Prepare for the electricity bills to go up! Starting on February 1st, electricity prices are set to swell by an average of 9 to 10%.
Reasons for the Increase
This surge is not merely driven by an increase in the base rates. The “excise” tax, also previously known as the contribution to the public service of electricity, is readying for a significant hike.
Details of the Price Hike
The Minister of Economy has announced an increase of 8.6% for basic households and 9.8% for full and off-peak hour contracts. But the actual increase might turn out higher due to the tax levied on the electricity bill.
Tax Components of Your Bill
Every electricity bill includes three tax components: the VAT, the Tariff Contribution Transport (CTA), and the excise tax.
The excise tax, until now, had been limited to 1 euro/MWh (0.001 euro/kWh) due to a tax shield. But from February 1st, the excise tax is set to increase from 1 euro/MWh (0.001 euro/kWh) to 22.54 euros/MWh (0.02254 euro/kWh).
The full rate of the excise tax, which is 32.0625 euros/MWh, will apply from February 2025. This escalated excise tax will add approximately 25.85 euros to a typical two-monthly bill, resulting in a whopping 2,154% increase on that tax line.
Effects on the Overall Bill
This means that an overall bill of 150 euros will therefore swell to 175.85 euros, marking an overall increase of 17%.
Please note that the exact increase will differ based on individual contracts and consumption patterns.
