Ribera Softens The Cut To Electricity Companies

The Government backtracks on its shock plan for the confiscation of 2,600 million euros in alleged profits from electricity companies after protests by the European Commission, companies in the sector and large investment funds.

The Government backtracks on its shock plan for the confiscation of 2,600 million euros in alleged profits from electricity companies after protests by the European Commission, companies in the sector and large investment funds.

To do so, the Council of Ministers yesterday approved a Royal Decree-Law that will correct the measure adopted last September despite the fact that the effects of this new regulation are still impossible to quantify until the Executive has the figures that it is requesting from last week Red Eléctrica to the companies in the sector.

The Ministry of Ecological Transition wants to obtain the data of the contracts that will be exempt from the adjustment and that, basically, were already collected in the ghost letter (it appeared and disappeared from the ministry’s website) that was sent to Red Eléctrica to resolve its doubts before the liquidation of next November 15.

The new decree-law explains that the facilities covered with some term contracting instrument are exempt from the reduction, when the price of the coverage is fixed, when it has been contracted before the promulgation of RDL 17/2021 or when it has coverage longer than one year if signed later.

Despite these explanations, uncertainty remains in the industry since they continue to ignore the effect that it may have for them on prices, although the fact of setting only a one-year limit is considered to be an incentive for electricity companies to sign new term contracts.

Serious penalty
Ecological Transition has required producers to submit a responsible statement and supporting documentation on the energy covered by term contracting instruments whose model is included in the new standard and alerts them that the inaccuracy or falsity in the documentation provided will be considered of very serious infringement (with fines of up to 60 million euros).

Electric companies, like industrial companies, continue to hold talks with the Government to try to set conditions that do not affect their competitiveness.

On the other hand, the Government approves an extension of the social bonus to vulnerable consumers, which will grow from the current 25% to 60% -from 40% to 70% in the case of the severely vulnerable- until March 31, 2022. With This measure will double the budget for the thermal social bonus during 2021, reaching 202.5 million euros.

The recipients of the electricity social bonus also receive the thermal social bonus, a direct aid of 25 to 124 euros depending on the climatic zone in which they live to cover the costs of heating, cooking and sanitary hot water. Thus, the Government has increased the minimum amount to be charged by these consumers to 35 euros – two bottles of butane – and has doubled the budget allocated for this purpose during 2021 with an additional 100 million, reaching 202.5 million.

The direct help of the thermal voucher will translate into a check that will be sent by the autonomous community, which will have a higher amount in cold areas than in warm areas, with the aforementioned minimum of 35 euros. Taking into account the number of beneficiaries, the average amount will be 90 euros per beneficiary vulnerable consumer.

Surveillance of electricity
The new Royal Decree-Law will oblige electricity and gas traders to inform their customers of any intention to modify the conditions of the contract at least one month before said intention materializes.

Until now, the marketers could report after having undertaken the modification, no later than a billing period. In addition, in the communications relating to the modification of the contracts, the marketers will have to include a comparison of the prices applied before and after the review, as well as an estimate of the annual cost of the supply before and after the review.

With this measure, the Government intends to give greater visibility to the contractual modifications applied by the electricity companies and, at the same time, it will serve to monitor whether or not these companies break contracts as some of them have already begun to do.

The companies will also have to send to the National Commission of Markets and Competition (CNMC) transparent, comparable and updated information on the prices of the offers available at all times, including the conditions related to the termination of contracts and additional services. that requires the contracting of the supply, in order to make them available to the public in the Energy Offers Comparator on its website.

The Government has continued to hold meetings with the industry and electricity companies to continue working on measures that can also contribute to mitigating the impact of the rise in natural gas prices.

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