Electricity bills are set to increase by up to 40% because of the Iberian mechanism to limit gas prices, according to the executive president of Endesa, Nuno Ribeiro da Silva, in an excerpt released from an interview with Jornal de Negócios and Antena 1. In reaction, the Ministry of Environment and Climate Action has spoken of “alarmism”.
“On July's electricity consumption bills, people will be in for an unpleasant surprise: we are talking about almost 40% or more. It has nothing to do with the electric companies. It will appear on the invoices, in a specific line, saying that the mechanism covered by the diploma x of the ceiling on gas prices is up to you, happy taxpayer — or unhappy taxpayer — to contribute x beyond what you had in your contract,” said Nuno Ribeiro da Silva.
However the Ministry of Environment and Climate Action have "rejected these alarmist statements by the President of Endesa and does not see any justification in the price increase that has been reported".
However, without denying that there may be significant increases in the liberalized market, the same office said that “the free market has other suppliers and consumers will always be able to look for better prices”.
The Iberian mechanism for limiting prices in the Iberian electricity market (Mibel) came into force on 15 June and aims to set an average price of 50 euros per megawatt-hour (MWh) for natural gas in the wholesale market, for a period of 12 months, starting with a limit of 40 euros per MWh.
But this solution only benefits Spain, claims the president of Endesa. “The measure was good for Spain, because it is a country that has a complex problem related to a populist tariff that the Spanish government created about three years ago and that is used by 11 million homes. […] Without this brake mechanism, these people would be paying more than 300 euros per MWh (about 5 euros per kWh in their homes)”, said the same manager in another excerpt from the interview.
The Ministry of the Environment and Climate Action argues that prices in Portugal and Spain “have been consistently below countries like France or Italy”.