Competition defends its proposal to remunerate the electricity grid despite complaints from the sector

MadridThe National Commission of Markets and Competition (CNMC) wants it to come into force on January 1st. the new remuneration rate for electricity networks for the period 2026-2031 and, for the moment, maintains that the proposal it put forward this August is the most "robust," despite complaints from electricity companies.

This Monday, the vice president of the CNMC, Ángel García, defended the remuneration rate proposed for the next six years and did so before the sector and the Spanish government, during the presentation of the 2024 energy balance: "[The rate] must be sustainable [...], the consumer must be at the center," García argued. It must be taken into account that the cost of deploying and improving the grid is passed on to the electricity bill, that is, to consumers.

The Competition Authority has put forward a remuneration rate for the next six years of 6.46% (the current rate is 5.58%). In addition to this rate, it has also proposed a new methodology for calculating it. This figure is basically a limit on the investment that companies must make to improve and deploy the transmission electricity grid, but also the distribution electricity grids. The Spanish government sets a maximum investment amount, but the CNMC establishes the return, through this rate, over a period of six years.

For electricity companies, however, the Competition Authority's proposal is insufficient. In fact, this was again warned this Monday by Endesa's CEO, José Bogas, who said that the company "will not be able to carry out its [investment] plan" if the CNMC's proposal is not improved. The electricity company plans to increase investment in the electricity grid to €4 billion over the next four years. The sector has cited the return rates of other countries as examples, which range between 7.3% and 8.5%.

An open battle

The truth is that the sector hasn't completely given up on the battle. The reason is that the Competition Authority is currently analyzing all the objections to its rate and methodology. Sources within the agency indicate that they have "hundreds" of pages to review. Among these objections is a report from the Ministry for Ecological Transition on the proposal, which the Competition Authority must take into account when it receives it in the coming days.

But, in addition to this report, Competition Authority sources confirm that they will take into account the recent electricity planning proposal for 2030 that the ministry presented this week. However, it must first be approved by the Council of Ministers, and the schedule is very tight (the CNMC wants, at all costs, a new rate to be approved by January 1st, and before that, the Council of Ministers must approve it).

The electricity sector is confident that this proposal will modify the rate, or at least the methodology for calculating it. In fact, Competition sources acknowledge that there are new elements, such as increased investment in security, that could modify the proposal. In any case, these would not be revolutionary changes. However, it could be that even if the new rate goes into effect, the methodology will be applied later and the old one will be extended.