Endesa decides not to charge consumers for the social electricity tariff

Endesa announced on Tuesday it would not pass on the cost of the social electricity tariff to residential customers under a new cost-sharing model that allows suppliers to charge the amount to the end consumer.

In a statement sent to the media, Endesa said that “it will not pass on these costs to all of its clients as long as they are private clients,” stressing that “this decision will have a material impact on Endesa Portugal’s results.”

Lusa asked the main electricity suppliers – Endesa, EDP, Galp and Iberdrola – whether they would reflect the costs of the social electricity tariff on customers’ bills, but has not yet received any further responses.

In mid-April, the Energy Services Regulatory Authority (ERSE) published guidelines for a new funding distribution model for this support, estimating that it would cost producers €44.4 million and suppliers €92.1 million in 2024.

To this amount must also be added 14.8 million euros (5.3 million euros for electricity producers and 9.5 million euros for suppliers) covering the period from 18 November to 31 December 2023, since the model is retroactive to the approval of changes by the previous government.

The directives come into force on April 1 and suppliers can, if they wish, pass on the costs to the end consumer.

Under the previous model, the costs of the social electricity tariff were shared among the largest producers, but last year the European Commission upheld complaints brought by EDP, leading to cost sharing with a wider group of companies.

The ERSE Tariff Council estimates that the impact on the end consumer could increase bills by 1.13% on the free market and 0.93% on the regulated market.

The social electricity tariff represents a 33.8% discount on regulated market prices for families on lower incomes and was benefited by 758,766 households in March this year, according to the Directorate General of Energy and Geology (DGEG).