Enjoy “free” electricity while you can

There are thousands of Portuguese who are save hundreds of euros since the end of last year simply because they decided to risk switching to an indexed electricity tariff. I already told you about this extraordinary form of savings in the January column. Five months later, I’m telling you again that if it hasn’t changed, it probably already saved about 500 euros or more (depending on your consumption). The good news is that there is still time to take advantage of these savings, as long as you realize that, with each passing month, this savings will become smaller until it runs out, we just don’t know if this year or the next. Unfortunately, as consumers, we still have a lot to learn. We seem to be wedded to electricity companies, banks, insurance companies, etc. Those who have this attitude usually lose because they miss the opportunities that the competition offers. There is always someone willing to offer you what you want at the best price. But you have to search and change.In recent months, the difference between the cheapest tariff and the regulated market price (SU Electricity) in some of the last months reached 80 and 90%. There are people who were paying 100 euros or more a month and who paid 5, 10 or 15 euros.

What are indexed electricity tariffs?

At the moment, indexed electricity tariffs remain the best on the market. For those who don’t know, indexed electricity tariffs are those in which you pay for electricity at the “factory price” (originally – it’s called OMIE – where all suppliers buy it to sell it to you) and pay a small margin of profit to that supplier. What is the risk you run? Is that, if electricity suddenly rises in price at the source, that month you will pay a lot; but if the electricity drops a lot, you will also save a lot. In April, the price was about half a cent per kWh. In the regulated market it is 16 cents. The MIBEL adjustment mechanism (which adds to this price) has also been at zero for several months. Therefore, the risk of these rises at this time is reduced. Also read: Nobody gets rich by saving

Pay attention and pay attention

Most Portuguese like to know what they have and hate surprises, so they usually prefer to pay more, but have the guarantee of knowing what will happen. But what I want to draw your attention to in this chronicle is that information is the key to good financial management of your personal finances. You can find out weekly (using the omie.es page) the price of electricity in real time. As soon as rise to more than €150 or €180 per MWh (average of the last 15 days) might start thinking about leaving. As you can see, if you pay attention, the risk of getting a very high bill is almost zero. You should also realize that, in July, ERSE already announced that it will reduce the “discount” it is giving from -9.5 cents per kWh to network access tariffs. But this is for all companies, with fixed and/or indexed tariffs. Therefore, the savings will be less, but it will be less for everyone. You shouldn’t see this as a problem with indexed tariffs. On the other hand, in the summer, with empty dams, it’s also normal – and it happens every year – the price at OMIE will go up and then go down again, if what usually happens happen annually. Therefore, either take advantage now, or miss a good savings opportunity.If you save 60 euros a month, for 10 months, 600 euros are left in your pocket and can help you pay, for example, the 100 euros increase in your house payment for half a year. To find companies that have indexed tariffs, use the ERSE simulator or search Google for “indexed electricity tariffs”, contact the companies and compare the kWh price you are paying with the prices they offer you. Those who do nothing will pay the same as they are paying now and will complain that the money is not enough for what they need. Often, part of the blame lies with us because of our unfounded fears and inertia. Obviously, if you subscribe to one of these tariffs you must be permanently on the lookout to get out before prices stop clearing. If you are willing to do this “job” you can save hundreds of euros this year. With an attitude on your part, you can increase yourself much more than with State support, which is not even for everyone. These “discounts” are for everyone. Just change your electricity company. If you’re still scared, don’t do anything. But you lose.Read more: How to make the most of zero VAT on purchases Pedro Andersson was born in 1973 and fell in love with journalism as a teenager, at Rádio Clube da Covilhã. He graduated in Social Communication at the University of Beira Interior, and began his professional career at TSF. In 2000, he was invited to be one of the founding journalists of SIC Notícias. Currently, he continues at SIC, as a coordinating journalist, and has been responsible since 2011 for the heading “Contas-Poupança”, dedicated to personal finances. He tries to bring the reality of everyday life to the reports he makes. The information contained in the article is not binding and does not invalidate the full reading of documents that support the matter in question.