A few people have asked me today about an additional charge on their electricity bill.this is the explanation 

The cap on the price of gas and how it affects your electricity bill

An urgent, temporary measure has been taken to establish a cap on the price of gas used to generate electricity. This not only directly affects the wholesale market, but also your electricity bill.

Cap on the price of gas: what it is, why, when and how this measure is applied

What is it? Gas used in thermal power plants to generate electricity has a new price cap. This measure was approved by the Government by means of a Royal Decree Law.

Why? The aim is to reduce the prices of electricity in the wholesale market.

When? It is an urgent, temporary measure, which applies from June 15, 2022 and until it is decided to cancel it (at most it would last until 31 May 2023).

How? The aim of establishing a cap on gas prices is to reduce the price of electricity in the wholesale market. But "putting a cap" on gas has a cost for everyone, since it is necessary to compensate those plants which will continue to buy gas in international markets. This measure will be financed by all consumers in accordance with the established regulatory conditions.

How the cap on gas prices affects your electricity bill

How does it affect you if you are in the unregulated market?

The cap on gas prices may appear on your bill in two ways:

Red Eléctrica (REE) costs: from 15 June 2022, all electricity clients living on the Mainland need to assume this small cost (those in the Canary Islands, Balearic Islands, Ceuta and Melilla are exempt).

OMIE costs: this cost is higher than the above and applies to Mainland clients who sign a new electricity contract from 26 April 2022 onwards, as well as those who renew a contract in force or change any of the terms.  

These costs will appear on a line in your bill entitled "Cost for gas price cap RDL 10/2022".