When we receive our electricity bill, the first thing we usually look at is how much we’ve used and how much each kWh costs. However, there’s another charge we don’t always pay attention to—one we pay every month, even when we’re hardly ever home: the contracted power.
Reviewing it can help you lower your bill without having to change your usage habits. We’ll explain what it is, how to tell if you have more power than you need, and what you should keep in mind before changing it.
What is contracted power, and why do you pay for it every month?
Your contracted power, measured in kilowatts (kW), determines how many electrical appliances you can use at the same time without exceeding your service limit.
Unlike electricity consumption, which depends on the amount of energy you use, power has a fixed cost. In other words, you pay for it every day, whether you’re at home using appliances or away on vacation.
For example, if you have the oven, washing machine, and air conditioner running at the same time, they all draw a portion of the available power. If the total exceeds your contracted capacity, a power outage may occur.
That’s why it’s important to choose the right power rating: you need enough to use your appliances comfortably, but there’s no point in paying for capacity you won’t use.
How much do you pay for your contracted power?
Although it depends on the rate plan and the characteristics of each home, the power charge can account for a significant portion of the electricity bill. Some estimates put its share at between 20% and 40%, and even higher in certain cases.
This means that, even if you manage to reduce your electricity usage, part of your bill will remain the same as long as you keep your contracted power at the same level.
In addition, the cost includes regulated charges related to the use of the electric grid, such as access tolls.
That’s why, if you want to pay less for electricity, it’s not enough to just turn off the lights or use your appliances more efficiently. You should also check whether the power capacity you’ve signed up for matches your actual needs.
What if you’re paying for more power than you need?
It’s quite common to sign up for a power plan with some leeway to prevent the circuit breaker from tripping when you use multiple appliances at the same time. It’s also possible that you’re sticking with the power plan the home had before you moved in, without knowing if it’s the right one for you.
Over time, your needs may have changed. Perhaps there are fewer people living in your home now, you’ve replaced some appliances with more efficient models, or you’ve simply never reviewed this aspect of your contract.
In any of these cases, it’s worth checking to see if you can adjust your power usage and save on your bill.
Of course, the goal isn’t to choose the lowest possible wattage, but rather to find a balance between saving money and the convenience of using your appliances without any problems.
How to Determine How Much Power You Need at Home
Before requesting a change, it’s best to check your usage data. There are two easy ways to do this:
1. Check your electricity bill.
There, you’ll find the power capacity you’ve contracted for each period. Some electricity suppliers also display information about the maximum power you’ve used.
2. Access your electricity provider’s information.
On their website, you can find more detailed information about your electricity service, including peak power demand and hourly consumption.
With this information, you’ll be able to get a clearer picture of your needs. For example, if you never come close to using the amount of power you’ve signed up for during the months of highest consumption, you might be able to reduce your plan.
It’s important to pay special attention to the winter months or times of year when you use your HVAC system the most. It wouldn’t make much sense to reduce the capacity based solely on your summer needs.
How much does it cost to replace it?
There is a significant asymmetry here:
- Lowering your power rating is inexpensive. It costs about 9 euros, regardless of how much you lower it.
- It’s more expensive to increase it. You have to pay access, extension, and connection fees, and the final cost depends on how many kW you’re adding. selectra
That’s why it’s a good idea to think it through carefully. Lowering it too much may force you to raise it again in a few months. In addition, one electricity provider notes that you can only change your power rating once every 12 months.
Common Mistakes
- Go downstairs without worrying about the temperature. If you’re planning to install an air-source heat pump, an electric car, or an induction cooktop, your needs will change.
- Just look at summer. Consumption typically peaks in the winter.
- Reach the trough period. Reducing power during off-peak hours is not recommended, because the annual cost is very low—around 4 euros per kW.
- Expect temporary changes. The new supply rules provide for temporary changes in capacity by month, day, or hour, but they will only take effect once the CNMC determines how much they will increase the capacity charge. For now, this is not an option.
Checking your contracted power capacity takes ten minutes and can reduce a recurring annual cost. This isn’t a decision to make blindly: it’s a good idea to look at your actual usage data and consider future changes, such as new appliances or an electric heating and cooling system.
