Questions/Answers

The Automatic Social Energy Tariff, hereinafter named ASET, was deployed in 2016 as an innovative way to provide social protection, and it is a tangible example of how technology can aid the government to improve citizens’ lives, namely by tackling energy poverty. Considering that, in developing countries, “energy poverty” most often refers to the lack of access to electricity, while in developed countries it usually refers to the ability to afford energy, in 2010 the Portuguese Government launched the “Social Energy Tariff” to lighten the burden of energy bills for low-income families, by promoting reduced fees for those most in need. In 2014, a revision of the legal framework to the Energy Social Fare was made, broadening the criteria for accessing ASET; however, the results were lower than expected – both because citizens were often unaware of this benefit, and because the administrative burden to put a request forward acted as a barrier to many families. Bottom line, it still wasn’t enough, as not every family in need was benefiting from this reduction. To counteract this tendency, in 2016 the responsibility for the tariff application shifted from the energy suppliers to the State (Directorate-General of Energy and Geology – DGEG), which decided to automate the process, crosschecking data from several entities to identify the universe of consumers entitled to the social energy tariff. This decision completely altered the pattern, and the number of beneficiaries suddenly rose from near 150.000 to roughly 820.000. The goal of providing affordable energy to those most in need had finally been achieved.

The social electricity tariff was created to reduce the energy burden of domestic consumers, aiming to ensure the price was not an exclusion factor while safeguarding the Portuguese Government’s goal of universal access to quality and affordable services. The integration between DGEG, the Tax Authority, the Social Security and the energy suppliers, namely through the national interoperability platform ran by AMA, ensured ASET’s effectiveness and improved its efficiency in the national context. Designed to be an instrument of social justice and equity, ASET’s goal is, by definition, to deliver inclusive and equitable energy services to all citizens.

The Automated Social Energy Tariff is in line with several of the SGD’s, namely: - By assuring that roughly 820.000 vulnerable households (which represents approximately 20% of all households in Portugal) have affordable access to basic energy services, it’s aligned with the SGD 1, especially on targets 1.3 and 1.4 and SDG 7 (target 7.1) - By reducing the energy bills, people can now afford to warm their houses, equipping them with the proper appliances and have proper lighting, improving their housing conditions (SGD 11)

From a social standing, access to this benefit covers the fringe of the population exposed to the risk of poverty in Portugal (around 2 million). The rebate adds to other social benefits, helping to reduce the vulnerability of the poorest sections of the population. This represents no for the government since the costs with the ASET are supported by holders of ordinary power generation centres, and carriers / natural gas suppliers. Also, the process resorts to the interoperability platform, saving resources and time to all the stakeholders involved – in fact, interoperability and sustainability have frequently been linked as inseparable.

Although the Social Energy Tariff was first launched in 2010, the truth is it didn’t reach a good portion of the universe of economically vulnerable households in Portugal. This was both because citizens were not duly informed of this prerogative, but also because they had to actively request this benefit, presenting several documents as proof of their eligibility. These factors combined led to a very low number of beneficiaries, which up until 2016 never rose above 154.000 households. The automation of the service, where the Government proactively checks for eligibility and automatically attributes a social tariff allowed to bridge the gap and ensure all families in need now have financial support for their energy services. The initiative represents a growth of over 400% in the number of beneficiaries, showing that the previous system was not working as expected, as it was not reaching everyone.

The initiative applies to all, irrespective of their gender – in fact, the system that runs the eligibility criteria does not even “know” the beneficiaries – only their VAT numbers. While it doesn’t specifically address gender inequality, it makes a non-issue, as everyone is entitled to the same treatment regardless of gender.

The initiative targets the most economically vulnerable households, by establishing certain criteria: Firstly, only contracts for domestic permanent housing are considered, and they must have a contracted voltage power of up to 6.9 kVA, and annual consumption of natural gas up to, 500 m3 (typical domestic consumptions). After this first triage, consumers are then filtered by their socio-economic conditions, i.e., if their income is below a predetermined threshold and/or if they receive certain social benefits from the state, such as an unemployment allowance, an invalidity pension, or a social complement for the elderly, for instance. These most vulnerable groups are the main beneficiaries of the ASET; People that already have several constraints hindering their access to basic energy services, like low incomes, poorly insulated houses or high energy costs, and that in normal conditions could not afford these services, especially with the rising cost of the energy bills that brings an unsustainable pressure to the households’ budget. The reduction that ASET brings to energy bills can go up to 33.8% of the final price, so by providing additional financial support to these vulnerable households, it addresses the main obstacle to accessing quality and affordable energy services.

In 2010, to lighten the burden of energy bills for low-income families, the Portuguese Government launched the “Social Energy Tariff”, promoting reduced fees for those most in need: The Electricity Social Tariff was created. A Social Tariff for gas followed in 2011. In 2014, a revision of the legal framework to the Electricity Social Tariff was made, broadening the criteria to include low annual income households, besides the application of social benefits, in order to increase the number of the social fare beneficiaries. However, its results were lower than expected, as citizens were often unaware of this possibility, and the administrative burden also acted as a barrier to many families. The automatic procedure has widened the measure since, regardless of location, age, or level of literacy, as long as the necessary conditions are met, it is assigned without any effort on the part of the vulnerable consumer. Therefore in 2016, a legal framework revision changed the responsibility for the tariff application from energy companies to the State. The Portuguese government, in coordination with the Offices of the Secretary of State for Energy, the Secretary of State for Finance and the Secretary of State for Social Security came together and decided to implement a new system to deliver the service thereby making use of data already held on citizens. After processing data, only a binary reply is sent, informing if the client is entitled to ASET and obliging energy suppliers to change the tariff and inform the clients of the modification, ensuring confidentiality of the social and financial data of the costumers. Looking at the performance of the system, the implementation of the Automatic Social Energy Tariff (ASET) resulted in a fare jump from 150,000 to almost 850,000 beneficiaries. An increase of over 400% in the number of households benefiting from the reduced tariff.

The national interoperability platform has been in use since 2007, so entities were already somewhat accustomed with sharing data with the intention of improving the effectiveness and efficiency of public services. There were potential risks of compliance, namely where energy suppliers were concerned, but these were mitigated from the very beginning, as this was political initiative put into national law. The matter of data protection was also an issue, which was solved by using the interoperability platform, that allows for an anonymised process - the eligibility is conveyed though a simple yes/no answer, without revealing any sensitive information about costumers.

The development of a fully automated public service, with this impact, was a novelty in the country. The concept of “invisible services” is still at its early stages throughout the world, as it implies the ability to share data – and break institutional silos – to bring added-value to citizens and governments both – not an easy task. After three years after, ASET still serves as an inspiration in the design of new, more effective services in Portugal, and it’s drawing more and more attention in a European context, as an example of success.

More than drawing inspiration, it served as inspiration for more initiatives of the kind - it's being replicated for water supply, wastewater management and bottled gas tariffs, and other entities are looking into ways of applying the principle to other public services.

The initiative was launched at a national level and it has not been adapted to other countries, as far as we know. However, it has been receiving many honourable mentions within the European Union and has raised interest among many other Member States, as it is seen as a way of providing invisible services to citizens, in a more effective and efficient manner than what’s traditionally offered to citizens. Furthermore, it gave room for other similar initiatives to rise, namely in the context of reduced bills for water supply and wastewater management, or for other public services such as the national identity card issuing. In all reality, all that’s needed is a working interoperability platform, that allows for secure communication between databases, and accurate, reliable databases with the information needed to perform the service.

The answer is yes, it has been adapted, as relayed in the previous answer.

Internal human resources from the various entities involved were used to implement the ASET, and many still work to ensure the process runs smoothly. Also, a software developing company was hired to, in close cooperation with all stakeholders, detect and solve any technical problems that may arise. An online complaints system was also set up so that consumers can submit their questions or complaints, as well as a website and a call centre, were also put up to help beneficiaries.

Currently, there are not enough data to allow precise estimates of the impact of this initiative, as there is a shortage of data on many levels, especially when measuring the effort before the implementation of the ASET. However, it’s safe to say that it reduces the administrative burden, it allows for a more effective and efficient government administration, and it ensures fraud prevention. Additionally, the use of the national interoperability platform represents a gain in efficiency, as resources are being shared and reused by several different entities.

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ADENE – the Agency for Energy in Portugal, commissioned a study on the impact of the ASET in Portugal, which was published in March 2019. This study was led by a University and involved the support of several entities, namely from the public sector. The objectives of this study were to analyse the comprehensiveness and evolution of the social energy tariff in Portugal, emphasizing the impact of automaticity in the allocation process, and the reflection on the adequacy and potential adaptation of the conditions inherent to its application.

The study mainly focused on the evolution of the application of the Social Energy Tariff after the automation of the process, the distribution of beneficiaries in the Portuguese landscape, and the economic and social impact of the ASET in the national economy, in energy producers and in consumers.

The main findings of the evaluation refer that the introduction of an automated mechanism has been a successful experience that has led to the awarding of the benefit to unprecedented levels in Portugal (over 800,000 customers, representing an overall discount of over 85 million euros on their invoices). It was also mentioned that extending the social tariff to bottled gas for domestic consumers would benefit the poorest fringes of the population, residing essentially outside large urban areas – in this respect, it’s important to underline that ASET was launched for piped, natural gas – the only one which requires a contract. However, a pilot project for a “Bottled Liquefied Petroleum Gas” social tariff is under development, with the aim of benefiting vulnerable consumers who cannot access natural gas.

ASET required, first and foremost, political will and support, which is perhaps the main key success factor of this initiative. But requires the intervention of several entities, each with roles and responsibilities very well defined, in what’s truly an effort in collaboration. For instance: AMA (Administrative Modernisation Agency) provides the integration Platform that makes the automation of the Social Tariff possible, acting as a central Interoperability node with a catalogue of web services, provided by the authentic sources of information that can be used by the three different entities: DGEG, Social Security and Tax Authority. This Integration Platform is part of the Interoperability in Public Administration (iAP) concept, aligned with the European Interoperability Framework (EIF). DGEG (Directorate-General for Energy and Geology) is responsible for verifying the compliance with the procedures concerning the application of the social tariff and for the resolution of potential redress issues; The Directorate gathers information on energy contracts and through iAP the eligibility of each consumer is automatically checked against information held by the Tax Authority and the Social Security.

In the early planning for the integrated public service, there were several procedures involved, developed through working meetings between the Offices of the Secretary of State for Energy, the Secretary of State for Finance and the Secretary of State for Social Security), DGEG, AMA, the Informatics Institute (II) of Social Security and the Tax Authority. The access and the transmission of the information were subject to Deliberation of the National Commission for Data Protection (CNPD) and there were Protocols signed between DGEG, AMA, II Social Security, Tax Authority and, in that time, GPMC (electricity and natural gas), now called OLMC, regulating said data transmission. All the decisions reached on the organisational model were taken by agreement with all the parties involved, during the working meetings mentioned above, conducted by the Office of the Secretary of State for Energy. At the same time, there were working meetings between DGEG, Tax Authority and Social Security and also between DGEG, Distribution network operators and energy traders. Furthermore, the use of the national interoperability platform in itself represents collaboration from all stakeholders, to ensure data sharing with meaningful outputs.

ASET is a mature, reliable service that is now being used as an example to launch other similar services, so no improvements are needed – at least, no at this point in time. In terms of lessons learnt, we´d highlight: - The elimination of the administrative burden on the citizen should a leading principle when designing new public services; - The insurance that public authorities have authentic sources of information is fundamental for the success of integrated services; - The re-use of existing infrastructure can facilitate cross-sectoral collaboration and enable the effective development and governance of new services. For this case, the re-use of the Interoperability Platform was a key success factor for the project; -The breaking of silos within the public administration and the subsequent shift in the paradigm of public services design and delivery is mandatory for the accomplishment of any truly effective and seamless public service– collaboration is key!