New Rules in August Make Fixed-Price, One-Year Electricity Contracts the Standard and Shield Vulnerable Homes From Summer Cut-Offs
From the end of August, electricity retailers with more than 200,000 customers must offer fixed-price, one-year contracts, and social-tariff holders keep their discount automatically when they switch supplier. Disconnections of vulnerable homes are restricted during summer and winter peaks.
Portugal's electricity market gets a new rulebook at the end of August, one designed to give households more predictable bills and to make it harder to cut off customers who fall behind. The changes come through a government decree-law, approved in the Council of Ministers (Conselho de Ministros) in March and published in the official gazette (Diário da República) on 29 June, and take effect at the end of next month.
Fixed price, fixed term
The headline measure obliges the largest electricity retailers — those with more than 200,000 customers — to offer supply contracts with a fixed price and a fixed term of at least one year. During that period a supplier cannot unilaterally change the conditions or terminate the contract early, giving consumers a guaranteed rate to plan around rather than a tariff that can move from one month to the next.
Fixed-price deals already exist on the Portuguese market, but they have been optional and unevenly available. Making them a standard offer from the biggest suppliers is meant to give ordinary households a clearer, more comparable choice at a time when wholesale power prices swing sharply — as they have this summer, when heatwave demand for air conditioning has pushed evening prices up whenever solar output fades.
Stronger shield for vulnerable homes
The decree also reinforces protections for economically vulnerable customers. Holders of the social electricity tariff (tarifa social) will keep the benefit automatically when they switch supplier, without having to reapply — removing a bureaucratic trap that has cost some low-income households their discount. Payment plans for arrears must take the customer's financial situation into account, and suppliers are barred from cutting off supply while a complaint or dispute-resolution process is still open.
Crucially for the current weather, the rules restrict disconnections of vulnerable customers during critical periods of high consumption in summer and winter — precisely the moments when losing power to run a fan, a fridge or heating can turn dangerous.
The energy regulator ERSE (Entidade Reguladora dos Serviços Energéticos, the Energy Services Regulatory Authority) will set the detailed terms for how these safeguards operate, including the specifics of the interruption limits and the payment arrangements for households in difficulty.
Taken together, the measures push the retail electricity market towards the kind of stability-and-protection model seen in other European countries, trading some of the flexibility of variable pricing for certainty. For residents, the practical advice is to review their contract when the new fixed-price offers land, compare the guaranteed annual rate against their current variable deal, and — for anyone on or eligible for the social tariff — confirm the discount carries across if they change provider.
