The National Energy Commission (NEC) ended up certifying the five companies that are financing the debt that will be used to cover the spending deficit that accumulated from 2011-2012 in line with upper limits set by law. Electric companies could be able to trim 5 billion euros off their balance sheets if the government decides to provide them with this much funding, which would bring their total debt to around 27 billion euros. A document from the regulator, to which elEconomista has had access, was submitted to the Management Group for Deficit Securitization (SGTD following the Spanish abbreviations) and announces the approval of an agreement that cedes funds that address imbalances realized between 2011 and 2012.
Specifically, liabilities from the past year, which are produced from insufficient tariffs, are expected to rise more than 4 billion euros (the last account balances are still pending with the regulator). Still, the legal limit for the deficit is 3 billion euros, so the Ministry of Industry will have to create a new law to increase the limit. This happened previously in 2010.
Further, the legal limit for this year is 1.5 billion euros, but predictions indicate that the imbalance will be more than 5 billion euros after adding in unbudgeted power tariff expenditures from the extra-peninsular islands Ceuta and Melilla. From these differences arose a ghost deficit that was pending acknowledgement, because the last time the Tariff Deficit Amortization Fund (Fade following the Spanish abbreviation) received 10.313 billion euros in cessions on January 28, only the legal limits of 3 billion and 5 billion euros for 2011 and 2012, respectively, were taken into account. Plus, there is the debt accumulated in December of 2010 and that entire year's imbalance. All in all, the document from the regulator ratifies a total tariff deficit of 7 billion euros (the 5 billion euro ghost deficit plus the 2 billion euro imbalance from 2010).
Of these 7 billion euros, Endesa will provide 44%, Iberdrola 35%, Gas Natural Fenosa 13.7%, HC Energía 6% and E.ON 1%. Sources within the sector confirm that currently fixed income markets are very active given the high levels of liquidity, meaning now is a good time to issue debt. Since March 1, some debt deals have been completed even if they have not been reported on yet. In any case, so far this year 2.364 billion euros of debt has been issued. Combined with last year's figures of 9.906 billion euros, a total of 12.270 billion euros of debt has been securitized.
