Energy
Business 28/09/2021

Small electricity companies at risk of bankruptcy due to price hikes

Market regulator opens files on electricity companies that raised prices taking advantage of changes to electricity bill

2 min
The president of the CNMC, Cani Fernández.

The rise in the price of electricity in the wholesale market could cause the bankruptcy of small electricity companies, as has already happened in other countries, such as the United Kingdom. The president of the National Commission for Markets and Competition (CNMC), Cani Fernández, warned today in a meeting with journalists in Barcelona. "We fear that there are marketers who may go bankrupt," she explained, indicating that the agency is monitoring the situation.

According to Fernandez, the risk is run by small marketers who have not somehow assured the price they pay for energy, for example through a PPA (a long-term contract with a fixed price), which lead to them having to buy electricity in the daily market, where record prices per MWh are being set, and sell it to their customers at a previously agreed price, when costs were much lower.

On the other hand, the president of the CNMC has explained that this body is completing disciplinary proceedings against electricity companies that increased the price of electricity for their customers taking advantage of the June 1st change in the way customers are billed. The CNMC sampled how the change had been applied by large marketers (those with over 75,000 customers).

Despite the fact that most electricity companies did it correctly, the CNMC analysed the top 25 marketers, which have 91% share of the total market of supply points in the free market in low voltage and 84% of the total energy in the free market in low voltage. As a result, 240,000 cases were detected in which the price the customer paid for electricity had been raised. Of these, some 150,000 had not been informed, which could be an irregularity.

A second part of this study will show how small retailers acted in adapting the bill to the new system, which introduced peak, off-peak and super off-peak electricity prices to encourage changes in households' consumption habits.

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