Changes to the electricity market

For the last decades, the Portuguese electricity market was under a pure monopoly – EDP – and it was subject to the direct control of the Portuguese authorities, namely regarding prices and tariffs, which were regulated every year by the government.

However, as a result of European regulations and also as one of the measures contained in the financial assistance package negotiated by Portugal, the electricity market has now been opened to more players and the regulated tariffs will gradually come to an end.

Therefore, the consumer is now free to select his/her electricity provider within the different options available. In addition, the consumer will also need to change from the regulated tariffs to the open market ones offered by the different providers.

In light of this, several of the existing providers have been actively promoting their services and contacting customers in different ways.  In this respect, EDP has also sent letters to all its domestic clients regarding the end of the regulated market and advising of the changes in the liberalised market.

However, it is important to understand exactly what these changes imply before changing to a different provider or tariff.

In accordance with the applicable regulations, the regulated tariffs will end as follows:

• ≥ 10.35 kVa

– July 1 2012

• ≤ 10.35 kVa

– January 1 2013

Consumers who do not change their provider within the time limits mentioned here will continue to have regulated tariffs but these will be decided by the Electric Services Authority and will be subject to gradual increases on a quarterly basis.

These tariffs will be fully terminated as follows:

• ≥ 10.35 kVa

– December 31 2014

• ≤ 10.35 kVa

– December 31 2015

After these deadlines, consumers will automatically shift to the general open market tariffs.

In light of this, it should be noted that there is no obligation to change your electricity provider or even your selected tariff straight away. However, it might be a good idea to start checking the options available with the other providers.

Currently, other companies operating in the electricity market are EDP Comercial, EGL, Endesa, Galp Power, Iberdrola and Union Fenosa (supplied in Portugal by gasNatural fenosa). As with any other service provider in open markets, consumers should request clear and precise information before making a decision on what provider to choose.

Francisco Barata Salgueiro can be contacted via email at [email protected]