Regulated or free gas tariff: How to change it
Rocío Martínez
6 min read
·
September 7, 2023
[Article updated in October 2024]
If you're looking to save on your gas bill, you've probably considered switching to a regulated rate or the free market. Making the right decision between the two options is key to reduce your business expenses.
In this article, we explain the differences between the regulated market and the free market, and how to make the change of Gas rate in a simple way to maximize your savings.
Types of gas tariffs
There are two types of gas rates: the rates of the regulated market and the rates of the Free market. The main difference between them lies in who sets the price and how these rates are updated.
Free market
In the free market, gas rates are set by the trading companies themselves. This type of rate allows companies to offer personalized pricing, discounts, or additional promotions.
Advantages of the free market:
- Personalized offers and flexibility.
- Possibility of additional services such as maintenance.
Disadvantages of the free market:
- Prices may be higher compared to the regulated rate.
- Less transparency about how the price is set.
Regulated market
In the regulated market, rates are set by the government through the Last Resort Fee (TUR). This system guarantees more stable and transparent pricing, with updates every quarter. It's a very attractive option for those looking for security and significant savings on their bill.
Currently, there are four retailers that offer the TUR for gas: Gas & Power Regulated Trading Company, Curenergía, Baser COR, Energy XXI.
Advantages of the regulated market:
- Price set by the government.
- Transparency and control over updates.
- In general, it's usually cheaper than the free market.
Disadvantages of the regulated market:
- Less flexibility in contracts.
- It does not include additional services such as maintenance.
Which gas rate is best? Differences
When you wonder if it's better the free or regulated gas market, you must take into account several factors such as your consumption, price stability and whether you value having additional services or a lower price more. Here are the main differences:
So what is the best gas rate?
If you're looking to save on your gas bill, the regulated rate (TUR) is usually the best option, especially in periods of price volatility. However, if you prefer to have additional service options or customize your contract, the free market may offer you greater flexibility.
Therefore, Is the regulated rate (TUR) or a free market offer better? Currently, the Rate of Last Resort (TUR) remains, in most cases, the most affordable option available.
Although there are occasional exceptions, TUR is usually the best option for most homes. By comparing the rates available on the free market with the regulated TUR rate, it is estimated that users who opt for the TUR can save up to 15% on your annual gas bills. This translates into a savings of more than 100 euros per year for an average household with a consumption of 9,000 kWh. These savings can be even more significant for households with higher consumption.
For their part, homeowners' communities, in particular, should pay special attention to their contracted gas rates. Accessing the TUR regulated rate can mean significant savings in the gas bill in these communities, where consumption is usually much higher than that of an individual home. Revising and changing the TUR rate can be a strategic decision to reduce heating and hot water costs in shared buildings.
If, in addition, you want to know more about how to save up to 40% on electricity, we have a guide for companies on how to save on electricity costs.
The need for greater transparency in gas rates
A key aspect for consumers is transparency in rate information. Users must have clear access to prices and know how much they are going to pay for a service as basic as gas. In this regard, marketers have a responsibility to comply with certain reporting obligations.
From associations such as Consumer and User Organization (OCU) Marketers are required to:
- Make all your rates public, including those that are no longer contractable, so that consumers can compare options in a clear and transparent manner.
- Improve communication with customers, informing more clearly about prices and providing clear estimates of the invoices that users will receive.
- Permanently reduce VAT on gas and electricity, a measure that was temporarily implemented, but which should become something definitive to alleviate consumers' energy costs.
With these measures, it seeks not only to allow users to choose the best option for their needs, but also to avoid surprises in bills and to ensure that gas companies act clearly and honestly.
How to change the gas rate
The process to switch from a free market rate to a regulated rate may seem complicated, but following the right steps can be done in a simple way. Below, we break down the steps to follow to change the rate and achieve significant savings in gas supply costs:
1. Understanding the Regulated Rate
The first thing is to know if you are in the free market or the regulated one. You can see this on your gas bill. Second, and before taking any action, it is essential to understand what the regulated gas rate is.
As we said, this rate is set by the government and is usually cheaper than free market rates. For many homeowners, switching to the regulated rate is the first option to reduce supply costs.
2. Review your current contracts
The next step is to review your current contracts with the gas supply company. Make sure you know the expiration date of the contracts and any cancellation clauses. This is crucial, as changing before contracts expire could result in penalties.
If you are thinking of switching to the TUR, you can check the current prices on the website of the National Commission on Markets and Competition (CNMC).
3. Get relevant information
Research the current regulated rates in your area and compare them to the current rates of your apartments. You can obtain this information online or by contacting the gas regulator in your region. Make sure you get the latest details to make an informed decision.
At Polaroo, we have a team of experts dedicated to carrying out recurring optimization studies, and researching the different options available in the market, in order to provide each property with up-to-date information on rates and current market status. Objective? That the expenses for this gas supply to your properties are not affected by lack of information, and save you management and administration time in this regard.
4. Contact your gas supplier
Contact your current gas company to notify them of your intention to switch to the regulated rate. Ask about the specific procedure they should follow and what the deadlines are involved. Often, this involves submitting a written request.
5. Required Documentation
Prepare the necessary documentation for the change, which usually includes copies of your current bill, your identification, and the request to change to the regulated rate. Make sure you fill out all the forms correctly and attach the requested information.
If you have a contract in the free market, check if there are penalties for breaking the contract early. This will help you avoid surprises.
6. Confirmation of the change
Once you have submitted all the documentation, wait for confirmation from your gas company. This may take some time. Make sure you keep paying your bills during this process to avoid power outages.
According to Facua-Consumers in Action, There is a 28-day limit to activate the service and be on the regulated rate. If they exceed this time, you could claim damages.
7. Enjoy the benefits
Once you have completed the process of changing to the regulated rate, you can enjoy the benefits of cheaper and more adapted rates. Continue to review your bills to ensure that the regulated rates are being applied correctly.
Gas Fee FAQs
How to interpret the gas bill?
The gas bill includes mandatory information that allows us to understand the billed concepts. Some of the key elements are:
- Data of the owner and address of the supply: Identifies the supply point and the owner.
- Billing period: Usually, every two months, but it may vary.
- Invoice number and date of issue: Useful for making claims.
- CUPS: Unique code that identifies your installation.
- Meter readings: Report actual or estimated consumption.
- Fixed and variable term: Indicates the daily cost of supply and consumption in kWh.
- Additional Taxes and Fees: Includes hydrocarbon tax, VAT and other possible concepts such as meter rental or inspections.
This breakdown helps you identify where variations in cost may occur and to track your consumption.
What are indexed gas rates?
Indexed gas rates operate on the free market and offer variable prices based on the wholesale market. Its main characteristic is that the cost of gas is updated daily according to indices such as MIBGAS or TTF, which better reflects market fluctuations.
This type of rate allows flexibility, without commitment to permanence, and can result in more competitive prices, although it also involves being aware of daily market changes.
How do I know if I have a regulated or free rate?
To find out if you have a regulated or free rate, check the contract name on your gas bill. Regulated rates are identified as “TUR” (Tariff of Last Resort) in gas supply (PVPC, Voluntary Price for Small Consumers, in electricity). Free market rates usually bear the name of the trading company and the contracted offer. If you're still not sure, you can contact your gas supplier and ask directly.
