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Spain to Relax Conflict-of-Interest Plan for Power Consultants

Dec. 19 (Bloomberg) -- Spain’s landmark legislation to revamp electricity charges went to Congress today with amendments, including one that eases restrictions on potential conflicts of interest for industry consultants.

In the Senate, the ruling People’s Party introduced a change in the text to make it possible for firms to consult for power companies sooner after they finish audits, advisory work or analysis on their industry for the government.

The amendment replaces a three-year waiting period demanded in the previous draft of the bill with a requirement only for the government in the future to establish some kind of conflict-of-interest rules governing when consultants can work for the power companies. The waiting period is changed from three years to a maximum of three years, according to a draft scheduled to be voted on by Congress today.

Controlling the so-called revolving door between industry and government in the Spanish power sector is important to residential and business consumers considering that three operators, led by Enel SpA’s Endesa SA, supply about 70 percent of the nation’s power, according to data from the Spanish competition regulator.

Endesa, Gas Natural SDG SA and Iberdrola are among the top 10 Spanish largest listed companies with a joint market capitalization of about 70 billion euros ($96 billion).

Senator Jose Ignacio Palacios guided the draft through amendments, according to the institution’s website. Palacios didn’t answer an e-mail request for telephone interview via the party’s group press officer.

Sensitive Industry Data

The amendment also reduces the scope for consultants who may gain access to sensitive, or “relevant,” data while working for the state. It imposes restrictions only on work concerning power sector activities with government-regulated income, when the previous draft didn’t exclude unregulated businesses, such as power generation.

The law is part of the country’s wide-ranging power legislation, which the government said should eliminate the mounting gap of more than 23 billion euros that’s accumulated between the system’s revenue and costs. Some of its measures would reduce the subsidies renewable power plants can earn. All the new rules will be approved before February, Deputy Energy Minister Alberto Nadal said on Nov. 27.

A spokeswoman for the Industry Ministry didn’t reply to an e-mail and two calls seeking a comment. A press officer for People’s Party in the Senate didn’t provide immediate comment.

To contact the reporter on this story: Esteban Duarte in Madrid at eduarterubia@bloomberg.net

To contact the editor responsible for this story: James Hertling at jhertling@bloomberg.net

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