March 6, 2021

Naturgy declares war on Competition

The multinational Naturgy has decided to paralyze temporarily during the coming months and until they know "the true intentions of Competition" investments in new gas networks in Spain, which channeled through its subsidiary Nedgia, as a result of the proposal of the National Commission of the Markets and the Competition (CNMC) to reduce the remuneration of this business. The energy company "subordinates the investment and spending policy to the new regulatory environment," the company's sources have indicated to this newspaper, although "investments in maintenance and security will remain active".

The company will make a first qualitative assessment (not quantitative) of the proposals of the CNMC on July 24 during its presentation of semi-annual results, they have added from Naturgy.

The decision has been taken this week by the leadership of Nedgia and that has already been communicated to the unions.

The National Commission of the Markets and the Competition (CNMC) informed last Friday that in its projects of circulars for the remuneration of the activities of distribution and transport of electricity and gas it proposes cuts that go of average from 7% to 21, 8%, depending on each activity.

According to this information, in the next regulatory period (2020-2025 for electricity and 2021-2026 for gas) the remuneration for the distribution and transportation of electricity will decrease on average by 7% and 8.2%, respectively, a decrease which will be even more pronounced in the case of gas, with an average of 17.8% for distribution and 21.8% for transport.

Naturgy already said that he would present allegations to the new remuneration methodology of the regulated gas and electricity distribution activity, but today he has taken another step to temporarily paralyze investments in new gas networks until he knows what practical effects this draft of the CNMC.

Despite this temporary stoppage of these investments, the result of a prudent approach to the new regulatory environment, Naturgy maintains its strategic plan in effect until 2022.

Nedgia, Naturgy's gas distribution subsidiary, is 80% controlled by the company.

. (tagsToTranslate) h. huntsman

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