Spain’s power industry regulator proposed a new procedure for setting electricity prices after refusing to validate an auction last week that would have pushed rates up by about 11 percent.
The temporary procedure, which would use futures trading as a benchmark, will result in a price increase in the basic rate charged to consumers of 1.4 percent to 2.9 percent, the antimonopoly regulator known as CNMC said in a document posted today on its website.
The CNMC said last week it had detected “atypical circumstances” in a power auction that was used to set a benchmark for new basic rates as of Jan. 1. The government invalidated the auction, and Prime Minister Mariano Rajoy said his administration would act before year-end to establish a new procedure for setting energy prices.
The regulator today suggested using the average price of electricity futures from previous periods. Using prices from the previous six months, the boost to consumers in the first quarter would be about 1.4 percent, or 2.9 percent if only the previous three months were used, the CNMC said.
Added to the price increase would be a separate component of the basic rate, which is set by the Industry Ministry. That could raise the rate by as much as 0.9 percent itself, El Pais reported today.
The regulator, which also advises the government on electricity issues, listed a series of irregularities in the Dec. 19 auction, according to a ministerial resolution published Dec. 21. It said the final benchmark price, set through an auction of first-quarter power, was achieved in the seventh round, when never before in 24 auctions had that been achieved in fewer than 12 rounds.
Additionally, the round-the-clock supply of electricity auctioned, known as baseload, was set at 61.83 euros a megawatt-hour, more than 7 percent higher than the close on the previous day for over-the-counter trading and on the OMIP platform. That was the highest increment in the last 10 auctions, whose increase over previous closes was never more than 2 percent, according to the regulator.