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Endesa fuels the commercial ‘war’ with a free month of electricity in the free market

Date: May 31, 2023 Time: 17:26:51

Endesa has intensified the commercial ‘war’ between the electric companies to attract customers. The company run by José Bogas has launched a new commercial campaign aimed at domestic customers with which it offers one month of free electricity consumption every year and forever if any of its rates are contracted on the free market.

As reported by the company, the promotion –known in advertising as ‘Your new favorite month’– will be available until the end of March for new residential customers and for those customers who already have a rate contracted with Endesa and decide to switch to Única, with in which a personalized fixed fee is paid, “with renewable energy, without permanence and with bonuses to consumers for meeting efficient consumption targets”.

To get this free month of electricity each year, new customers must contract the Tempo Happy, One Luz, Libre or Única rates (up to 10 kilowatts of power). They can carry out the procedure in commercial offices and service points or by calling by phone and the web. Endesa has 6.2 million electricity customers in the free market in Spain and another 3.7 million customers in the regulated market, making a total customer base of almost 10 million.

In May of last year, Iberdrola already launched a campaign in which it encouraged consumers to sign electricity supply contracts through free contracts instead of the Government’s regulated rate.

Galán called those of the PVPC “fools”

“Twenty million households in Spain have seen how their electricity bill is equal to or less than a year ago. They are those of those citizens who have a free rate. However, the rate contracts regulated by the Government have as reference the daily fluctuations in the energy markets and they were unbearable for the citizens attached to this rate”, they have explained from Iberdrola”, said the company after its president, Ignacio Sánchez Galán, described those who were still under the PVPC as “fools”. .

It was at the end of 2021 when Iberdrola, Endesa and Naturgy launched themselves to conquer customers covered by the regulated rate, taking advantage of the fact that they were contracting the rise in electricity prices in the wholesale market (pool). The campaigns of the large electric companies started at 58 euros per megawatt hour (MWh) and ensured stability for years. However, consumer organizations warned that strong price increases were being registered in the free market and called for “extreme caution”.

Before the energy crisis broke out in the summer of 2021, in the heat of the increase in the price of gas and CO2 emission rights, a customer using the regulated rate has been paying less for the electricity bill, according to published data. by the CNMC. Large companies have regularly promoted free market rates, which are more profitable for them than for consumers, and have taken advantage of the PVPC price escalation so that consumers leave behind that controlled rate in exchange for promises of savings, at least in the short and medium term.

It is true that with electricity totally skyrocketing after Russia’s invasion of Ukraine, the customer in the free market has won because they have agreed to a lower price than the wholesale market with their retailer. In addition, it has also benefited from the Government’s tax reduction.

However, the collapse in the price of electricity in recent days, thanks to the greater contribution of renewables to the generation mix, has caused the situation to turn around completely and consumers are at a loss when it comes to choosing tariff. In January it is expected that the electricity bill (regulated rate) will be the cheapest in the last two years, between 50 and 60 euros.

new regulated tariff

The European Commission (EC) imposed a review of the regulated tariff on Spain as a condition for approving the Iberian exception. The Executive intends to provide it with “greater stability” by introducing a price signal for forward products. It would thus be configured as a basket with reference to the market managed by OMIP, which includes a distribution of weights between the monthly, quarterly and annual product.

Competition has not been very satisfied with the Executive’s approach and considers that the savings will be nil for the consumer. “On average, it does not represent a significant gain in stability for this type of consumer,” he points out in his -non-binding- report on the Royal Decree project to modify the calculation methodology of the regulated electricity tariff.

Massive leak to the gas TUR

In the case of the Last Resort Tariff (TUR), a massive flight of customers from the free market is taking place after the Government has extended the limit of 15% gas price increase in each quarterly review until October 1 of this year. It has gained more than half a million subscribers in a year. The avalanche of requests for migration to the regulated gas tariff has been met with difficulties by the marketers, and has generated frustration among consumers who were unable to quickly contact the companies to change their contracts or, even, who suspected that they were to prevent their migration to a less profitable rate for them.

The four companies that by law can offer TUR -through their respective regulated marketers- are Naturgy, Iberdrola, Endesa and Total Energies. There are three different types of TUR for private consumers with different prices according to the contracted powers. The CNMC comparator shows that for an average household with a consumption of about 5,000 kilowatt hours (kWh) per year, the annual cost of the TUR is around 409 euros, compared to a price range on the free market. which varies between 800 and 1,300 euros, that is, up to 217% more in the worst case. Likewise, a specific TUR has been created for neighboring communities.

Puck Henry
Puck Henry
Puck Henry is an editor for ePrimefeed covering all types of news.
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