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'Windfall Profit' Levy on Spain Utilities Rejected by Lawmakers
2010-09-08 16:17:26.566 GMT
By Ben Sills
Sept. 8 (Bloomberg) -- Spanish lawmakers voted against a
plan to impose charges on nuclear and hydroelectric plants that
was aimed at lowering the cost of the country's power.
The proposal by the Catalan Greens party was rejected by
324 votes to 9, a spokeswoman for the national parliament said.
Joan Herrera, the pro-environment group's leader, failed to
convince lawmakers yesterday that tapping the "windfall profits"
Iberdrola SA and Endesa SA earn on their hydro and atomic plants
was a better way to keep electricity affordable than to cut
consumer subsidies for renewable energy. Cutting clean-power aid
is an idea backed by Prime Minister Jose Luis Rodriguez
Zapatero's government as it struggles to revive the economy.
Zapatero has supported rival plans for lowering regulated
power-production costs, which typically exceed the revenue
utilities get for selling electricity. He rejected calls in June
to raise the tariff, or consumer rate, to close the gap between
costs and revenue called the "tariff deficit."
"In the midst of a crisis, and with an unprecedented
deficit, power companies are still producing astronomical
profits," Herrera said in a statement on his party's website.
"There is no reason to maintain these privileges."
Officials are searching for a formula to place Spain's
system of regulated power prices on a sustainable footing. The
tariff deficit was about 4.6 billion euros ($5.9 billion) last
year, Herrera said. The shortfall is covered by funds utilities
raise through borrowing.
Spanish utilities earned about 3.6 billion euros last year
from nuclear and hydroelectric plants that have paid off their
initial capital investment, Herrera said during yesterday's
debate, citing a study by the national power regulator.
Industry Minister Miguel Sebastian has been negotiating
cuts in the subsidies that wind and solar operators earn in a
bid to narrow the tariff deficit. Under Spanish law, officials
have to eliminate the shortfall by 2013.
For Related News and Information:
Top Spain and Portugal stories: TOP IBERIA <GO>
Power markets: VOLT <GO>
Carbon markets and alternative energy: ENVR <GO>
--Editors: Todd White, Randall Hackley
To contact the reporter on this story:
Ben Sills in Madrid at +34-91-700-9603 or bsills@bloomberg.net
To contact the editor responsible for this story:
Reed Landberg at +44-20-7330-7862 or landberg@bloomberg.net
