Power bills in Spain will not go up, at least for now. The national government made the worst move possible by freezing the planned increase to electricity prices. After the hike in March is was estimated that power bills should increase by 6% after October 1.
However, as elEconomista pointed out, it was possible that the Minister of Industry would decide to take on an electoral stance and freeze price increases. That is how things panned out. On the surface this may look like a cost-saving achievement. But in reality the decision just passes a big bill to those the next government that will take office after November 20 elections.
Therefore, the Partido Popular affirmed that the decision looks good to them, but that according to the Vice-Secretary General of Communication, Esteban González Pons, "We were not in favor of electricity bills continuing to rise in Spanish households."
The problem is not small. Right now, Unesa is strongly against the price freeze. Its CEO, Eduardo Montes, called the maneuver "irrational" and said that "consumers cannot be deceived by concealing the truth." There is a law that fixes the tariff deficit at 3 billion euros for 2011. In the event that the tariff limit is surpassed, it could be possible to undertake legal actions against the federal government for not complying with a law.
For the last quarter, they asked that power costs go up by at least 4% with the goal of partly making up for the sector's insufficient tariffs. Considering that they were already in the hole by 300 million, this deficit could rise to 500 million if the tariff associated with the "power tariff of last resort" (tarifa eléctrica de último recurso in Spanish) is stymied. And the amount could be higher still if other parts are nixed as well.
