The Minister of Industry is trying to push a proposal that sends a torpedo toward the line of credit that is supporting the electricity market. Power has been given to the Minister of Energy to intervene with prices on the electricity market and to influence the operating hours of electrical grids.
Granting this kind of authorization to a high ranking member of the Cabinet signifies an abuse of powers that is incomprehensible even if the ends are necessary. A market with floors and ceilings is not a true market. The sought objective is to pay companies less for the power that they produce, which if carried out, would create a market, a situation that would have ultimate repercussions on tariffs.
In the background of this decision is the desperate attempt to reduce the tariff deficit, which has risen to 24 billion euros, the decision attempts to involve the power sector in the effort to reduce this deficit. There is another factor in the Ministry of Industry's decision that is just as or even more serious: giving government the power to influence hours of operation for the central power stations, which in practice also means deciding what type of power will be used.
The proposal, which is stalled in a review phase before the final document is presented to the National Energy Commission, has been criticized by the entire power industry led by the employers' group Unesa and various other associations throughout the industry. This is not the first time that the Spanish government has intervened with markets. In March of 2006 it set power prices at 42.35 euros on the wholesale power market. To revive bad practices is not a good idea.
