Electricity companies admit that they have not been closer to the consumer

Electricity companies admit that they have not been closer to the consumer

The energy crisis that erupted in mid-2021 and accelerated with the start of the war in Ukraine has put energy companies in the spotlight, with sky-high electricity bills for customers and record corporate profits. Almost three years later, the electricity companies insist that “there were no extraordinary profits” and that the increased light was the fault of the gas, but they add that they could perhaps have done something more. “High prices effectively affect the image of companies because they are easy to recognize by their performance. We should have been more clear or closer to the consumer,” admits Marina Serrano, president of Aelec, the employers' association Iberdrola, Endesa and EDP, in an interview. With EL PERIÓDICO.


However, Serrano defends that “no performance is reprehensible.” He added that “the companies acted, took measures, informed and provided their electricity supplies under the specified circumstances,” and are “always” trying to “improve this relationship with the consumer.” “But I don’t know if we succeeded,” he adds. How can the situation be reversed? “Explain, talk and tell how the system works and reveal the characteristics and functions that companies perform. The investments and contribution they make and the transformation they make from changing the electricity system to a zero-emitting system.” He explains.

One issue on which power companies, as well as the association, have been more aggressive in recent months is an extraordinary tax on major energy companies that expires this year. The government has proposed to reform it to make it permanent while at the same time encouraging green investments. The association confirms that no contacts have been made with the Ministry of Environmental Transformation for reform, and insists that this tax is derived from a solidarity contribution from the European Union that was not included in the electricity sector, but only the gas company and the gas company. The hydrocarbons sector, which “does not comply with the rules on the utility of public assets” because it taxes income, not profits.

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Serrano, executive vice president, began her career at Red Eléctrica and was part of energy regulators CNSE and CNE. Finally, she became a consultant until the Council became the National Commission for Markets and Competition (CNMC). In light of the complete separation of this body, Serrano believes that the new national center must have “independence, technical qualifications, means and personnel,” as well as a “willingness to listen” to companies. Its directors must be “technically qualified persons with experience and knowledge of the sector.”


Let whoever pollutes the most pay the price

After record high prices during the worst of the energy crisis, the electricity market has now turned around and hit record lows, with hundreds of hours at zero euros and even recording negative prices for the first time in history.

“With the advent of renewables, when there are certain weather conditions where there is a lot of wind and water, there is a significant drop in prices within a few hours. The trend in renewables is to lower prices,” Serrano points out, but he defends that. The need to develop new elements envisaged in the reform of the European electricity market to provide stability to the market and avoid such extreme fluctuations, such as capacity mechanisms or contracts for difference, promoting storage with large batteries and the ability to use electricity when it is necessary

“Sometimes there is a misconception that these electricity market prices are the final price paid by the customer. But this is not the case. Consumers have to deal with other concepts in the bill (such as fees, charges, taxes…),” she says. President of Aelec, who advocates a deep reform of all these concepts to reduce the electricity bill, removing from the bill “all charges that are subject to social or economic policies, because the electricity consumer pays more” than customers of other energies and reducing or eliminating part of the taxes included.

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“Energy taxation must be rethought now that we are back to normal and there is no longer a price crisis.” The Electricity Company Owners Association is demanding the abolition of the tax on the value of production of electric energy (IVPEE), and is defending a 10% VAT reduction on the electricity bill “because it is an essential service.” He wonders, “Or at least the value-added tax does not change every month based on the electricity market price for the previous month.”

However, ELEC is calling for a comprehensive review of electricity taxes that is structural in nature and goes beyond electricity bill reform. A comprehensive reform that includes reducing taxes on electricity and increasing taxes on other energies that, in his view, contribute less to the decarbonization of the energy sector: namely natural gas and fossil fuels. Although he did not mention them explicitly. “More polluting energy should be taxed more heavily,” he points out.

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