Spain's Competition Authority monitors electricity companies

2 min
Windmills in a wind power plant in Conca de Barberà

BarcelonaAs if the increase in the price of electricity was not enough, which this Wednesday has broken another record, Spain's National Commission for Markets and Competition (CNMC) has made public that in general the electricity companies have not adequately informed users of the new rates and, in some cases, have even overcharged them. These facts are particularly serious in a market that is still controlled by large operators, despite the increasing proliferation of initiatives to break de facto monopolies. The CNMC states that in some cases there have been cases of overbilling 30% more of the so-called energy term and urges electricity companies to return this money to customers as soon as possible.

The Competition Authority's complaint comes a week after the publication of million-dollar fines for a cartel of construction companies that altered Fomento's - the Spanish ministry for Transport, Mobility and Urban Development - tenders to award the majority of road construction works in the 2014-2018 period. The first thing to do, then, is to congratulate ourselves for the existence of effective oversight bodies that defend the interests of consumers and ensure the proper functioning of the market. Experience has shown, since the antitrust laws passed in the United States in 1899 (the so-called Sherman Act), that the market needs limitations and vigilance to guarantee free competition and prevent monopolistic situations.

In the case of the energy market, moreover, a stricter control is necessary because we are talking about a basic good for the community and a key piece for the economic development of the country. Indeed, the price of electricity is a very important variable for many businesses, and often makes the difference between being profitable and having to lower the shutter. Admitting that it is not an easy issue to solve, the Spanish government has to act to prevent a malfunctioning energy market from having a negative impact on the competitiveness of companies in comparison with neighbouring countries where prices are more affordable.

What does not make much sense is that the success of renewables, which take advantage of free and inexhaustible energy sources such as sunlight or wind, ends up raising the price of electricity. If on top of that the regulatory changes that are introduced to try to achieve a more rational consumption of energy and that users can save on their bill are not applied correctly, then we are facing a perfect storm that can lead to many families to have real problems to cope with the next payments.

PSOE and Podemos are discussing various formulas to try to alleviate the situation, from the creation of a public electricity company (an option practically ruled out) to the introduction of changes in the price calculation system, which is being studied. Meanwhile, the least that can be asked of the electricity companies is to be careful and transparent in the application of the new tariffs.