We are used to receiving at home electricity bill, but do we really know what is all that in it? With this article you will understand better.

The electricity bill is the document that send the supply company to customers every month or every two months and it shows the electricity consumption for a period of time.

In the energy bill you can see the amount the user has to pay for the contracted supply and consumption by tariff, for a period, which can be monthly or bimonthly. It shows three different concepts:

• The amount of consumption and power term to the supply company.
• The rental of the electricity meter to the distributor.
• The electricity tax and value added tax (VAT) to the government.

 Power term

The power term is the amount of kilowatts (kW) contracted by the user and the price agreed between the supply company and the consumer. It is a fixed part of the bill because you have to pay it every month, whether the consumption. It is calculated as follows:

Electrical power (kW) * billing period * price set by the supply company

Consumption term

It measures the amount of kilowatt hours (kWh) that has been spent.

This is the variable part of the bill because not every month you consume the same. It is calculated as follows:

Consumption (kWh) * Cost marked by the supply company

The rental of the electricity meter

If the electricity meter is not owned, you have to pay a rent which is about one euro and it is paid to the distributor in the area.

The advantage of rental electrical meter is the distribution company is responsible for its maintenance, repair or replacement if there is a problem.

Taxes

Taxes including on the electricity bills are independent of the supply company and are applied by the Ministry of Industry. Currently there are two rates:

• Tax on Electricity, which is applied to the power term plus the consumption term.

(Power term + consumption term) * 4.84% * 1.05113

• Value Added Tax (VAT), currently 21%, which is applied on the final value of the entire bill.

Many people believe that the cost of the bill is unfair and inconsistent with the consumption. Therefore, it is important to try to save energy to decrease this major expense.

• Compare different electricity rates and choose the one that best suits your needs.
• Reduce the contracted power term if it is above your usual consumption.
• Try to save on your daily consumption paying special attention to the climate control at home, lighting, and using appliances.

In coming weeks we will give more tips to optimize your electricity consumption.

What do you think about the Spanish electricity bill? Share your thoughts with us.