Galán pressures Pedro Sánchez and affects large companies Ribera’s hack to electricity companies

Ignacio Galán has become the corporate scourge of Pedro Sanchez. Since the new measures to lower the price of electricity were known, he has not only been especially active in denouncing a change of rules “in the middle of the game”, but has also moved to indirectly pressure the Executive transferring the costs of the electrical ‘hack’ to large Spanish companies.

As he has been able to confirm EL ESPAÑOL-Invertia, Iberdrola has already communicated through letters to its main clients that it will be necessary to renegotiate its flat rate agreements known in the sector as PPA (Power Purchase Agreement) and that until now guaranteed the supply of electricity for a fixed price, shielding them against possible increases in electricity.

In practice, Iberdrola transfers the costs of this electrical hack to companies outside the sector such as Danone, Bayer, Heineken or Telefónica and shakes the hornet’s nest against the Government of Pedro Sánchez, implicating his entire network of business clients in a problem that until now was only for electricity companies.

The companies estimate the impact of the recent measures approved by the Government at 2,600 million euros that directly affect the water line of benefit of the electricity companies, by forcing them to return the ‘supervening retribution’ due to high gas prices and taxation on the bill.

The objective, according to ministerial sources, is that “consumers pay this 2021 an amount equivalent to the amount they paid in their bills during 2018, adjusted by the CPI”, about 600 euros per year in the case of an average consumer in low voltage. And not just homes, “the high price of electricity puts economic recovery at risk, and also impacts industries and companies in general. “

New PPAs

However, with this movement Iberdrola precisely transfers the cost to the large companies with which it has contracts raising the bill of all Spanish productive sectors. In fact, there is an effect contrary to the one that the Government seeks to alleviate the invoice of industries and companies.

Sources close to the company indicate that this change in conditions does not have a political reading but is a necessary movement to be able to offset the harsh impact that these measures will have on their accounts.

They argue that the new rules translate into an increase of 75 euros in the price per kilowatt hour, something that is unaffordable. They also indicate that the changes do not occur only in the conditions of the PPAs, but also in the long-term contracts with all large companies.

The sources consulted by this newspaper also indicate that Iberdrola offers several alternatives that range from renegotiating upward contracts, canceling them or charging an extra fee during the time that the measures of the Government. The possibility is even offered to return part or all of the increases when the situation normalizes.

To rescind these contracts, they argue extraordinary circumstances that have completely changed the conditions under which these PPAs were signed and that fundamentally pass through the decree of the Government andl change in market conditions for electricity companies.

“Stability and predictability”

In this way, we are facing a new episode of the war that has been opened between the electricity companies and the Government of Pedro Sánchez. Galán himself said a few days ago from New York that the electricity sector and the economy as a whole should have “stability and predictability.”

Some statements he made at an event organized by the Spain-United States Chamber of Commerce, which was originally going to attend the President of government, but to which he finally did not go “for scheduling reasons.”

At that moment, Prince He insisted on several occasions throughout his speech that investors need to act on the long term and, for this, they need the laws not to change in the middle of the game, but to be able to offer stability and predictability.

The president of the electricity company believes that the change in the laws can cause the opposite effect: divert investment and that this forces to postpone climate objectives because the technologies that allow it cannot be promoted.

A war that the Government is waging with all the electricity companies. The distancing began with the bill for the National Fund for the Sustainability of the Electricity System, with the aim of expanding financing of renewables for gas and oil companies.

War with the electrics

Then he continued with the “CO2 dividends”, which pointed to the water line of nuclear, and now has put the icing on the cake with the electrical reform to lower the light. Precisely this last measure has a high probability of being prosecuted.

The analysis houses agree that the electricity reform, and especially the measure that obliges the State to return the remuneration caused by high gas prices, is “a special treatment that weakens the legal background of the regulations and it will facilitate appeals in the courts of traditional power companies. “

In fact, they assure that “liberalized electricity customers will see a huge inflation on your electricity bills in the coming months and, more importantly, as a whole, since the increase in regulatory uncertainty and the consequent increase in the risk premium will make the Spanish economic recovery slower and more expensive, “they indicate.

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