The Government approves spending at least 3,000 million to subsidize the bill of customers with a regulated rate and those of central heating, but commits to expanding the budget whatever is necessary to cover the entire cost if it goes off
The Government has launched a million-dollar package of measures to lower the bill of gas of more than three million homes. A shield included in the More Energy Security Plan -the contingency plan that Brussels requires from the member states to combat the energy crisis- and which contemplates continuing to limit by law the increases that can be applied to the 1.5 million customers of the regulated gas rate throughout 2023 and also the creation of a new type of reduced rate for the 1.7 million households that have central heating in the neighborhood community.
The Executive guarantees to allocate all the public budget necessary to cover the millionaire hole that these measures will cause in the accounts of the Spanish gas system. As stated in the royal decree approved this Tuesday by the Council of Ministers, the Ministry for the Ecological Transition will approve a exceptional credit for 3,000 million to cover the cost of these measuresbut promises that “this item will be expanded by the necessary amount to cover the real deficit caused” from now until the end of 2023.
As part of the contingency plan for energy measures, the Government has created a new type of regulated gas rate that communities of residents with central heating will be able to take advantage of -until now they could not benefit because they exceeded the maximum permitted consumption- and that In practice, it will serve to reduce the bill of households that contract it by around 50%.
The General State Budgets (PGE) will bear that other 50% of the current receipt that those 1.7 million households will stop paying. The Government will transfer the necessary amount to the National Markets and Competition Commission (CNMC) so that it can be injected into the gas system accounts and avoid an extraordinary deficit.
cap on raises
In parallel, the Executive will also extend until the end of 2023 the limit on the increases that can be applied to the regulated gas rate, called Last Resort Rate (TUR) and that the Government reviews every three months fundamentally based on the evolution of the price of gas in international markets. Some 1.5 million customers are welcomed to the different TURs, mainly households and SMEs.
To prevent bills from skyrocketing in the midst of a spiral of gas prices in international markets, the Executive established in mid-2021 that a maximum of 15% of the cost of the material will be passed on temporarily (in principle, only two quarters) premium in the October and January revisions of the regulated rate, which In practice, it meant limiting the increase in the final price to around 5%..
The small gas consumers covered by the TUR were thus saved, in the worst moments of historically high gas prices, from the sharp increases that would have been reflected in their bill if the quarterly increases had not been met. Until now, this difference between what the bill should have increased and what actually increased became a debt with the large gas companies and their clients have been paying it in installments.
Debt that customers will pay
The gap between the increases that should be applied and those that were actually applied generated a debt of just over 200 million dollarse euros with the companies that offer the regulated gas rate (Naturgy, Endesa, Iberdrola and Totalenergies) in the first two quarters of application of the measure, according to industry sources. In the subsequent quarters, higher increases have been applied than those that really corresponded and thus the clients have been reducing that assumed debt, until cutting it to around 170 million euros today.
That pending debt generated in the last year will continue to be paid by customers with a regulated rate with the system that has been in force until now of deferred payments, according to sources from Ecological Transition. But the Government has established that all the deficit generated from now on will be assumed by the PGE to prevent the gas companies from suffering imbalances in their balance sheets, which will skyrocket from now on with the new measures.