The Government finalizes the text of the decree, although it will not be until June when consumers notice it on their receipts
The European Commission has authorized the proposal presented by Spain and Portugal to limit the price of gas in the wholesale market in order to moderate the price of electricity paid by 10 million households covered by the regulated tariff. The approval comes a month and a half after arduous negotiations between the two countries, before last Friday they presented the final text to Brussels, adapted to community legislation and also to the demands of the rest of the European partners.
Now it is the Council of Ministers that will have to approve the decree that sets the conditions and technical details of a measure that will be much more complex than it apparently implies: capping the price of gas in the wholesale market at 40 euros/MWh in a first moment, to reach 50 euros/MWh in the rest of the period, for a maximum period of 12 months. By limiting this reference, the price of the electricity pool could fall to around 130 or 140 euros/MWh, compared to the more than 200 euros/MWh in which it has been moving in recent weeks. The bill would be reduced by 35%.
Government sources point out that it would be this very Friday when an extraordinary Council of Ministers was held to approve the measure, given the upward trend in which prices continue. The Ministry of Ecological Transition “continues to work to take it as soon as possible,” clarify sources from the Executive. Among the details that remain to be known is the financing of the measure. From Ecological Transition they choose to “distribute” the cost, which will imply raising the free market rates when they are renewed. Among the details that remain to be known is the financing of the measure.
Although the Government has the community authorization, this is preliminary and there is still pending information to make a formal decision. Once the decree is approved, it will be necessary for the European authorities to once again endorse the details of the document that will be published in the BOE and validated in the Congress of Deputies before a month has elapsed.
wait longer
In any case, users of the regulated market (PVPC) will not notice the effects of the measure until well into June. The billing cycles of the electricity companies that expire in the coming days will hardly be able to collect the foreseeable moderation in the price of electricity and it will not be until next month when the first effects of the measure will be noticed, although the Executive hoped that the text would be ready at the beginning of May, a circumstance that has finally not been possible.
The limitation of light has cost numerous negotiations between the EU Member States, especially until the last European Council at the end of March, in which Spain and Portugal fought to apply their ‘Iberian exceptionality’, arguing that they could limit the price of gas, without this implying a distortion of the community energy market, since the interconnections of the Iberian Peninsula with the rest of the continent are minimal, barely 3% of the total.
Throughout the process, the electricity companies have been opposed to applying this measure as the formula to stop the explosion in the price of electricity, especially after the invasion of Ukraine, when the ‘pool’ reached 544 euros/Mwh, historical record. The companies consider that the cap will distort the market, that it will slow down the signing of long-term contracts, that it implies leaving the euro in terms of the energy market and that consumers will ultimately pay for it. Pending the final wording of the decree, the sector awaits its content and does not rule out resorting to Justice, as they have done on other occasions.
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