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Bills designed by fools

The Spanish rate system is as difficult to understand as the documents utility companies send to their customers

Whenever the Organisation for Economic Co-operation and Development (OECD) includes a question about understanding an electricity bill on its general adult cultural level tests, you can bet that Spain will end up on the bottom of the list. This does not mean we are that bad at math, but rather that our electricity bills are not only the most expensive in Europe (according to Eurostat data) but are also very difficult to understand.

In interviews, highly intelligent people always find a way to answer the most complex questions in a simple manner, while the person who gets tied up in incomprehensible phrases is probably a fool with an insufficient understanding of what he is talking about - or a crook trying to swindle you.

I doubt that the people behind our electricity bills are fools, but something is wrong when the average Spaniard cannot understand the data included on them. The price of electricity has risen by 88 percent since 2006 (Eurostat data again), and by 3.5 percent so far this year.

Something is wrong when the average Spaniard cannot understand the data included on their electricity bill

It may be that the average Spaniard's ability with numbers leaves a lot to be desired, but social service cuts and price rises in every area of basic necessities are sharpening consumer awareness.

The Spanish rate system is as difficult to understand as the bills they send to the consumer. In 2000 the major power companies obtained then-Prime Minister José María Aznar's recognition that the rates they charge are lower than the costs they claim to incur. The result is that, since that time, the Spanish consumer is supposed to be in debt to the electric companies, in spite of paying so much. In 13 years, this so-called "tariff deficit" has risen to the point where it now exceeds 26 billion euros. Unless someone can explain this in a simple manner, it seems very strange. If the power companies sell their product below cost, they ought to be going bankrupt. However, their profits are enormous. One example: in the first half of this year, Iberdrola made 1.728 billion euros.

The EU - and thus Spain - is officially committed to reducing carbon dioxide emissions and promoting renewables. However, the Spanish government has now reduced subsidies for renewable energies, and has passed a decree on self-supply that ruins those who installed solar farms. Thanks to this measure, owners of solar panels must pay the same or more than a consumer of conventional electric power, and such excess power as they may inject into the grid will not be taken into account. The so-called "backup toll" demolishes the expectation of saving money on rates.

The situation is an irritating one. The government defends the power companies, saying it is aware of the sector's "complex economic situation," as if other sectors were swimming in money. There is money for almost nothing, but it lately approved a 2.2-billion-euro loan to reduce the "tariff deficit." Fourteen renewable energy associations have denounced the big Spanish power firms before the EU on the grounds that they are trying to ruin green energy.

But Spanish society is reacting. Another campaign is now underway, in order to bring down the price of the fixed rate for electricity. This is where the government has introduced its latest price rise - a quite incomprehensible move given that it does not encourage energy savings. It doesn't matter how much power you use, your bill will still rise.

With this new campaign, consumers hope to save money, but also to protest against this wall that has been erected by the politicians and the privatized suppliers of basic services. Perhaps, in passing, it is not too much to ask that they modify their electricity bills. Since they are not fools, one suspects that behind so much opacity a calculated will to keep us paying in excess for something we don't understand is lurking.