SPAIN’S Council of Ministers formally approved a price cap on Friday that limits gas prices used to produce electricity.
The 12-month concession granted by the European Union to Spain and Portugal needs a final ratification by the European Commission.
That process could take up to a fortnight, according to Ecological Transition Minister, Teresa Ribera.
Once that happens, the measure will be published in the Official State Bulletin and then kick-in the following day.
Teresa Ribera said: โThe cap will start at โฌ40 per megawatt-hour for six months before rising month by month until reaching an average of โฌ48.80 per megawatt hour.โ
The electricity wholesale market price is expected to drop to โฌ130 per megawatt-hour, well below the โฌ200 figure that it has been at for the last few months.
The cap will impact on both domestic and commercial electricity users who have their bills linked to a ‘regulated rate’ tariff.
It’s believed that around 35% of domestic consumers- 10 million people- will benefit.
The change will help up to 70% of commercial electricity users.
READ MORE:
- Reduced power bills coming to Spain after it makes EU deal to slash wholesale electricity prices
- Spain and Portugal team up to propose cap on electricity costs
- Pedro Sanchez announces electricity bill tax cuts will be extended in Spain
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