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The Catalan Ombudsman suggests measures to reduce the home electricity bill by half
The proposal, included in a new report of the Catalan Ombudsman, focuses mainly on distributing proportionally and fairly between all types of consumer uses (home, industrial, services, etc.) charges not related to consumption
With regard to the tax on electricity generation, which from April on will be added to the bill, Rafael Ribó emphasized that it goes in the opposite direction of the recommendations of the report
As far as taxation is concerned, it is suggested to reduce the tax burdens that are no longer justified, such as the electricity tax, and to bring the VAT of 21% to a reduced rate, similar to that applied by the nearby countries
The institution recommends to the State Administration that the procedure for the application and renewal of the social benefit be redefined, taking into account the rights of vulnerable people and the principles of administrative simplification
The Catalan Ombudsman has suggested that the necessary legal and political measures be taken to make a 50% reduction in the electricity bill for domestic purposes, that is, in the electricity supply contracts for home consumption.
The proposal, included in a new report of the Catalan Ombudsman, focuses mainly on distributing proportionally and fairly between all types or uses of consumption (domestic, industrial, services, etc.) charges not related to the expenses directly attributable to supply or consumption. They are concepts that are outside the contracted service, such as the commitment of remuneration for renewable energies and cogeneration or the rate deficit, and represent about 70% of the total amount that must be paid.
This is also the case of the tax on electricity generation (technically called tax on the value of electricity production), that next April, after six months of exemption decreed by the Spanish Government to modulate the increase in the price of electricity, will be added to the electricity bill. In this sense, and beyond increasing the bill by 4%, the Catalan Ombudsman, Rafael Ribó, has warned that this measure goes in the opposite direction of the recommendations included in the report. In fact, this is a topic on which the Catalan Ombudsman already intervened in November 2015, when he requested that the concepts other than consumption and imposed by the Administration be excluded from the bill.
The report, delivered to Catalan Parliament on Wednesday, March 27, 2019, makes a diagnosis of the current situation from analyzing the cost of electrical energy based on the three contributing components with a similar relative weight in the final amount of the bill: the electricity that is consumed properly, the cost of which is derived from the resulting price in the wholesale market, where generators and traders negotiate energy sales daily; the second component, which are the access tolls that serve to pay, on the one hand, regulated system costs such as transport and distribution of energy, but also other non-supply-related expenses, such as subsidies to renewable generation or financing of the rate deficit (energy policy decisions), and, finally, taxes imposed to the consumer (such as electricity tax and VAT).
As far as taxation is concerned, it is proposed to reduce the tax burdens that are no longer justified, such as the electricity tax, and bring the VAT of 21% to a reduced rate, similar to that applied by nearby countries. Other measures that are proposed are to remove the concept of rent from the invoice counter, since it is not economically justified (lack of cost-benefit analysis).
Other issues
With regard to the electric social benefit, the Catalan Ombudsman recommends to the State Administration that the procedure for the application and renewal of the social benefit be redefined, taking into account the rights of vulnerable people and the principles of administrative simplification.
Likewise, the Administration should take the appropriate measures for the regulatory development of Law 24/2015, which should include the establishment of a model of report of social services to determine if the person or the family is in one of the situations of risk of residential exclusion determined by the Law. The institution also reminds the obligation of public administrations to act against criminal conduct regarding electricity networks and the duty of distribution companies to inform the administrations of irregularities they detect.
Lastly, and for cases of vulnerable squatters, the Administration should conduct a socioeconomic study to determine whether the illegal occupation is out of necessity and, if appropriate, provide the right solution.
