Spain's energy dependency and various legal and subsidy factors have caused power and light bills to rise faster than the real costs of production, ultimately giving the country 25 billion euros in tariff deficits.
This is the price of hiding real costs for so long, using subsidies (consider for example what has happened with the Spanish solar industry) for ends that don't resonate with the public interest and concerns for efficiency, and for not letting the markets act naturally.
At this point, the power sector cannot afford to let its debt grow further, and it needs to pay down what is outstanding. As was feared, facing the problem will require big sacrifices. The power sector is going to start paying more in taxes, and these increases will ultimately translate to companies and domestic consumers.
The reform bill that the government sent to Congress figures that household gas prices will go up by 4% and industrial rates will go up by 10%. Logically, these increases are causing corporations to worry, because they use massive amounts of energy in daily production.
This is the case for chemical, paper, food, pharmaceutical, petrochemical, textile, automobile and ceramic companies. Companies in the power sector are complaining that the reform is an attempt to increase tax revenues. That may be true, but with the economy in this state, there is no other option.
The parliamentary procedure will clean up the rough edges of the reform bill, but it shouldn't be changed too much because the tariff deficit can't be cleaned up in any easier way. Energy is scarce and expensive, so we can't turn our backs on this reality.
