WRITTEN QUESTION E-1789/00

by Luis Berenguer Fuster (PSE) to the Commission

(8 June 2000)

Subject: Disfunctions in the calculation of electricity prices in Spain

In accordance with a custom which has become habitual in the period since the new Commission took office, a report concerning the Spanish electricity sector has found its way into the Spanish press. According to that report the price of electricity has fallen by 16 % over the last three years.

Since it may be feared that the purpose of this press report is to create a favourable environment for the approval of public aid (CTCs) for the sector and that the Commission will become the laughing stock of Spanish consumers who do not see any actual evidence of this reduction.

Can the Commission answer the following:

- Would it confirm or deny the report to the effect that the price of electricity in Spain has fallen by 16 %?

- What calculations has the Commission made?

- Could the Commission provide a breakdown of those calculations, distinguishing between industrial and domestic consumers?

- Is the Commission aware of the studies carried out by the National Electricity Grid Committee, according to which the price of electricity increased in both 1998 and 1999?

- Are the Commission's calculations incorrect and, if so, why?

Answer given by Mrs de Palacio on behalf of the Commission

(20 July 2000)

1. One of the most visible effects of the opening-up of electricity markets, lower electricity prices, is, in the opinion of the Commission, becoming a reality in the Community (communication from the Commission to the Council and the Parliament Recent progress with building the internal electricity market(1)). Statistics on electricity price trends in Spain from 1996 until 1999 show that prices have fallen. Annex 2 of the Commission communication shows that nominal prices of electricity have fallen in Spain (i) for domestic consumers, by 15,1 %, (ii) for small enterprises, by 18,4 %, and (iii) for industry in general, by 16,2 %. The drop by 16 % mentioned by the Spanish press and the Honourable Member is most likely the result of a simple arithmetical average of the three figures above. These figures are published by Eurostat and are on the basis of prices in Euros. If the same type of figures are provided in national currencies, the nominal prices of electricity in Spain have fallen by 12,5 % for households, by 16 % for small enterprises, and by 13,7 % for industry in general (July 1996-July 1999).

2. The Commission is aware of various studies published by the Spanish electricity and gas regulator (Comisión Nacional de la Energía). In particular, it is worth mentioning the comparative study CNSE OI002/99, published in the internet site http/wwwint.cne.es/pdf/OI001_99.pdf. The Comisión Nacional notes in paragraphs 20 and 30 of the report that prices of electricity in Spain for the years 1997 and 1998 have fallen. The Commission is not aware of the studies carried out by the Comisión Nacional and mentioned by the Honourable Member where it is allegedly stated that prices of electricity have increased in Spain both for 1998 and 1999.

The Commission also notes that the Comisión Nacional has, on various occasions, provided the Commission with various charts and figures that show again that nominal prices of electricity have fallen by 7,8 % for domestic consumers, and by 12,1 % for industrial consumers. Differences between these figures and those calculated by the Commission are probably due to the use of a different methodology. In particular, prices used by the Comisión Nacional include the tax on the Spanish electricity for 1998 and 1999, whereas the figures from the Commission are tax excluded.

(1) COM(2000) 297 final.