Government Will Validate Today The Cut To Electricity Companies Without Applying Changes

The vice president and minister of Ecological Transition, Teresa Ribera, met yesterday with the president of Iberdrola, Ignacio Sánchez Galán, and with the president of Naturgy, Francisco Reynés, to analyze the proposals of the companies to face the rise in electricity.

The meeting takes place on the eve of the validation by the Congress of Deputies of Royal Decree-Law 17/2021 in which 2,600 million euros are confiscated from electricity companies for an alleged benefit achieved by the rise in gas prices.

Ribera assured yesterday that he expects the measure to be approved without changes today in Congress. In fact, Podemos was very clear about it. The Minister of Equality, Irene Montero, indicated that: “We must not give one millimeter because we are going to defend the general interest.”

Despite this, the President of the Government, Pedro Sánchez, left the door open to specify the decree law in order not to reduce the competitiveness of companies.

The intention of the Executive is to negotiate with the electricity companies and introduce the changes that are considered within the processing of the law on the remuneration of CO2 not emitted or in the Senate in the processing of the National Sustainability Fund.

We can pressure the Executive to maintain the 2.6 billion cut
The PNV spokesman in Congress, Aitor Esteban, urged Sánchez during the government control session to “tweak and reorient” a decree that, in his opinion, will lead companies to energy costs that could affect employment and provoke Ertes.

The Ministry of Ecological Transition, which met at the beginning of last week with the large industrialists, continues to analyze measures to try to contain an electricity price that is already at absolutely overwhelmed levels.

Ribera has indicated that the Government is working on technical aspects for the hiring of industrialists, since “perhaps it may need the support, endorsement and guarantee of the Fergei” (Spanish Reserve Fund for Guarantees of Electrointensive Entities), a guarantee fund public for the contracting of energy in the medium and long term by the so-called electrointensive industry.

The government also has to develop primary energy auctions and may extend or deepen tax cuts or aid to vulnerable consumers.

Iberdrola requests
At yesterday’s meeting, the president of Iberdrola -one of the most critical of the measure- reiterated the proposals that he has been making since June, such as establishing a regulated price for nuclear so that they have an adjusted but sufficient profitability, eliminating the discussion on surplus income and the consequences of costs and taxes that affect its economic viability.

The utility also asked to index the PVPC to forward market references, so that consumers with less capacity to manage demand are not exposed to spot volatility. Eliminate the tax on the value of production (7%), which has a special impact on industrial consumers, reduce VAT on all or part of the electricity bill, eliminate the current tax on charges, which multiplies the tax rate by the accumulation of taxes on costs not related to the supply and provide the increase in revenue from CO2 auctions to the most vulnerable consumers, thus mitigating the price increase.

Meeting with Naturgy
The president of Naturgy, Francisco Reynés, and Minister Ribera met at noon. During the meeting, several proposals were sent to the Minister in order to contribute to a constructive debate on the current situation in the electricity sector. Among them, the following: that the reduction provided for in the RDL does not apply to fixed price rates / PPAs for industrial customers signed before September 14, because this would prevent the development of renewables and therefore compliance with the PNIEC and confirm the transitory and temporary nature of the measures contained in RDL 17/2021; and ensure that your application is only six months old. Otherwise, this uncertainty will make it impossible to sign any type of long-term contract or PPA.

Naturgy has reiterated to the Minister the importance and value of the company’s commitment to society and reaffirms its willingness to maintain its support for its clients with measures within the company’s scope of action. The company announced its Commitment Initiative (60 euros / MWh for two years without conditions), which it maintains despite the measures subsequently launched by the Government.

New fiscal measures for the electrointensive
The Minister of Industry, Reyes Maroto, has assured that she hopes that today, in a second meeting, more advances will be made with electricity and the electro-intensive industry that will avoid the impact on production. Asked about the progress on the subject, Maroto has responded that work is being produced in parallel with the sector, its Ministry and the Ecological Transition Ministry. As he has said, for the Government it is a “priority” to provide a solution to the increase in electricity prices, of which he has explained that “they correspond to factors unrelated to what are the parameters that we can control.”

For this reason, they have asked the European Commission and have had “progress” on what instruments can be put in place to help States control these prices. The minister has detailed that tax reforms have been addressed, as well as the accompaniment of vulnerable consumers and also the electrointensive industry.

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