A scheme to produce low-cost electricity is costing Portuguese consumers €1 each per month, an unwanted €50 million-a-year added to electricity bills.
Companies responsible for producing electricty from Portugal's dams, buy subsidised 'wind power' electricity produced at night, for almost nothing. This is used to pump water from rivers back into the reservoirs.
Pumped at night at the low night-time rate, this water is released during the day to drive turbines to produce electricity which is charged out at the far higher daytime rate.
An apparently unknowing Secretary of State for Energy, Jorge Seguro Sanches, has said that this is an "inadmissible practice" and instead of acting, has asked for an "assessment of this situation" of the Energy Services Regulatory Authority.
According to Sanches' request to the energy supervisor, this ‘low cost-high cost’ combination "may lead to the same company selling energy at values well above the market price having acquiring it at or near zero price, fully financed by consumers." In this respect, Sanches perfectly has outlined what is going on.
The most unusual aspect of this scenario is that the Secretary of State gives every indication of being unaware that it was going on when everyone in the industry is well aware of this long-running consumer rip-off in an industry notable for government collusion in many aspects of its charging policies.
Certainly, the Energy Services Regulatory Authority is well aware of the practice and by allowing it, condones it as a legitimate way of allowing energy companeis to screw consumers yet further.
