Spain: CNMC drive to cut energy prices facing conflict of interest claim

Spanish market regulator CNMC has proposed a reduction of 7% and 17.8% respectively on payments made to electric companies and gas distributors to be achieved through changes to the methodologies used to calculate remunerations for the transport and distribution of these resources, seeking to correct recent increases in their cost to consumers. The companies who transport these energy companies, Red Eléctrica de España and Enagás, could be the most affected. The CNMC expects that the reduction in these prices will lower electric bills by between 3% and 6%, as well as a 10% to 20% reduction in gas prices.

The proposal has had a strong negative impact on the stock market for energy companies since Friday, July 5, with Enagás being the most affected after a 7.2% drop in the stock market. The electric companies have strongly criticized the plans; considering that “the contribution of electricity distribution networks is crucial to integrating the volume of planned renewable projects, making self-consumption possible and allowing the development of infrastructure …”

The case has been complicated by a complaint filed by several companies, who allege a conflict of interests in the preparation and approval of these cuts given that the Minister for Ecological Transition, Teresa Ribera, is the spouse of CNMC counselor Mariano Bacigalupo, who would have participated in the elaboration of the guidelines and methodologies for remuneration to gas producers. Ribera would be in charge of defining if whether these guidelines are adequate. Affected companies have alleged that this causes a conflict of interest. Both Ribera and Bacigalupo have denied that their relationship affects the independence of their judgement.

Full Content: El Mundo, El País

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