Spain: Government accepts negotiation over energy cuts

The Minister for Ecological Transition, Teresa Ribera, as well as the National Commission of Markets and Competition of Spain (CNMC) announced that the proposed cut in electricity and gas prices will be opened for negotiation, listening to the affected companies. However, the authorities announced that a modification to the planned cut of 7% for electricity distributors is unlikely, a market controlled by 5 large companies: Endesa, Iberdrola, Naturgy, EDP, and Viesgo.

The CNMC pointed out that, in spite of having 326 companies active in the electricity distribution market, the ones really affected are the five mentioned, since they control 90% of the activity. Representatives of the electricity sector have indicated that the blow that would represent the reduction would be a nuisance, but would not pose a risk to the sector, as it is concentrated in the revenues of the two largest companies, Endesa and Iberdrola. However, the proposed 21% cut in the price of gas has generated greater concerns.

The electricity companies appealed to the CNMC so that when paying for the distribution it would reflect “more adequately the country risk of a regulated activity that can not be geographically diversified, recognizing the fact (sic) that the cost of financing a company that develops its activity in Spain it is not the same as that of a company that develops its activity in Germany or in “the average” of European countries “.
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