Planned 11% rise in power bills shocks Spain
Spain's energy minister said on Friday Spain's electricity prices would "under no circumstances" rise 11 percent in January, a day after the announcement of the hike caused a political storm.
Industry, Energy and Tourism Minister José Manuel Soria made his comments to national radio broadcaster RNE in the wake of reports on Thursday that Spain's consumers would be hit with a 11 percent rise in electricity prices.
The rise was announced after an electricity auction on Thursday in which suppliers determined power prices would rise 25.6 percent in the coming year.
This would, in turn, lead to a 10.5 percent increase for homes and businesses.
But Spain's competition 'super regulator', the CNMC, issued a statement early on Friday morning saying it would investigate possible "atypical circumstances" at Thursday's power auction.
The "context of elevated power prices in the market in recent weeks" would also be investigated, said the CNMC, which regulates Spain's energy, telecommunications and transport sectors, among others.
Soria told RNE his ministry "had suspicions" Thursday's auctions had been "manipulated".
"We don't know (who is responsible), but something unusual happened, as the CNMC report shows," he stressed.
"Now we have to work out what we are going to do and see if the price is going to go up to a greater or lesser extent, but never this 11 percent."
He called on the regulator to issue a full report on the auction on Thursday as soon as possible.
Thursday's announcement of higher power prices came on the same day that Spain's Popular Party government approved its new Electricity Sector Law.
This has been criticized by other parties including the main opposition PSOE party who believe the current system is lining the pockets of power suppliers.
The PSOE party called for Soria to resign after news of planned price hikes.
Spain's electricity prices are made of up of three actual components: access tariffs, energy prices and taxes.
The final energy prices for consumers is kept in check by reducing access tariffs (about 50 percent of the total cost, and made up of costs including transport and infrastructure) when energy prices rise.
Energy supply prices are determined by auctions held every four months.
Spain currently has a tariff deficit of €3.6 billion ($4.91 billion) after subsidizing electricity prices for the end consumer — this is despite industry proposals to eliminate this deficit in 2013.
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Industry, Energy and Tourism Minister José Manuel Soria made his comments to national radio broadcaster RNE in the wake of reports on Thursday that Spain's consumers would be hit with a 11 percent rise in electricity prices.
The rise was announced after an electricity auction on Thursday in which suppliers determined power prices would rise 25.6 percent in the coming year.
This would, in turn, lead to a 10.5 percent increase for homes and businesses.
But Spain's competition 'super regulator', the CNMC, issued a statement early on Friday morning saying it would investigate possible "atypical circumstances" at Thursday's power auction.
The "context of elevated power prices in the market in recent weeks" would also be investigated, said the CNMC, which regulates Spain's energy, telecommunications and transport sectors, among others.
Soria told RNE his ministry "had suspicions" Thursday's auctions had been "manipulated".
"We don't know (who is responsible), but something unusual happened, as the CNMC report shows," he stressed.
"Now we have to work out what we are going to do and see if the price is going to go up to a greater or lesser extent, but never this 11 percent."
He called on the regulator to issue a full report on the auction on Thursday as soon as possible.
Thursday's announcement of higher power prices came on the same day that Spain's Popular Party government approved its new Electricity Sector Law.
This has been criticized by other parties including the main opposition PSOE party who believe the current system is lining the pockets of power suppliers.
The PSOE party called for Soria to resign after news of planned price hikes.
Spain's electricity prices are made of up of three actual components: access tariffs, energy prices and taxes.
The final energy prices for consumers is kept in check by reducing access tariffs (about 50 percent of the total cost, and made up of costs including transport and infrastructure) when energy prices rise.
Energy supply prices are determined by auctions held every four months.
Spain currently has a tariff deficit of €3.6 billion ($4.91 billion) after subsidizing electricity prices for the end consumer — this is despite industry proposals to eliminate this deficit in 2013.
Don't miss stories about Spain, join us on Facebook and Twitter.
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