Electricity: Free market or regulated? How to know which is most advantageous

A Regulating Entity of Energy Services (ERSE) announced that the average monthly electricity bill of most domestic customers in the regulated market will increase about 2.7%: After all, what is the difference between the regulated and liberalised markets? How do you know which is more advantageous? 

“ How do I know if it is advantageous to adhere to the regulated tariff? You can always make one simulation on the ERSE website to find out which offer is most competitive. However, the invoice of the marketer also includes information on the difference between the value submitted to payment and the amount that the customer would pay if he had contracted the tariff equal to the regulated market rate. Thus, you can see if you are paying more than if you had a regulated fare“, explains the regulator of the sector in its site. 

Regulated or liberalised electricity market: Which is better for you?

The choice between regulated or free market “will always depend on the consumption profile, the contracted power you need, the consumption periods and predictability you want”, but “there are several differences between the two markets“, the DECO PROTEST explained.

No regulated market, “electricity prices are set annually by the Energy Services Regulatory Authority”, and “there is the possibility of quarterly review, but it has not been common”.

“ It may be a good option for consumers who value price stability or who do not follow price developments on the invoice. When changed, the tariff is the same for all customers, whether current or new”, explains DECO PROTeste. 

On the other hand liberalised market “marketers set prices and contractual conditions freely”, which “means that prices may vary more frequently, with competitive offers”.

And more: “There is the possibility of offering discounts or other associated benefits.”.

“ Over time, price conditions are changing. It is therefore appropriate to consult the invoice to verify whether the initial economic advantages remain. All invoices indicate how much more or less you would pay if you switched to a regulated market rate and maintained the same consumption profile. If you are paying too much, the fare you have may no longer be the best option,” explains the consumer protection organisation. 

How to switch to the regulated tariff?

ERSE explains that “free market suppliers shall disclose whether or not the scheme assimilated to the regulated market rate is available“.

“ A customer who wants a similar rate should ask his supplier if he has this option or not. The answer must be given in ten working days and, if it is negative, must be communicated in writing, becoming sufficient for the client, wanting, to conclude a contract with the last resort vendor ", can be read on the ERSE website.