Portugal's electricity market regulator ERSE has approved a 1.9% increase in regulated tariffs that affect about a million households and businesses and indirectly influence prices practiced by utilities, from January, it said on Tuesday.

The modest increase, which ERSE is yet to confirm after consulting consumers, companies and other groups, is below the government inflation forecast for next year of 3.3%.

ERSE said in a statement it expected "prices in the wholesale electricity market (MIBEL) to be lower than those recorded in 2023", but saw an increase in grid access rates that are paid by all consumers and which in the last two years had a negative value.

MIBEL futures contracts for 2024 traded on Monday at 121.87 euros per megawatt-hour (MWh), compared to around 107.8 euros currently.

The limited regulated price increase in 2024 helps around 947,000 Portuguese consumers with contracts based on the price, mainly households and small businesses, ERSE said.

They represent 6.4% of the total electricity consumption in the country, but since Portuguese households and small businesses can move freely between contracts with regulated and market prices, utilities have to take ERSE's rates into account.

Prices regulated by ERSE remain fixed throughout the year, although they can be revised quarterly to a limited extent.

 

(Reporting by Sergio Goncalves, editing by Ed Osmond)