Electric companies are worried about a massive tariff deficit of nearly 24 billion euros. And they have just cause. This tariff deficit is the difference between what consumers pay for electricity and the actual cost. The difference is financed by companies, but the Ministry of Industry is currently thinking about pardoning the deficit.
It is technically against the law to pardon the tariff deficit, which threatens legal stability in Spain and might be overruled by the courts. Not to mention the fact that investors looking to invest in Spain will look unfavorably on the proceeding.
So it also feared that the pardon will not be able to address 5 billion euros that have yet to be acknowledged. This amount could not be pardoned through a judicial process.
The tariff deficit problem will foment a new business structure for Spain's power industry. Electric companies, consumers and the State will adapt to the new structure as new revenues and billing strategies take effect.
