Updated on Tuesday, 19 October 2021 – 01:34
The CNMC proposes a strong reduction in the guarantees that companies have to advance to give them oxygen in full record of the price of electricity.
The president of the National Markets and Competition Commission (CNMC), Cani Fernndez.NGEL DE ANTONIO
The National Commission of Markets and Competition (CNMC) has activated a plan to anticipate the complex crisis that the electricity sector is going through and avoid a wave of bankruptcies of trading companies in Spain similar to the one that is devastating the United Kingdom. The body that directs Cani Fernndez It is extremely concerned about a situation that could reduce effective competition in the market with the exit of independent small and medium-sized companies outside the large electricity groups at the worst moment, when the price of a megawatt hour is trading at record prices.
To stop unnecessary bankruptcies linked to the current situation, the CNMC has asked the Ministry of Economy that it directs Nadia calvio the possibility of temporarily reducing the financial guarantees that electricity companies have to deposit with the system operator to be able to supply supply in Spain. Currently, these guarantees require covering three months of commercialization, but the problem is that current energy prices are multiplying their economic volume and leaving many of the companies without liquidity. His plan is to reduce it to one month and it started the next month of November.
“As we are seeing that marketers have difficulties to provide guarantees for such long terms with skyrocketing prices, we are seeing the possibility of adopting a measure collaborating with the Ministry and Red Elctrica to try to reduce the three-month period and reduce the guarantee We would give them much more liquidity, which is what they need to face the situation we have, “explains the president of the CNMC, Cani Fernndez, in conversation with EL MUNDO. The measure is de facto a balloon of oxygen for companies and anticipate the risks that a cascading bankruptcy similar to that of the United Kingdom could lead to, where the crisis has already swept away dozens of companies and reduced competition.
The regulator’s technicians have been analyzing this threat for weeks and working on a joint solution with Electric Network, that acts as operator of the electrical system in Spain. These two entities are in charge of asking Economa to disqualify a company when it detects risks in the operation due to the weakness of its financial solvency. It is the first step to stop fraud. In this case, however, the problems affecting companies are not due to negligent risk management, but rather to the conjunctural situation of skyrocketing prices in the wholesale market. Today a megawatt hour costs three times as much as a year ago, with the average so far this month above 200 euros.
The solution proposed by the CNMC will not affect the gas market, since in that case Fernndez explains that in that case the cross between guarantees and demand is made daily. This avoids the erosion of liquidity to companies, and those that cannot comply with the agreed provisioning automatically leave the market.
The CNMC has already detected two cases of bankrupt trading companies and has asked Calvio to be disqualified, although in these cases it is not due to the current price situation since the petition was formalized before the summer. It’s about the electric Inberred Solutions and the gas company CH Four gas. In addition, the CNMC has recently announced the initiation of 14 files to different marketers due to an alleged breach of some of its different legal obligations related to the deposit of guarantees.
When an electricity marketer goes bankrupt, its clients are transferred to one of the so-called reference marketers. These companies are the major market players, mainly Iberdrola, Endesa, Naturgy, Repsol and EDP. These are the only companies that have regulated distribution networks and have the legal obligation to offer their customers the regulated tariff, currently called Voluntary Price for the Small Consumer (PVPC).
However, there are other companies outside of these giants with growing client portfolios that hope to profit from the current financial problems of the competition. It is the case of Hello, Luz, which recently carried out a capital increase of 11 million euros, to probe the market in search of companies with financial problems from which they can buy their clients.
The CNMC is also working on this issue with the autonomous competition authorities, since a large part of the affected trading companies are of such a small size as they operate in a specific territory, that the national supervisor does not have information. “We are trying to be proactive without waiting for the problem to come to us and avoid situations like those in the United Kingdom,” concludes Fernndez.
The Competition initiative concludes with another from Omie, the company in charge of managing the wholesale electricity market in Spain, which proposes to modify its operating rules to reduce the guarantees necessary to operate in the market.
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