Indexed electricity rates

Indexed electricity rates

What does indexing the tariff involve?

It involves paying a variable price for the electricity consumed. With the Indexed Electricity Tariff, the consumer accesses the free market and pays for their business's energy at cost price plus a small management fee.

With this tariff you will pay for energy every hour at the real price at which it is being sold in the electricity market and you will avoid paying the risk premium associated with any fixed tariff throughout the contract period.

Benefits of the Indexed Household Rate

The main advantage of this tariff is the savings you'll see on your business or premises' electricity bill. Remember that you can adjust your consumption to take advantage of off-peak hours when electricity is cheaper and, at the same time, avoid the risk premium of fixed-rate tariffs.

This tariff allows for efficient and optimized energy management that you will notice from the first month.

  • Pay for each hour what the electricity costs, thus maximizing savings.
  • Pay for energy at wholesale prices.
  • Avoid the risk premium associated with fixed rates.

Components of the Indexed Household Tariff

With the Indexed Tariff for small businesses, you should take into account the two components of the bill that are key to understanding the consumption and cost of this tariff:

  • Power termThis doesn't vary based on consumption; it's a fixed daily charge. It's the price you pay for the contracted electrical power for your business or premises. It's measured in kW. Depending on your business, you'll need to contract more or less power. For example, the more power you contract, the more electrical appliances you can have running, but you'll also pay more. In short, the power charge will be determined by the electrical power you subscribe to with your energy supplier and its price.
  • Energy termWith the Indexed Tariff, the price of energy is based on consumption and the hourly price set by OMIE (Iberian Electricity Market Operator), plus a small management fee for the energy supplier. This way, you pay for energy each hour at the actual wholesale electricity market price. This avoids paying the risk premium associated with fixed tariffs throughout the contract period.

 INDEXING FORMULA

INDEXED PRICE: The monthly energy charge will be calculated on an hourly basis. The hourly price, calculated according to the following formula, will be multiplied by the customer's hourly consumption at the point of origin, based on the time-of-use profile as established in the General Contract Terms. Additionally, a Financial Cost of 0.3% will be applied to all components of the contract, including VAT or IGIC.

              PEh= [(PMDh+COSh+PC3h+Dh)*(1+Losses)+ GOh] * 1,015 + PaEh

Where:

PEh = Hourly energy price

CDh = Cost of energy scheduling deviations
PMDh*= Daily market price (OMIE)

PC3h = Financing of capacity payments (Regulated cost)
COSh = System operator costs (REE) + OS and OM remuneration

PaEh = Energy term of the access toll + Energy Efficiency Fund + Marketing Charges (CC**)

GOh = Operating Expenses

*In SEIE, the SEIE hourly price applies to marketers (except CUR).

**CC: €0.0019/kWh for 2.0TD tariffs with contracted power ≤10kW, €0.0007/kWh for 2.0TD tariffs with contracted power >10kW and €0.00055/kWh for 3.0TD and 6.1TD tariffs.