In the first quarter of 2014, power costs for domestic customers such as homes and small businesses fell 25% year-to-year. This is the outcome of a plan to fix power bills starting in January of this year.
In total, consumers who chose this plan have saved around 850 million collectively on their power bills. The system's billing reform gave them a chance to choose between paying on the free market, a fixed rate or the new PVPC tariff. The PVPC replaces quarterly Cesur auctions with a new method designed around smart meters, which calculate the price of power usage each hour using a combination of the results of the Omie day-ahead and intraday wholesale auctions, known as the pool. The PVPC option could end up costing consumers 20% more to lock in prices.
Also, fixed prices will not let consumers benefit from lower costs when production ramps up, which happened this year when wind energy output was high, sending prices lower. While the tariffs are going up overall, now customers have the choice to adapt and reduce their consumption based on economic realities. Falling power bill costs will help small companies survive by lowering their operating costs when their overall outlook is still hazy. Overall, relaxing trade restrictions will provide lower prices that match the true costs of producing energy. And this is a good thing.