) and Energía Ceuta XXI (Endesa ). ).
The cost of the social bond is borne by all subjects participating in the activities of the electrical energy supply chain: production, transportation, distribution and marketing, as well as direct consumers in the market. However, this methodology is recent and historically it was financed by electricity suppliers, with an annual cost of about 200 million euros. The Supreme Court has annulled the financing mechanism up to three times, considering it “discriminatory.” In this sense, the employers’ association of the large electricity companies Aelec, which represents Iberdrola, Endesa and EDP, defends that the social bonus, as a “social policy tool” for the most vulnerable consumers, should be financed through the General Budgets of the State (PGE).
The tax reduction on electricity is also up in the air.
Within the anti-crisis package, the Government also included a new temporary rate for all those families with up to 28,000 euros of income and a number of people living in the same home. In this case, the special discount was up to 40% of the electricity they consumed. Likewise, until December 31, a VAT of 5% is applied to electricity, while the Special Tax on Electricity is reduced to 0.5% (the minimum allowed by Brussels) and the Tax on the Value of Production of Electric Energy (IVPEE) of 7% is suspended.
Sources from the ministries for the Ecological Transition and Finance consulted by La Información stick to the calendar and assure that there has not yet been any decision made regarding the continuity of the electricity tax reduction. The bill could be between 15% and 20% for consumers with a regulated rate if they do not continue. Those on the free market have agreed on a fixed price with their marketing company and the increase would vary depending on each agreement. The VAT on gas is also at 5% and, since December 2022, the Last Resort Rate (TUR) cannot increase by more than 15% from one quarter to the next.
The European Commission has sent to the member states, for consultation, a draft proposal to partially adjust the schedule for the progressive elimination of state aid, known in Spain as the social shield, intended to provide a response to the crises after the invasion . on from Russia to Ukraine and the unprecedented rise in energy prices. The new time limit for its application is March 31, 2024. However, in its autumn forecast report, Brussels expects that “all energy-related measures (except the extraordinary tax on energy companies) will expire n December 31, 2023”.