The Energy Regulatory Authority (RAAEU) has proposed the addition of a new category, marked with a red color code, as part of an initiative put forward for public consultation. This concerns flexible electricity pricing models that are not tied in any way to fluctuations in the wholesale market. Instead, the supply charge includes a predefined element known as the ‘flexible component,’ which can vary due to factors outside the supplier’s control—such as consumption levels.
Under the current framework, three types of tariffs are available in the market: fixed (blue), variable (yellow and green, including dynamic ones announced monthly), and dynamic (orange, for consumers with smart meters). The proposal was prompted by Protergia’s ‘Picasso’ bill model, which provides a fixed single charge for energy and regulated costs (networks, etc.) depending on consumption levels.
According to RAAEU, flexible tariffs may include: tiered pricing based on consumption levels, such as a fixed daily or monthly supply fee per kilowatt-hour, applied throughout the contract duration; fixed charges over six-month periods within a yearly contract; or tiered rates combined with additional fees for consumption beyond defined limits.
Key features of these flexible bills include a minimum contract period of twelve months, possible proportional early termination fees, and optional discounts detailed in the contract terms. Additionally, the flexible element can also differentiate prices based on off-peak hours.