A typical PVPC electricity bill reached €77.84 for July. Credit: Tanyarico / Shutterstock
The 17 per cent rise assumes a household used exactly the same amount of electricity as in June. After weeks of keeping homes cool, some regulated-tariff customers may find the real increase is steeper, while fixed-price customers could be protected for now.
A typical default tariff bill rises from €66.63 to €77.84
A typical household on Spain’s regulated electricity tariff faces an extra €11.21 for July, even before any increase in consumption is taken into account. The Organisation of Consumers and Users (OCU) calculated that a home with 4.6 kilowatts of contracted power and monthly consumption of 292 kilowatt hours would pay €77.84 for July. The same household and consumption produced a lesser €66.63 bill in June. That represents a 16.8 per cent rise caused by changes in electricity prices, before the home even uses more power.
Actual bills will vary according to consumption, contracted power and tariff. But anyone who ran air conditioning more frequently during July’s extreme heat could therefore pay considerably more than the already risen figures.
The calculation applies specifically to the Precio Voluntario para el Pequeño Consumidor (PVPC), Spain’s regulated electricity tariff. The latest published market review from Spain’s energy regulator found that approximately 8.4 million customers, or 28.5 per cent of the total, were still on PVPC at the end of 2024.
Why July electricity suddenly became more expensive
OCU said Spain’s average wholesale electricity price climbed 51 per cent during July to €104.75 per megawatt hour, its highest monthly level since February 2025. The consumer organisation attributed much of the rise to uncertainty surrounding gas supplies during the continuing Middle East crisis. Gas-fired power plants still help set Spain’s electricity price during many hours when renewable generation cannot meet demand. Summer conditions also added further pressure. High temperatures increased demand as cooling systems were switched on, while extreme heat can reduce the efficiency of solar panels. That meant greater reliance on gas-fired combined-cycle plants during some periods.
The rise could have been sharper for PVPC customers. Under the tariff’s revised formula, 45 per cent of its energy-cost calculation is linked to the daily wholesale market, while the remaining 55 per cent comes from more stable futures-market references. That system was introduced to make the regulated tariff less vulnerable to sudden wholesale price swings. In July, however, it softened rather than prevented the increase.
Could an August tax relief soften the increase?
Spain’s June emergency legislation included a mechanism that could have reduced electricity VAT to 10 per cent and the Special Electricity Tax to 0.5 per cent during August. However, the rules published in Spain’s Official State Gazette required the annual electricity component of the Consumer Price Index for June to rise by more than 15 per cent before those reductions could be activated. That threshold was not reached. OCU said electricity bills issued during August will therefore retain the usual tax rates, including 21 per cent VAT and the standard Special Electricity Tax of approximately 5.11 per cent.
The absence of the reduction did not create the 16.8 per cent market-driven increase. It means the conditional tax relief will not cushion households against it.
PVPC and indexed customers face the greatest exposure
Customers on PVPC and free-market tariffs directly linked to wholesale prices are the most exposed to the latest increase. A genuine fixed-price free-market contract should not experience the same immediate rate change. The National Commission for Markets and Competition (CNMC) says suppliers cannot alter an agreed fixed price before the contract expires. However, higher consumption will still produce a larger bill, and new prices may apply when a contract is renewed.
Customers should be able to view their tariff type on their electricity bill. PVPC customers are supplied by a comercializadora de referencia, or reference supplier, while free-market contracts normally name the particular commercial tariff.
This distinction is not widely understood and should be checked carefully. A CNMC household survey found that 52.2 per cent of homes did not know the difference between the regulated and free electricity markets. A useful tool for residents is the CNMC’s official Entiende tu factura platform, accessible through the QR code on many electricity bills, and can identify the supplier, tariff type and contract expiry date.
The next tax checkpoint to look out for will be in September
The government’s tax safeguard will be assessed again in August using July’s electricity inflation figure. If that component has risen by more than 15 per cent year on year, qualifying supplies could receive 10 per cent VAT and the reduced electricity tax during September. Otherwise, customers can expect the standard rates to continue.
Until then, the important figure to watch out for on each bill is the tariff rather than the national average. The €77.84 calculation is a regulated-tariff example based on unchanged consumption, and homes that used more electricity to keep cool during the recent heatwaves may find the final amount is higher.