Government Shields Vulnerable Households From Power Cuts and Forces Fixed-Price Contracts From Large Electricity Suppliers — New Decree Mandates Tailored Payment Plans and Carries the Social Tariff Across Supplier Switches
A new decree-law puts the law behind electricity consumers: cut-offs are barred during peak-demand periods and while a billing complaint is open, vulnerable households gain a right to payment plans, large suppliers must offer fixed-price deals, and the social tariff follows them on switching.
The Government has signed off on a new decree-law that rewrites the rulebook governing how electricity is billed and, crucially, when it can be switched off — tilting the framework firmly towards the consumer at a moment when international shocks keep rattling European energy markets. The diploma has been promulgated by the President of the Republic but has not yet been published in the Diário da República (the official gazette), the final step before it takes legal effect.
"At a time when international crises are pressuring energy markets, the Government is placing the law on the side of consumers," said Maria da Graça Carvalho, the Minister of Environment and Energy (Ministra do Ambiente e Energia), framing the package as a structural shift rather than a one-off relief measure.
When the lights cannot be switched off
The headline change is a tightening of the conditions under which a supplier may cut a household's electricity. Disconnections for non-payment are now restricted during critical consumption periods — the peak-demand stretches of both winter and summer, when losing power carries the greatest health risk for the elderly, the chronically ill and families with young children.
The decree also bars a supplier from cutting supply while a billing complaint or a formal dispute-resolution procedure is still open. In practice that closes a long-standing loophole: until now, a consumer contesting an invoice they believed to be wrong could still find the meter cut before the dispute was settled. The amended framework — which updates the 2022 decree-law on the matter and transposes the relevant European directive — keeps the supply on until the disagreement is resolved.
These protections sit on top of the existing baseline written into Portuguese energy law, under which a minimum guaranteed supply must be preserved for the most vulnerable before any interruption, and households on standard low-voltage tariffs (Baixa Tensão Normal, or BTN) are entitled to settle arrears in instalments rather than in a single lump sum.
A right to a payment plan
For economically vulnerable consumers, the decree converts what was often discretionary into an entitlement. Households that qualify gain the right to a payment plan calibrated to their actual economic situation, rather than a standard schedule that ignores income. More broadly, suppliers must now proactively offer a payment plan to any customer whose arrears exceed 60 days — shifting the burden of finding a workable arrangement onto the company rather than the struggling household.
The package also targets the structure of the retail market itself. Suppliers with more than 200,000 customers will be obliged to offer fixed-term, fixed-price contracts running for at least one year. The aim is to guarantee that every large retailer has, on its shelf, a product that lets a household lock in a known price and insulate itself from the volatility that has defined wholesale electricity since 2022.
The social tariff follows the customer
One of the quieter but most consequential changes concerns the tarifa social (the social tariff), the discounted electricity rate granted to lower-income households. Under the new rules, the social tariff is maintained automatically when a beneficiary switches supplier — no fresh application, no paperwork, no risk of falling through the cracks during the transfer. Removing that friction matters: switching supplier is one of the main levers a household has to cut its bill, and a system that quietly stripped the discount on switching discouraged exactly the behaviour the regulator wants to encourage.
Self-consumption and energy communities
The diploma also opens the door wider to collective and self-generated power. Vulnerable consumers are to be guaranteed access, wherever possible, to energy communities — including those run by public entities — so that the benefits of shared local generation are not confined to households that can afford the upfront cost. And small rooftop installations of up to 800 watts are exempted from prior-control requirements, stripping out the bureaucracy that has slowed the spread of balcony and rooftop solar among ordinary households.
Overseeing the whole apparatus is ERSE (the Entidade Reguladora dos Serviços Energéticos, the Energy Services Regulatory Authority), whose supervisory remit over the retail market, energy sharing and energy communities is reinforced under the decree.
Why it matters now
The measure lands against a backdrop of persistent pressure on household budgets and a wholesale market still exposed to geopolitical swings — from sanctions decisions to supply disruptions far beyond Portugal's borders. For residents, the practical upshot is a stronger floor: a bill in dispute can no longer trigger a cut, a vulnerable household can demand a payment plan rather than hope for one, and the discount that makes electricity affordable now travels with the customer rather than being lost at the moment they try to find a better deal. The remaining step is publication in the Diário da República, after which the new protections become enforceable.
