Spain plans ‘additions’ to controversial electricity bill recovery law

MADRID, Oct. 14 (Reuters) – Spain plans to introduce “additional measures” for a newly approved bill, opposed by some companies and investors, which clogs some profits from power companies in a bid to protect consumers from sky-rocketing energy prices, Prime Minister Pedro Sanchez said on Thursday.

“We will achieve (reasonable prices) with the measures we have taken and others that we may still take,” Sanchez said, adding that utilities that do not reap extraordinary profits from gas prices will be spared. the decree ratified Thursday.

The idea of ​​a centralized purchasing process in which European countries jointly negotiate and acquire gas reserves is gaining ground in Brussels, Sanchez said in a television interview, noting that the process was “unfortunately still slow”.

Sanchez’s comments about possible additional measures to be taken in the future echoed those of his Energy and Environment Minister Teresa Ribera earlier Thursday.

Companies, including wind power leader Iberdrola (IBE.MC) have complained to the European Union about the decree, which is part of Spain’s response to a global surge in electricity prices caused in part by strong demand from economies recovering from COVID-19 and low gas inventories. . Read more

“Algeria’s gas supplies are secure – although we have a geopolitical conflict,” Sanchez said. “It would be more secure if we had a strategic European reserve.”

The clawback bill originally planned to skim some € 2.6 billion from corporate profits, but the cost is now likely to be higher as it is tied to gas prices which have still increased since its introduction.

Ribera told lawmakers she hoped to come up with “additional measures” in the coming weeks, adding on Twitter that these would offer “reasonable prices to the industry and more protection to vulnerable consumers.”

She did not give more details on what the additional measures might be, but the actions of the companies most affected have nonetheless recovered some of the ground they had lost since the decree was unveiled.

Iberdrola shares have traded more than 2% higher, having lost 7.5% of their market value since mid-September. The Enel Endesa (ELE.MC) unit, which unlike Iberdrola is only active in Spain, has climbed more than 3%, having previously lost more than 10%.

“This is a positive message to give regulatory certainty and accelerate the energy transition, but my question is whether the approved regulations could cause exactly the opposite,” said Fernando Garcia, director of research on utility stocks. Europeans at RBC Capital Markets.

After a heated debate, Congress ratified the decree with 182 votes in favor and 150 against, although the regulation is technically already in force.

Additional reporting by Jesús Aguado, Belen Carreno and Clara-Laeila Laudette; Editing by Kirsten Donovan and David Gregorio

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