Revolution in Electricity Bills Came with High Rate of Increase

The gradual electricity tariff, which has been on the agenda for a while and concerns all citizens, entered into force with the decision published in the last Official Gazette of 2021. Electricity bills of more than 38 million households will be directly affected by the gradual electricity tariff implementation.

Electricity suppliers comparison site encazip.com conveyed the details of the gradual electricity tariff and how the increase rates ranging from 50 percent to 127 percent will be reflected on electricity bills. According to the electricity tariffs effective as of January 1, electricity prices for consumers who have not changed their electricity suppliers increased by 127 percent at workplaces and between 49,6 percent and 125 percent at homes. The rate of increase that the houses will feel will change according to consumption. The electricity suppliers comparison site encazip.com explained the electricity price hikes and the details of the new gradual electricity tariff system to be implemented for homes.

Those who pay a monthly bill of 137 TL will now pay 205 TL

Electricity costs increased by 2021 percent compared to the beginning of 141, but this cost increase was not reflected to consumers for a long time. A gradual electricity tariff was implemented as of January 1, in order to keep consumers less affected by the increase in costs and to encourage savings in household electricity consumption. According to this application, all consumers will be billed at the low-level tariff unit price until the consumption corresponding to the electricity bill amount of 137 TL last December. For consumption above this amount, a high-level tariff unit price will be applied. Low-level electricity unit price will be 49,6 percent higher than last month's prices, and high-level electricity unit price will be 125 percent higher. Accordingly, the entire consumption of consumers who paid 137 TL bills last month will be at a low level and the electricity bill of these consumers will be 205 TL in January.

What is the gradual electricity tariff?

The gradual electricity tariff will ensure that household electricity consumption up to a monthly consumption of 150kWh will be billed at the low level unit price, and consumptions exceeding this consumption will be billed at the high level unit price. In the first quarter period covering January, February and March of 2022, consumption up to 38 kWh for 150 million households will be invoiced at 1,37 TL per kilowatt-hour, including taxes, and the unit price for each kilowatt-hour consumption above this will be 2,06 TL. This application came into effect as of January 38 for more than 1 million households in the low voltage residential subscriber group.

The limit is 205 TL, the bill will hurt if you consume more than that.

While the electricity bills of the low-level consumers will increase by 49,6 percent, the high unit price for the consumers who exceed the limit will be applied only for the consumption that exceeds the limit. While the low consumption portion of the next bill of a household consumer who paid a bill of 500 TL last December will be 205 TL in January, the bill for the remaining part in the high consumption level will be 815 TL, and the invoice that was 500 TL in December will be 1020 TL in January.

Changing suppliers will become possible again

Due to the fact that electricity costs remained above the national tariff unit price for a long time, the dynamics of the free market did not work enough, and the practice of switching electricity suppliers, known as the free consumer practice, was blocked. Due to the failure of free market dynamics, the increasing electricity costs were burdened by the state and eventually came out of the pocket of the citizens indirectly. In this process, the number of supplier changes, which approached 5 million, fell to the level of 100 thousand, and with the decrease, the burden on the taxes paid by the state, actually citizens, increased. With the new application, it will be possible to change electricity suppliers for consumers in all subscriber groups, including homes, and with the good functioning of market dynamics, there will be a decrease in electricity costs and electricity bills paid by consumers in the medium term.

TRT Share removed from invoices

Another radical change in electricity bills was the removal of the TRT share. Only 100 TL of a 1 TL electricity bill corresponded to the TRT share, but the collection of TRT share from the electricity bills was met with public reaction. The removal of the controversial application as of January is seen as symbolically important.

Electricity bills will decrease with the work of free market dynamics

Evaluating the new gradual electricity tariff application and electricity hikes, Çağada Kırmızı, the founder of encazip.com, underlined that the electricity market is now privatized and is a free market, and stated that the winners of the re-establishment of the competitive market structure will be consumers. Emphasizing that the phrase electricity hike is a jargon left over from the monopoly structure, Krim continued as follows: “In 2001, liberalization began in the electricity market and today, almost all of the market has been liberalized. Now electricity producers sell the energy they produce in the market where the prices are freely determined, that is, the costs are determined in the free market. In a market where costs are freely determined, it is not possible to determine consumer prices by the state. However, especially since 2018, consumer electricity prices have been kept low, but this has not been sustainable. It is true that electricity bills have increased a lot, and similar increases have been experienced in all European countries. However, as a society, we should understand that the electricity market is liberalized and accept that the electricity price hikes are not made by the state. Because price determinations in the electricity market are very different from the mechanism of determining bridge tolls, for example. As a result, we are currently experiencing that the impact of cost-based price changes on electricity prices that are not made on time due to the hesitation of public reaction to the consumer is much greater.”