What factors are causing the rise in electricity prices? We’ll explain all!

News 2022-05-04

Are you interested in understanding the fundamental elements involved
in the increase of your monthly bill?

Here is a brief and simple explanation of the impact of these critical factors.

There are a number of factors involved in the increase in kWh rates. Consumers need to be able to understand these factors in order to have a clear understanding of why their monthly bill has increased.

In order to provide you with specialised and accurate information, we consulted experts in the electricity sector, such as companias-de-luz.com, who used their experience and knowledge to help us put together the information below.

In order to provide you with specialised and accurate information, we consulted experts in the electricity sector, such as companias-de-luz.com, who used their experience and knowledge to help us put together the information below.

Gradual increases in the price per kWh are related to factors that are internal of the electricity companies as well as external. These conditioning factors mean that the bills that customers receive for their electrical consumption may vary significantly.

Factors affecting the increase in price per kWh

When the price per kWh is established, the companies make a series of economic studies to adjust the costs. These increases are not made discretionally without taking prior considerations into account, but comply with formal requirements for price increases.

The increase is closely linked to electricity sector rates and the power that each customer has contracted with their company. One of the companies offering the best prices in Spain is Endesa, which has attractive rates in accordance with the requirements of each customer.

Most of the companies that market electricity are governed by the same parameters, which must be followed by all. Any significant discounts a consumer may see will depend on their consumption and any promotions obtained from the chosen company. Factors affecting the price are:

The costs detailed in the contract between the company and the user.
Commercial competition between different companies.
Off-peak discount rates.
Promotional discounts that are reflected in the bill.

Endesa, services and discounts

Endesa is a company dedicated to the commercialisation of electricity in Spain; it has been shown that it is responsible and maintains low billed amounts. It has constant promotions offering discounts that are extremely important to help family finances. Its residential plans are:

1. One
The general rule that determines how much is charged is governed by customer consumption. The one electricity rate applies for loads ranging between 10 and 15 kW, a range that covers a large number of Spanish households.

2. Tempo
Endesa offers its promotional hourly rate called Tempo Happy. With this plan the cost per kWh is 0 euros. It should be noted that this offer is only for customers who have contracted the service directly with Endesa. Other companies offer customers their own discounts for contracting with them.

How is the billed amount established?

In order to set the price per kWh, the electricity market must be taken into consideration. If the cost to the electricity companies trends upwards, it is logical to think that a cost increase will be quickly perceived by customers.

Rates vary according to factors that need to be studied in depth to provide the consumer with a detailed explanation of the increase in the cost of the service.

The considerations that cause the billed amount to vary are:

The general costs established by all companies in the electricity sector.
Agreements to set off-peak rates.
Average domestic rates.
Rates that are born and shaped by the so-called free market.

What to do when the price per kWh rises?

The first recommendation when faced with a rise in the price per kWh is to ensure rational and conscious electricity consumption. One must also look for a good company to contract a service that offers good rates with the best prices on the market.

If you want to know more about the price of the kWh consult in companias-de-luz.com

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Are you interested in understanding the fundamental elements involved in the increase of your monthly bill?

Here is a brief and simple explanation of the impact of these critical factors.

Are you interested in understanding the fundamental elements involved
in the increase of your monthly bill?