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    Government delays fuel surcharge to lower electricity prices and COâ?? cuts to electricity companies


    June 24, 2022 - CE Noticias Financieras

     

      Last minute halt in the approval of two key regulations in the energy sector. The Executive of Pedro Sánchez has opted this Friday to postpone the approval of the National Fund for the Sustainability of the Electricity System (FNSEE) and the cut in income to non-emitting and older power plants for the cost of carbon dioxide (CO?), which was called to reduce the profits of energy companies. Both texts were to be submitted to Congress for consideration next Tuesday.

      The reason for this delay, as explained to this newspaper by the president of the Commission of Ecological Transition and Demographic Challenge, Juan López de Uralde, has to do with the fact that both measures are in contradiction with some measures that the Government plans to approve in the extraordinary Council of Ministers this Saturday. The deputy of Unidas Podemos denies, therefore, that the postponement -advanced by El Confidencial- is due to lack of parliamentary support.

      The Fund was designed to group the economic contributions of all those who sell energy in the Spanish market, electricity, gas and oil, and thus contribute to the financing of key energy costs for the whole system. And it left two large groups of victims: the oil and gas companies -the initial recipients of the surcharge-, and the most intensive consumers of both fossil fuels -to whom the increase will end up being passed on-. When it was launched, the Executive's promise was that it would reduce the electricity bill by 13%.

      Criticism from the energy sector

      Both the FNSEE and the reduction in the profits of the electricity companies due to the CO? had raised an important stir in the affected sectors: in the fossil companies, the first one; and in the electricity companies, the second one. The sectoral employers' association Sedigas has been one of the most critical voices with the Fund, a measure which, they say, would be especially hard on consumers "in cold and inland Spain and in more depopulated areas [which consume more fossil fuels and less electricity]" and on industry, which "will face a severe reduction in its international competitiveness due to the impact of this measure on its energy costs". Despite the fact that one of the Fund's priority objectives is to increase the electrification of the economy, making electricity cheaper than gas and fuels, the employers' association considered "at risk" the "contribution of the gas sector to the achievement of the decarbonization objectives".

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