Electricity at The Expense of the Countryside and Industry

In full electoral stress, the PSOE chooses to process an inactive measure in Congress for more than a year that benefits middle and high incomes

Inflation, and the price of electricity, suffocates Spanish families and also suffocates the Government because none of the measures promoted so far has given the good results that were announced it would have. 

The gas ceiling does not pull either, for the moment, and in the midst of electoral stress, President Pedro Sanchez's team has chosen to process "in extremis" the Electricity System Sustainability Fund (FNSSE), after keeping it sleepy in Congress for more than one year.

The Government seems to want to mute the doubts about the gas cap and convey the feeling that it has the situation under control, and an answer to the problems, but it is silent that this latest reform could lower electricity but at the cost of raising the between 7 and 8 cents per liter and also raise the gas bill for citizens and companies. 

It would also cause serious territorial imbalances between income sectors, favoring the urban and upper-middle-income classes over the rest of society. Everything suggests that seeing the result of the debut of the application of the gas ceiling, in which instead of lowering the price of the "pool" it has risen, the coalition Cabinet now wants to use the FNSEE to lower the electricity bill at the expense of putting a new tax on fuels and natural gas.

In other words, through a transfer of income from electricity consumers to citizens, farmers, taxi drivers, and businessmen who fill the tanks of their cars or tractors or use gas in their production processes. The new “card” that the Government is now pulling out of its sleeve is a zero-sum game because the trap is that some customers will pay less at the cost of others paying more.


The FNSSE consists of financing the cost of renewable energy, which today is paid by electricity consumers as part of the tolls. This cost will be s borne by citizens when they fill up gasoline or diesel for their vehicles or by companies, such as potters or steel mills, that use natural gas in their business.

It is paradoxical, to say the least, that, at the same time that gasoline is being subsidized with aid of 20 cents per liter, and without this measure containing the rise in fuel prices, the new departure of the Government implies making fuels even more expensive ( 7 cents each liter of gasoline).

Electoral Urgency of the PSOE

In a hurry, the Government will launch the process next week because it wants to have the issue resolved before the summer. From the most affected sectors, the message has already been sent that the territorial impacts must be calibrated and the general interest must prevail over the electoral urgency of the PSOE, which needs to enter next fall, forcing the machinery to place above two digits the reduction of the electric bill.

This project also limps along the flank of territorial equality. The transfer of costs between sectors will cause a redistribution of income in favor of consumers who are mainly electric, urban, from the temperate zone, and upper-middle-class against the rest of society.

For example: 

The Spaniard who lives in a cold zone and has a tractor will pay more to heat his house and more for fuel to maintain his way of life, agriculture. And those who live in warm areas and make intensive use of air conditioning or a second home on the coast will pay less on their electricity bills.

The Calculation of Who Pays the FNSSE:

In fact, as the draft bill is articulated, the calculation of who pays the FNSSE is linked to the level of income you have and the place in Spain where you live. When the Government began to point to this reform more than a year ago, the first reports already appeared, such as the one on The Ecological Transition against depopulated Spain and vulnerable households (Sedigas, 2021), which warned of the serious inequalities that this fund would cause in your application.

According to technical studies, the annual energy bill would increase by 220 euros in areas with low population density, compared to 161 euros for more densely populated areas.

The measure has a regressive character because it would reduce more in percentage terms the income of households with less income. In addition, a greater impact on communities such as Castilla y León, Navarra, Madrid, or La Rioja would be confirmed, which would range between 261 euros and 234 euros of the annual increase in the energy bill per household.

This reform would have, in short, an impact as relevant as tax reform. But yesterday Minister Rivera pointed, sideways, to the decision to process it to lower the light more. In the affected sectors, they interpret that what leads the Government to announce an extension of the discount of 20 euro cents per liter of gasoline and, at the same time, approve the FNSSE,

which charges 7 cents for each liter of gasoline, is the fear of little success that the intervention of the electricity market will have. Blowing and sipping at the same time, with results, moreover, neutralized and non-existent for citizens.

The report of the draft law itself recognizes that the total amounts are not modified: 

Only the payment of these costs between the energy sectors is reconfigured. The alliance for the competitiveness of the Spanish industry has calculated that the application of this proposal would suppose a blow of 2,500 million euros to the sector.

The president addresses the food crisis:

The President of the Government, Pedro Sánchez, met yesterday with the Ibero-American Secretary-General (SEGIB), Andrés Allamand, with whom he discussed the consequences of the war in Ukraine, especially the food crisis. 

During their meeting in La Moncloa, they also discussed the ecological transition as a way to combat the effects of climate change, which "seriously" affects the countries of the region, according to the Executive. 

In this regard, the president conveyed to Allamand Spain's "constructive and incontestable" support in his new stage at the head of the Ibero-American General Secretariat and the Government's commitment to the next Ibero-American Summit, which will be held in March of the next year 2023 in the Dominican Republic with the motto “Together towards a fair and sustainable Ibero-America”.

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