Electricity bill overhaul: Price dictated by time of use

CHANGES to electricity tariffs have come into force from today (Tuesday, June 1) making it cheaper to use appliances in the early hours of the morning and more expensive in the middle of the day.

Using power at peak times will come in considerably more expensive than now, but at off-peak times, up to 95% less.

During 'flat rate' hours, charges will be the same as they are now.

The three price slots will only benefit customers who do not already have a 'time discrimination' contract and who stick to them as much as possible – those with a 'timed' tariff will see a small increase in their bills, typically around €2 a month.

Those who will benefit the most are households and business premises with a power level of between 10-15kW, although the vast majority of customers fall within this category.

For the average consumer, with a 2.0A tariff and 4.6kW of power and who uses around 3,500kW (3.5mW) per year, the saving will be around €21 annually; for those with a 'time discrimination' contract on the same power level, the changes will bring an increase of around €34 a year.

The changes will apply to all consumers, whether their contract is directly with the electricity board, Iberdrola, or through an independent distributor on the open market.

According to the National Markets and Competition Commission (CNMC), the standing charge for the power level will reduce, but the price of power per unit will rise in general, meaning it will be up to the consumer to watch what appliances they use and at what time of the day. 

As a result, the cost of electricity bills will be far more in the customer's hands than ever before – until now, only around 30% of what consumers paid related to actual power used, with the rest being standing charges and taxes, meaning there has never been any real incentive to try to save electricity.

Reminiscent of the days when people would avoid making phone calls before a certain time in the evening so as not to pay 'peak-time' prices, those trying to watch their expenses should steer clear of using electricity between 10.00 and 14.00 or between 18.00 and 22.00, as this is when the cost soars.

The best time to put appliances on is between midnight and 07.59, although this may not be practical for those living in terraced houses or apartment blocks, as the noise may spark complaints from the neighbours when they are trying to sleep.

Fortunately, off-peak rates are charged all weekend, 24 hours a day, and on national bank holidays in addition where these fall on a weekday – those which cannot be 'substituted' or moved, such as Christmas Day, New Year's Day, the Three Kings (January 6), Labour Day (May 1), the Feast of the Assumption (August 15), Spain National Day (October 12), All Saints' Day (November 1), Constitution Day (December 6), Feast of the Immaculate Conception (December 8), and Good Friday.

It is unlikely any other weekdays over Easter will count, given that Good Friday is the only one that is marked nationwide – in some regions, Easter Monday is a public day off, and in others, Maundy Thursday is a non-working day.

Regional fiestas or bank holidays count as a normal working day for electricity tariff purposes.

All other times of the day count as 'flat rate' and are charged at the middle band, or the price that has applied at all hours up until now – from 08.00 to 09.59, from 14.01 to 17.59, and from 22.01 to 23.59.

The CNMC says the aim is to 'discourage the practice of not putting several appliances on at once', where the consumer's electricity circuit has enough power to cope with two or more operating at the same time.

Personal electronic devices such as phones and laptops on charge, coffee machines left plugged in, video-game consoles, and the TV when in use, as well as electronics left on 'stand-by' tend to use the most electricity; appliances traditionally thought to drink power, such as dishwashers and tumble-dryers, are much more economical than 'brown goods'.

Significant savings can also be made by switching to LED lightbulbs, typically between 3-7W, as opposed to non-LED versions which range from around 35 to 50W.