System charges: a guide to the costs on your bill
System charges: a guide to the costs on your bill
Reading and analysing power and gas bills are essential to better understand consumption-related expenses and optimise costs. Every bill shows a breakdown of the expenses, classified according to different items. In addition to energy and natural gas costs (which include costs for raw materials, marketing and sales), there are network services (which include costs for transport, distribution and meter operation), taxes and system charges.
System charges represent the share of the expenses in the bill intended to cover the costs of activities of general interest for the electricity and gas systems. These amounts, set by ARERA (Energy, Networks and Environment Regulatory Authority), do not depend on the supplier or the type of contract chosen. Knowing how to read and interpret system charges gives you a complete overview of the total costs in your bill, allowing you to consciously manage your expenses.
Introduction to system charges
System charges are costs linked to financing works and activities that are useful to the community and are found in all types of bills, whether household bills for residential and non-residential customers or bills for companies and public bodies. These are standing charges paid by all consumers, regardless of the market regime they join (free or protected market) and they differ according to the type of utility (power or gas). Most of the system charges cover the financing of renewables, but these funds are also used to support households with financial hardships and to develop energy efficiency and heating services.
Power system charges include:
Support for renewable energies with incentives for the development of renewable and assimilated sources
Contributions to the railway sector with tariff concessions
Research support with funds for energy innovation projects
Social bonus with coverage of the social electricity bonus (not paid by customers who have been granted the social power bonus).
Concessions for energy-intensive enterprises
Support for small businesses and promotion of energy efficiency.
Gas system charges include:
Energy saving projects with funds for initiatives that reduce energy consumption (RE component)
Compensation of sales costs to cover retail supply management costs (UG2 component)
Reimbursement for arrears to suppliers guaranteeing essential services even in the case of insolvent customers (UG3)
Social bonus for gas (GS component), paid only by apartment blocks for domestic use.
Support for renewable energies in the gas sector.
Development of district heating networks to realise efficient systems that distribute centralised heat.
How much do system charges affect the bill?
System charges represent a significant part of the expenses in the bill, the incidence of which on the overall cost may vary depending on the type of utility (power or gas) and supply (household or business) and on the requirement at the time to cover the charges. Generally, these tariffs are reviewed every quarter and in the power bill, the costs for system charges cover about 20 per cent of the total for a household and 30 per cent for a company, while in the gas bill it corresponds to about 5 per cent of the total for a household and 10 per cent for a company.
How to save on power and gas costs
System charges are set by national regulations and do not depend on the type of supply or contract chosen. However, some small daily choices to reduce gas consumption and save on energy consumption can help you keep costs down and optimise your spending. Having an overview of system charges can also be very useful to better understand your energy and gas needs and to choose the most suitable offer for your needs.
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