The reform of the regulated price of light has entered its final stretch. Last December, the National Commission for Markets and Competition (CNMC) questioned whether the reform proposed by the Ministry of Ecological Transition would achieve the proposed objective of lowering the tariff for final consumers.
Since then, the Ministry of Transition has worked to adjust a new text that ensures that objective and at the same time that the volatility that affects that rate is reduced. A text that other ministries are reviewing and about to go through the process of the Council of State.
Once it is reviewed by this body, the Government plans to take it to the Council of Ministers so that it is approved “as soon as possible”, as confirmed in recent days by the Secretary of State for Energy, Sara Aagesen.
“In the consultation process of the proposal, the deadlines to which we had committed ourselves have been extended. Although there will not be many changes compared to the initial proposal beyond technical adjustments ”, he assured.
The reform of the regulated price of electricity, known as PVPC, was one of the requirements demanded by the European Union to allow Spain to apply the “Iberian exception” that caps the price of gas, for the moment, until May 31.( Spain has asked Brussels for its extension).
However, on December 16, 2022, the CNMC published a forceful report that denied that the planned savings of 297.1 million euros per year were achieved, which is included in the economic report of the reform proposal.
On the contrary, the CNMC calculated a slight increase of 1.7 euros per month, for which it asked to “analyze other alternatives”, in addition to “waiting for the end of the application of the cap on gas to better calculate the price in the market”.
Although this cap is still in force, the fall in gas prices in the last two weeks has meant that many days it has not been necessary to apply it. This has made it easier to test the new model in which initially (in the absence of knowing the final wording) 45% of the MWh price for the final consumer would be set by the intraday wholesale market, and the remaining 55% by a basket of financial products with a longer periodicity.
Within this basket, monthly prices would have a weight of 10%, quarterly prices 36% and annual prices 54%. All to reduce volatility. Some percentages in which in the final text “there will be no major changes”, according to Aagasen.
Where there are more likely to be changes is in the application schedule. Initially, in 2023 it would be applied to only 25% of the total price, to 40% the following year and to a final 55% in 2025.
