Cuts to electricity system subsidies and costs to end the deficit

Automatic summary, not yet reviewed

1. It changes the pay scheme for renewable, cogeneration and waste power plants: they will earn what they get in the market plus an additional payment only when needed, calculated for a standard plant run by an efficient, well-managed company. The reasonable return is tied to ten-year Spanish government bonds and the parameters are reviewed every six years.
2. Plants that already had the right to the subsidized scheme will get a pre-tax return based on the ten-year average yield of ten-year government bonds plus 300 basis points, reviewable after six years.
3. It sets how electricity transmission and distribution activities will be paid from the entry into force of the rule until the first new regulatory period starts, with return rates tied to government bonds plus a spread of 100 basis points in 2013 and 200 from 2014.
4. It cuts the long-term capacity investment incentive from 23,400 to 10,000 €/MW/year, extends the collection period for plants with current rights, and removes it for new plants, except those with a definitive commissioning certificate before January 1, 2016.
5. It changes who pays for the bono socialBono social A discount on the electricity bill for certain vulnerable groups. (discounted electricity rate): instead of all consumers funding it, the parent companies of business groups that simultaneously generate, distribute and sell electricity will cover it, in proportion to their supply connections and customers.
6. It allows the Minister of Industry, Energy and Tourism to review electricity access tolls as often as every three months when circumstances affecting regulated costs change, and requires a review within one month.
7. It creates two registries at the Ministry of Industry, Energy and Tourism: one for the specific pay scheme of renewable, cogeneration and waste plants, and one for electricity self-consumption. Registration is required to receive the specific payment.
8. It lowers the special tax on coal for professional uses that do not involve generating electricity from 0.65 to 0.15 euros per gigajoule, to level the playing field with natural gas, and makes it a serious offense to report false data under the reduced rate.

Who it affects

• Electricity consumers: They face a review of access tolls and stop funding the bono social, now paid by large power companies.
• Renewable, cogeneration and waste power companies: Their pay changes: they earn market revenue plus a specific payment based on a standard plant, with possible settlement of amounts already received.
• Electricity transmission and distribution companies: Their payments for 2013 and 2014 are set under new methods and return rates.
• Large vertically integrated power groups: They must cover the cost of the bono social in proportion to their supply connections and customers.
• Coal-using industries: They pay a reduced special tax rate if they use coal for non-electricity professional purposes.

Words worth knowing

Peajes de acceso (access tolls)

Charges consumers pay for using the electricity grids, which fund the system's costs.

Bono social

A discount on the electricity bill for certain vulnerable groups.

Déficit tarifario (tariff deficit)

A situation where toll revenue does not cover the electricity system's costs, creating debt.

Obligaciones del Estado (government bonds)

Spanish public debt issued by the State; its yield is used as a benchmark to calculate returns.

Puntos básicos (basis points)

Hundredths of a percentage point: 300 basis points equal 3 %.

It summarizes the law as published in the BOE. It is written by artificial intelligence and may contain mistakes: the official text is what counts. Read the official text · How we make summaries