The independent energies press the Government not to ‘die’ in 2023
The independent electricity and gas marketers have closed the worst year in their history. High energy prices have put many on the ropes and some have even gone bankrupt and have been disabled for this year. Thus, facing the year that we have just begun, they ask the Government for actions so that the free market does not fall into oblivion and continue to lose competitiveness before the regulated one.
It was in October of last year when the Association of Independent Energy Marketers (ACIE) published its most critical statement in relation to the energy measures approved by the Executive. He conveyed the difficult situation in the sector and warned of the “risk of disappearance of competition in the electricity and gas markets after the latest legal reforms promoted by the Ministry for the Ecological Transition and the Demographic Challenge”.
In the first place, the association, of which companies such as Acciona, Engie España, Factorenegía, Feníe Energía or TotalEnergies are part, requested the call for auctions of inframarginal electrical energy -the one produced by the cheapest technologies- Decree provided for in Law 17 /2021. The department headed by Teresa Ribera intended to force -before December 31, 2021- the large electric companies to auction energy between independent marketers and industrial consumers.
However, the commotion caused months later by the Iberian exception left the bid on hold, despite the fact that the ministry has everything necessary to start it up. Iberdrola and Endesa, the first and second electricity producer in Spain, respectively, even threatened to break contracts if the auction is finally held. They justified that they had already committed all their energy for that year and that this solution meant “removing energy from some to sell it to others.” The royal decree also affected Naturgy and EDP.
Massive escape to the TUR
More recently, trading companies have complained that they are at a disadvantage compared to companies that are authorized to offer the Last Resort Tariff (TUR) for natural gas. A massive flight of customers is taking place after the Government has extended the limit of 15% rise in gas prices in each quarterly review until October 1 of this year.
ACIE denounces that the TUR establishes a final price for consumers below the one at which companies buy gas on the wholesale market. “Simply and simply expel from the market all companies that are not said traders of last resort,” he forced in a statement. In this sense, the employers’ association of the gas sector, Sedigas, has requested by letter to Ecological Transition that free market companies can also supply natural gas with the regulated rate, as announced by CincoDías. Industry sources tell this newspaper that there has not yet been a response from the Ribera department.
TUR has gained more than half a million subscribers in one year. The avalanche of requests for migration to the regulated gas tariff has been met with difficulties by the marketers, and has generated frustration among consumers who were unable to quickly contact the companies to change their contracts or, even, who suspected that they were to prevent their migration to a less profitable rate for them.
In fact, the National Commission for Markets and Competition (CNMC) opened an investigation into the four marketers at the end of October in order to find out if they are putting obstacles for their clients to switch to the TUR and cannot protect themselves from the price capped by the Government and lower than the offers on the free market. The four companies that by law can offer TUR -through their respective regulated marketers- are Naturgy, Iberdrola, Endesa and Total Energies.
Up to 5,000 daily procedures
Naturgy managed 230,000 regulated rate registrations in 2022 After the fervor aroused, the company chaired by Francisco Reynés has facilitated the automatic change for all its clients who request it through a form available on its website.
For its part, Curenergía (Iberdrola) has gone from 58,000 contracts in the regulated tariff at the end of 2021 to 300,000 at present. The company claims to be processing between 4,000 and 5,000 requests a day. Endesa’s retailer of last resort has also seen the number of customers with the TUR rate skyrocket, up to 296,000 -after gaining 64,000 in 2022-. Baser, Total Energies’ regulated market reseller, has also experienced a strong increase in the number of contracts it manages. At the end of 2021, it had 60,000 gas TUR contracts, compared to the current 165,000, which represents a growth of 175%, that is, almost tripling them.
There are three different types of TUR for private consumers with different prices according to the contracted powers. The CNMC comparator shows that for an average household with a consumption of about 5,000 kilowatt hours (kWh) per year, the annual cost of the TUR is around 409 euros, compared to a price range on the free market. which varies between 800 and 1,300 euros, that is, up to 217% more in the worst case. Likewise, a specific TUR has been created for neighboring communities.
In this context, ACIE urges the Government to apply intervention measures to reduce the price of the regulated gas bill to all customers, either through direct subsidies or reductions in tolls and charges. The Secretary of State for Energy undertook to “review in detail” the proposals of the marketers, specifically the status of inframarginal auctions, a possible help to gas customers at a free rate and the possibility that inframarginal energy is exempt from reduction -sold at prices below 67 euros/MWh- is only applied by the dominant electricity companies to clients in their portfolio, not to attract new consumers.