Fifty electricity and gas marketers go bankrupt due to rising prices | companies

The sharp increase in the prices of electricity and natural gas, which began their unstoppable escalation in mid-2021, has taken its toll on fifty free-market energy marketers who have had to turn the key, in some cases voluntarily, and in others for having been disqualified by the Ministry of Ecological Transition, at the request of the sector regulator, the CNMC.

The record energy prices recorded in recent months (the wholesale electricity market stood at 223.36 euros/MWh on Saturday and the gas market at €90.97/MWh), has resulted in the loss of 26 electricity and 24 gas marketers since the beginning of 2021 until today, according to the CNMC listings. Most of them are concentrated in the last months of last year and, very especially, in January. Although in some cases the CNMC has urged disqualification for not buying the energy committed to with its clients, in many others it is about voluntary withdrawals that the companies request in the regulator’s registry.

Just as a few years ago there were disqualifications of a good number of pirate marketers, now the reasons are economic. In general, small independent companies buy the energy they must supply to their customers on the daily market at prices contracted before the escalation. Since the risk was not covered by term contracts, they have not been able to fulfill said contracts.

Another reason for bankruptcy is increased cost of guarantees that the electricity marketers maintain with the market operator, OMIE, and the system operator, REE. These guarantees are updated with prices, which has made the situation unsustainable for some.

This is coupled with the increase in invoice returns and defaults by customers and for tax reasons. Although the Government has maintained a cut in VAT on electricity from 21% to 10% since last year, electricity marketers pay 21% to distributors and charge 10% to customers, for which they assume the cost temporarily while They settle with the Treasury.

In the case of the sale of gas, where drops were infrequent unlike electricity, a measure is added that has led to unfair competition: the Government’s decision to limit increases in the regulated market (the rate of last resort or TUR) below 5%, in the last quarter of last year and the first quarter of this year, charged to a future rate deficit. As the ministry pointed out in October, if the price revision formula had been applied and the increase in this fuel had not been limited, in October, the TUR would have become 34% more expensive.

Last week, the CNMC sent to Ecological Transition the proposal to disqualify and sanction five gas marketers, for not complying with the levels of gas reserves appropriate to their client portfolios. Is about Catgas Energia, Foener Energia, CH Cuatro Gas, ADS Energ 8.0 and Adelfas Energia.

In the case of electricity, the hole that is produced by the obligation of the distributors to continue supplying the energy that the marketers do not provide, as soon as the disqualification is resolved, it is paid by the former. At this time, according to industry sources, the distributors (subsidiaries of Endesa, Iberdrola, Naturgy and EDP, mainly) are assuming an imbalance of 50 million euros.

Once the closure of the company has been made official, the clients who leave the company go to a reference marketer (COR), which supplies by law the regulated price (PVC), the most affected by the increases, since it has as a reference the of pool. In addition, if the client is not entitled to the PVPC (because they have less than 10 kW of contracted power), they are transferred to a COR with a 20% surcharge. An incentive for them to go to the free market, where the situation is not very promising either.

400 electricity companies and more than 200 gas companies

Losses among independent electricity marketers, which are small in size compared to the large ones in the sector, have not been uncommon. According to the CNMC list, more than 400 have been registered, many with little activity.

In the case of natural gas, there are about 240 on the free market, but, although the losses have been less common, the current crisis has devastated many of them, especially in the last months of 2021.

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George Holan

George Holan is chief editor at Plainsmen Post and has articles published in many notable publications in the last decade.

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