Spain’s energy regulator proposed that power companies not receive the full value of 7 billion euros ($10 billion) of power-tariff debt they plan to sell to a government-backed investment vehicle.

Spain’s energy regulator proposed that power companies not receive the full value of 7 billion euros ($10 billion) of power-tariff debt they plan to sell to a government-backed investment vehicle.
The proceeds should be reduced to achieve an “equilibrium” between the government, consumers and the companies, which all bear the burden of financing the power-rate deficit, the Comision Nacional de Energia said in a report on its website.
“This Commission considers there should be an adjustment in the price that companies receive,” the report dated April 28 said.
The 7 billion euros of debt is a portion of the total on the books of Iberdrola SA (IBE), Endesa SA (ELE), Gas Natural SDG SA (GAS) and EON AG that the utilities were authorized by the government to sell. The sale reimburses them for subsidizing energy prices to consumers over the last decade. Iberdrola is Spain’s largest power supplier and its biggest producer of renewable energy.
The Spanish utilities have already sold 7 billion euros of the debt to the tariff-deficit amortization fund, known as FADE.
Under Spanish law power companies are obliged to lend cash to consumers to cover the gap between government-controlled power prices and the government-approved cost of delivering electricity.
The so-called tariff deficit it paid back over 15 years from power bills.