Electricity: how changes in tariff formulas have increased the bills of Brussels residents

The “energy component” of the bill is itself made up of several parts. There is the fixed fee, a fixed amount which does not depend on the customer’s consumption. This fixed fee is not affected by Infor GazElec’s analysis.

Soaring costs on the energy island: what impact on your electricity bills?

Added to this is the price per kWh of electricity consumed. Infor GazElec wanted to check whether the price per kWh, invoiced to Brussels customers, followed the evolution of the wholesale markets. Gold “prices for Brussels consumers are soaring more quickly than on the markets”concluded the non-profit organization. And this while “residential rates should normally follow market fluctuations”.

The non-profit association points in particular to the case of Engie’s “Direct” contract: between January 2021 and September 2024, the price of kWh increased by 82% on this contract. However, during the same period of time, the price on the reference market of the contract only increased by 16%.

The formulas change

How can we explain this decorrelation between the reference market price and the rate applied to the customer? According to Infor GazElec, Engie has modified the indexation formula of the “Direct” contract, to the disadvantage of the consumer. This modification made it possible to increase what the non-profit organization calls the “supplier share” in the price of the kWh invoiced to the customer. This “supplier share” represents the amount invoiced by the supplier, in addition to the price on the reference market. Thus, according to Infor GazElec, the “supplier share” of Engie’s “Direct” contract increased from 8.72% to 41.68% of the price per kWh, between January 2021 and August 2024.

Nicolas Per, research manager for Infor GazElec, tells us that Engie is far from being the only supplier affected by this phenomenon.

“In Brussels, there was a sharp increase in the ‘supplier share’ in the price of the kWh invoiced to the customerhe explains to us. This increase is found at Engie, TotalEnergies and Luminus, but neither at Bolt nor at Mega (Editor’s note: active via Test-Achats in Brussels). This phenomenon is therefore found among suppliers who have the largest market shares. In 2023, Engie represented between 60 and 70% of the Brussels market, compared to around 15% for TotalEnergies and 6 to 8% for Luminus. On the other hand, the increase in the ‘supplier share’ was very slight at Mega and Bolt, but they have very few customers”.

How much does it cost?

But what is the concrete impact of these changes in pricing formulas on consumer bills? To find out, we applied the different formulas of the “Direct” contract at an identical price on the wholesale markets (85.35 euros per MWh).

Thus, the January 2021 indexation formula results in an annual cost of 323.68 euros for the customer. The August 2024 indexation formula, for its part, results in an annual cost of 475.72 euros. The customer therefore pays an additional 152 euros per year, for an identical price on wholesale markets.

How did the cost of the energy island explode?

It is striking to note that this type of modification can have consequences five times greater than the explosion in the costs of the energy island on the bill.

Olivier Desclée, spokesperson for Engie, responds that “the comparison concerns two very different periods separated by an unprecedented energy crisis from which we are still suffering the consequences”. “Even though the situation has stabilized, markets remain volatile and expose energy suppliers to greater costs and risks than in the pasthe specifies. The evolution of our tariff formulas reflects the evolution of costs and risks linked to the sale of energy in two fundamentally different market contexts”.

Note also that the indexation formula for the Engie “Direct” contract of November 2024 has become more interesting than that of August 2024. For the same price on the wholesale markets, the November formula saves 29 euros per year to the consumer, compared to the August 2024 formula.

The non-profit association Infor GazElec also specifies that an increase in the “supplier share” in a contract does not necessarily result in an equivalent increase in the supplier’s profit. We simply know that it charges a greater surplus, compared to the contract’s reference wholesale market. To know the supplier’s profit margin, you would need to know how much the electricity it supplies to the customer cost it.

Finally, the “supplier share” has also increased, but less significantly, for gas contracts, notes the non-profit organization.