The proposal of Spain and Portugal to limit the price of electricity generation with gas and lower the electricity bill has already been sent to the European Commission, according to the Portuguese media Expresso.
The compensation to electricity companies for the gas cap will be charged first to households in regulated rates and large industry
The sending of the proposal this Thursday to the General Directorate of Competition of the European Commission, which the Spanish Ministry for the Ecological Transition does not confirm, arrives days late with respect to the announced calendar. It was still pending "some technical adjustments" related to the time matching of the electricity market shared by Spain and Portugal, according to the third vice president and minister for the Ecological Transition, Teresa Ribera, indicated on Wednesday.
These technical details were related, Expresso points out, citing sources on the Portuguese side, with the distribution of costs of the measure in a proportionate way between Spanish and Portuguese consumers.
Ribera insisted on Wednesday that the mechanism will be approved "very quickly." The initial plan of the Spanish Government was to approve the measure in the Council of Ministers last Tuesday, but it had to be delayed. Next Monday is a public holiday in Brussels.
41 days have had to pass since the President of the Government, Pedro Sánchez, and the Portuguese Prime Minister, António Costa, started the so-called Iberian exception in Brussels, which the electricity companies have tried to overthrow with an intense lobby before the European authorities and that, as Ribera pointed out on Wednesday, companies "don't like it."
On Thursday morning, European Commission sources insisted that they had not yet received the paper. “After the political agreement reached on April 26, the Commission is waiting for the detailed plans of measures from Spain and Portugal”, Brussels said on Tuesday. “They have not yet been presented formally or in draft. This is essential information without which the Commission cannot conclude its assessment,” he added.
The initial proposal from Spain and Portugal was to set a price of 30 euros per megawatt hour (MWh) for generation with natural gas, but they finally agreed with Brussels to raise that cap for combined cycles to 50 euros/MWh, which will be applied for a period of one year, starting with a lower figure of 40 euros/MWh. To achieve this political agreement, the idea that this price would be different for energy exports to France also had to be discarded.
The difference between the real price of gas and the fixed cap will be charged to consumers, but the result will be a significant net saving on the bill. A week ago, the CEO of Endesa, José Bogas, estimated the cost of the measure at 6,000 million euroswho will finance it in the first instance the consumers who are going to benefit from it first: those directly exposed to the wholesale market. In the case of the wholesale market, it is the majority of the industrial and domestic markets covered by the semi-regulated rate, the voluntary price for small consumers. Subsequently, those with longer-term contracts will be charged as they expire.
According to Ribera, the measure will translate into a drop of 30% of the consumers covered by the PVPC, which is covered by around 40% of households and to which the president of Iberdrola, Ignacio Sánchez Galán, described this Thursday as "fools" because they are paying more, although free market rates are already experiencing sharp increases, according to the Facua consumer association.
This last company is the one that has most openly opposed the measure, which has been very well received by the big industry. On Tuesday, the Alliance for Competitiveness, which includes the large employers of the automotive, steel and food industries, among others, publicly thanked Ribera for his efforts to implement this measuredemanded that in addition to that cap on gas, which they celebrate, power companies be forced to auction part of their cheap energy.