Do Spanish regulated electricity tariffs contain State aid?

European Commission consultation (8 pages, PDF) on the compatibility of the regulated electricity tariffs available to businesses in Spain alongside the open market with EC State aid law. The regulated tariffs were lower than open market prices in 2005, and a levy was used to compensate regulated suppliers for unexpectedly high wholesale prices. The Commission alleges that this represents a discriminatory aid funded out of State resources.

The English summary (first two pages) does not disclose whether users that have switched to another operator have a right to come back to the regulated tariff, and does not make it completely clear whether the Commission alleges that State aid arises from the differential treatment of business users on regulated and open market tariffs.

The Commission's main objection seems to be that businesses' electricity prices and regulated suppliers' "guaranteed" profits are being unjustifiably subsidised by a "parafiscal levy" on all consumers.

Responses within a month (Tuesday 27 March 2007).

For further information or advice please contact Franck Latrémolière.

Filed under DG Competition, Electricity, State aid.

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