DECO informs…“I have heard about a 5% increase in electricity bills. Can you explain these new prices?”

“Clients have been paying more for electricity since January 1. The new prices, which will be in effect during the first three months of 2014, directly affect those who have yet to switch to the free market, but also impact on other customers. As many suppliers define their plans by applying discounts to ‘tarifas transitórias’ (the tariff for those who have yet to switch to the free market), increases will end up affecting those who have already changed as well.
Basically, the structure of the tariff has been changed. There has been a decrease in the ‘termo fixo’ (what clients pay for contracted power) and an increase in the ‘termo variável’ (what the client pays for the amount of energy used). Although the average increase is 2.8%, it is not the same for everyone. It actually ranges between 1.5% and 6% for lower wattage levels, which leads to smaller consumers being the most affected. In the case of ‘tarifas bi-horárias’ (which present different prices for different times of the day), the increase is over 4%.
As if these price hikes were not enough, the audiovisual tax charged in electricity bills has increased 42 cents and is now placed at €2.81. As only annual electricity consumptions below 400kWh are exempt from this tax, the total increase in electricity bills is much larger for the vast majority of Portuguese people.
Due to these increases, it is important to decrease electricity usage and choose the cheapest suppliers, which you can find by using our simulator on the association’s internet page: www.deco.proteste.pt
In this new column, Portuguese consumer watchdog DECO will be informing readers of various interesting issues and laws affecting consumer decisions.