The government has carried out a reform of the energy market with a new law that pleases nobody; not the consumers and not the big utility companies.

The rise, which will come into effect at the beginning of next month will mean a 3.2% increase, which is the latest hike in a series of prices hikes. In fact the consumer associations point out that the price of electricity has gone up a total of 56% in the last six years.

This latest rise hits on peaje. Anybody that has driven on a Spanish motorway will know that ‘peaje’ means ‘toll,’ so in the case of electricity, we’re talking about ‘transport’ or ‘transmission’ charges, rather than for the units that a consumer actually uses. If we were talking about your land-line telephone, then we are talking about the standing charge for the line, rather than the calls.

This is bad news for second-home owners. In other words, it doesn’t matter that you only use the house a couple of weeks a year, your monthly bill will go up by 3.2% – if it were on what you used, that 3.2% would affect you very little.

What is causing all these price rises is the growing gap between production costs and regulated consumer prices, which this year reaches 4,500m euros. The Minister for Industry, Juan Manuel Soria, says that if steps hadn’t been taken in 2012 and 2013 the gap would have reached 10,000m euros this year.

The problem started back under the Aznar government when the gap was first noticed. He, however, decided that it wasn’t a problem that needed to be dealt with immediately and could be sorted out by a subsequent administration further down the line. Had he actually done something then, when the gap was minimal, we wouldn’t be facing this problem today.

(News: Spain)