Understanding the electricity bill is important in order to not pay more money than necessary for the electrical supply. Having a clear understanding of the key concepts included in the bill and knowing the energy needs of our home can help us reduce the economic cost of electricity. Below, we offer a small guide to better interpret the bill and to determine if it is necessary to reduce the contracted power according to what we actually consume.
The electricity bill mainly charges four concepts: the consumed energy, the contracted power, the meter rental, and the taxes.
1. Consumed energy: It is the amount of energy (in kWh) that has been used during the billing period. It is composed of three concepts: the cost of energy, tolls, and charges.
a) In the regulated market, the cost of energy varies for each hour of each day depending on the daily wholesale market prices, which depend on the supply (amount of energy generated) and demand (amount of energy required). In the free market, prices can be freely offered.
b) Tolls and charges are constant and are divided into 3 periods. P1 (peak) from 10 am to 2 pm and from 6 pm to 10 pm on weekdays, P2 (flat) from 8 am to 10 am, from 2 pm to 6 pm, and from 10 pm to midnight on weekdays, and P3 (off-peak) from midnight to 8 am on weekdays and all day on weekends and national holidays. P1 is the most expensive period and P3 is the cheapest.
2. Contracted power: The contracted power (in kW) limits the amount of energy we can demand at a given moment, the simultaneity of use of the home’s electrical equipment. The more devices that need to be connected at the same time, the more power must be contracted. The power is a fixed term that is divided into two periods: P1, more expensive, from 8 a.m. to 10 p.m. on weekdays, and P2, cheaper, from 10 p.m. to 8 a.m. on weekdays and all day on weekends and national holidays. In a domestic supply, the contracted power can be a maximum of 15 kW and can be contracted in intervals of 0.1 kW.
3. Meter rental: The meter is usually owned by the distribution company and is paid for on each bill as rent.
4. Taxes: The electricity bill includes two taxes, the electricity tax (5.11%) on the total energy and power; and the VAT (21%), on the total bill.
5. Other concepts: In some cases, other concepts may also appear on the bill, such as adjustments for retroactive regulatory updates, or costs related to transport and distribution tolls, such as those related to a decrease in power or the deposit for the initial contract. In bills from the free market, it is also common to offer additional services that are not related to the electricity supply, such as a maintenance service for household appliances.
If there is a surplus from a self-consumption installation or a discount for the social tariff, it is also deducted on the same bill.
In addition, the electricity bill provides information about the supply. We highlight the following:
0. Logo and information of the supplier with whom we have a contract (tax ID, corporate name, and registered address)
1. Invoice details (invoice number, billing period, etc.)
2. Summary of billing (includes the total price to be paid on the invoice itemized by concepts)
3. Electric consumption information: Energy consumption in the entire period expressed in kWh. The reading can also be found for the three billing periods (peak, standard and off-peak).
4. Contract information: In this section, we find all the necessary information about the supply point and contractual data, which are essential when carrying out procedures with our supplier or the future supplier that we want to hire, such as the account holder, the address, the CUPS (Unified Supply Point Code) or the contracted power.
Reducing Expenses in 5 Steps
A formula for reducing electricity costs is to have the appropriate contracted power for the energy consumption of the home. To do this, you must follow the following steps:
1. Look for the contracted power (in kW) on your electricity bill.
2. Find your maximum consumption (also known as maximum demanded power).
3. Look for the CUPS (Universal Supply Point Code).
4. If necessary, call your company.
5. Request a power reduction. The cost of reducing the contracted power is €10.94 (VAT included).
In addition, the Barcelona City Council has Energy Advising Points, a service that provides the necessary information, attention, and intervention for people to exercise their energy rights and companies do not deny them access to basic supplies. You can find more information about the service, such as contact channels and locations, at this link.