For electricity to be used, it must be produced and later transported and distributed to the consumer's premises. This route comprises various stages which define the value chain for the Electricity Sector: production, transmission, distribution and sales.
For each of the activities mentioned, ERSE determines the profit allowed in accordance with the methodologies of regulation defined in the Tariff Code.
The profit allowed gives rise to the electricity tariffs which are defined and published annually by ERSE, in accordance with what is established in the Tariff Code.
The various stakeholders in the Electricity Sector (consumers and electricity industry) are involved in the process for the approval of the tariffs and the Tariff Code.
- The tariff for the Global Use of System must provide profits for the Global System Management activity which includes costs for the operation of the system, costs arising from energy or environmental policy measures, or measures with a general economic interest, and costs from the maintenance of the contractual balance (CMEC).
- The tariff for the Use of Transmission Network must provide profits from the Electricity Transmission activity which includes the establishment, operation and maintenance of Very High Voltage (VHV) transmission networks and interconnections.
- The tariff for the Use of High Voltage (HV) and Medium Voltage (MV) Distribution Networks must provide profits from the regulated activities of distribution of HV and MV electricity which correspond to the planning, establishment, operation and maintenance of the distribution networks in a way which connects electricity from its points of reception to the end customers. Similarly, the tariff for the Use of LV Distribution Network allows for the recovery of profits from the regulated activity of Distribution of LV Electricity.
- The Energy tariff must cover permitted costs arising from the last resort supplier’s activity of Buying and Selling Electricity, which includes the costs of acquiring the electricity, supplying it to the clients, and related operating costs.
- The Retail Commercial tariff must provide profits for the regulated supply activity which includes the last resort supplier’s structure for selling electricity to its clients, namely contracting, invoicing and collecting payment for the electricity sold.
In this context, the planned tariff system is said to be additive because for each regulated activity there is an associated regulated tariff and the final sales tariff applicable to each client is composed of a sum of the various activity tariffs which are attributable to this client's supply.
The Networks Access tariffs (portuguese version), which includes the tariffs for the Global Use of System, the Use of Transmission Network and the Use of Distribution Network are paid by each electricity consumer in the Regulated and Free Market, and are included in the sales tariffs of the various suppliers, its value being listed in the electricity bill that the client receives from their supplier. These tariffs are approved and published annually by ERSE.
The End User Tariffs (portuguese version) from the last resort supplier are obtained by adding the prices of the Networks Access tariffs to the prices for the Energy tariffs and the Retail Commercial tariff, and are only applied to Regulated Market consumers. These tariffs are approved and published annually by ERSE.
The End User Tariffs for Very High Voltage, High Voltage, Medium Voltage and Low Voltage Special (> 41,4 kW) were extinct in September 29th 2010, by the Decree-Law no. 104/2010.
The prices practised in the Free Market (portuguese) are determined by each supplier and negotiated individually with each client.