Endesa appeals to the CNMC the cap on gas and points to litigation against the Government

Endesa has gone on a war footing against the cap on gas. The country’s main electricity companies have spent weeks discussing your strategy internally to shield their interests against the Government’s latest shock plan to lower the price of the receipt for regulated rate customers (PVPC). the company he runs Joseph Bogas has been the first to make a move, through official channels, to avoid the economic impact of the ‘Iberian exception’. Everything indicates that other giants in the sector will follow in their footsteps.

The electricity company has raised before the National Commission of Markets and Competition (CNMC) an ‘economic management conflict’ against OMIEthe Iberian market operator in charge of the liquidation -collection rights and payment obligations- that corresponds to each agent depending on the result of the negotiation of electricity prices in the daily and intraday markets, according to sources familiar with the process consulted by La Información. Endesa’s challenge refers to the ‘receipts’ that the OMIE has transferred to it after the start-up of the gas cap.

It’s about a administrative act with which the electricity company has attacked the criteria established by Royal Decree Law 10/2022 regarding the contracts that must participate in the compensation mechanism for the cost of the political limit on combined cycle offers. The company has taken advantage of the conflict raised to charge against the adequacy of the Iberian intervention mechanisma criticism that the CEO of Endesa has defended publicly on different occasions.

Official Endesa sources have clarified this Tuesday -after the publication of this news and after being consulted by La Información this Monday- that the company rules out judicial appeal of the royal decree of the top to the gayes The company, however, has confirmed the aforementioned claim before the regulator. “We have filed a dispute with the CNMC over a specific aspect of how the RDL is appliedwhich has to do with the cost of the adjustment being applied to automatically extended contracts at the same price. We made a query and we do not agree with the answer“, have indicated from the electrical.

The Spanish standard includes in this package all supply contracts at a fixed price renewed or extended from April 26, even when identical conditions are maintained. Portugal, on the other hand, exempted from the payment of said compensation extended contracts with the same price. The interpretation of this point has become a headache for the legal services of the OMIEaccording to industry sources.

The cap on gas is a setback for Endesa, which has been facing a commercial war for months in its struggle with Iberdrola for leadership of the commercial business. of his almost 9.9 million customers, just over 4 million belong to the regulated market. Just as the Government has designed the Iberian mechanism, the latter will support the weight of the gas cap, since the cost of the measure will be reflected in your bills. Reducing the burden of the Iberian exception for its customers has become a priority for the large electricity companies… under penalty of losing market share.

The process is in an initial phase. The OMIE has not yet submitted its allegations. Everything indicates that this will be limited to arguing that, in his capacity as liquidator, he has only stuck to applying what is included in a royal decree that, in addition, has the approval of Brussels. Despite the limited path that is assumed for the conflict, it is about a key step that could define Endesa’s strategy against the setback of the Iberian plan. At the moment in which the organism that presides over Cani Fernandez resolve the process, the Spanish subsidiary of Enel would have free rein to appeal the RDL in court, an option that, today, is not on the table.

The administrative act before the CNMC is a common trump card used by electricity companies to battle against the Government’s energy policy

This strategy was the one that the largest energy groups in the country, including Iberdrola, Naturgy or Repsol, applied in their crusade against the first hack against their remuneration included in royal decree 17/2021. Given the companies cannot appeal through the regulator a regulation with the force of law but its effects canthe aforementioned procedure before the CNMC is the trick to which, with some frequency, companies in the sector resort to start a war against the Government’s energy policy.

It so happens that Endesa was the only one of the big four that did not fight against the first blow to the remuneration of the electricity companies promoted by the Minister for the Ecological Transition, Theresa Rivera. But the Italian capital group does seem willing to fight against the formula for applying the cap on gas, a measure that could cost Spanish consumers €6 billionaccording to preliminary estimates shared by José Bogas.

The relationship between the Government and the electricity company has become tense in recent months. This is deduced from the progressive hardening that the speech of Endesa’s first sword has experienced regarding the measures that the Executive has been approving. The recent announcement of an increase in taxes on companies in the sector, which the Government hopes to apply next year, distances reconciliation and pushes energy companies to explore all avenues to shield the interests of its entities and shareholders.