Sánchez declares war on electricity companies and will confiscate their extra profits to cap gas: “They can afford it”.
Tax measures, a review of the regulated tariff and a tool that forces electricity companies to auction energy between marketers and industrialists will be presented.
One of the fiscal measures, in fact, one already in place, but could be extended in time and even maintained permanently. The reduction of VAT from 21% to 10% will continue, at least, until December, although it has turned out to be insufficient in the face of rising prices. The Popular Party (PP), which registered a bill with its own measures at the beginning of the month, also contemplated the consolidation of this measure. The disappearance of the 7% sales tax on energy production will also be extended until December 31.
Likewise, the Electricity Tax, which is currently 5.11%, will be reduced, as announced by Pedro Sánchez in an interview on TVE: it will become 0.5%. “It does not seem acceptable to me”, said the President, that there are companies that are having “extraordinary profits” derived from the energy crisis. The idea, he assured, is to “detract the extraordinary profits” of these companies and redirect them to cap the electricity and gas bill. “They can afford it”, said Sánchez, who calculates that some 650 million euros will be deducted from the CO2 not emitted, and another 650 million euros from the gas, to these companies. The State has so far, with measures such as the lowering of VAT, Sánchez said, stopped receiving some 1,400 million.
Another measure that had been tried, unsuccessfully, by the government of José Luis Rodríguez Zapatero (PSOE) and which is included in the Electricity Sector Law of 2013, will give the competent minister the power to intervene in the price when there is a lack of liquidity or effective competition. It consists of forcing large electricity companies with relevance in the generation market to sell part of this production in auctions outside the wholesale market, which is right now, setting record prices. Ribera will ask the CNMC to design the mechanism and justify its implementation due to lack of competition.
In 2007, the Zapatero government designed this mechanism and Joan Clos, then Minister of Industry, ordered Endesa and Iberdrola to auction part of their production between independent electricity traders and large customers. However, the companies started a legal battle that ended up in the Supreme Court, which ruled in their favour, as they considered that the price set by the ministry was too low, allowing them to buy and resell at a higher price. To prevent this situation from happening again, the Council of Ministers is expected to approve a similar tool, but one that does not impose prices.
Is this all a little too late?
We can only watch with hope to see prices become more favourable and a tighter regulation in the market to act for the benefit of the consumer and not the energy suppliers or importantly, the companies that generate/ produce the energy.
At ¡Si! Compare we will continue to monitor the market and keep you informed in any important or relevant change. For now, where possible, keep the usage of electricity at a minimum, stick to the hours and do not expect to see a rapid price drop too soon.
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