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ENERGY COSTS

Government opens inquiry into proposed electricity hikes

Rates due to increase by over 11 percent in January

The government on Thursday asked for a full investigation to see if power companies are colluding to raise the price of electricity after an auction in the wholesale market hiked consumer rates by at least 11 percent beginning in January.

Industry Minister José Manuel Soría called the proposed new rates “unacceptable” and asked the CNMC anti-trust agency to determine if there has been a “manipulation of prices.” If the CNMC finds any irregularities, Soría said the auction will be declared void and a new one will be held.

At Thursday’s auction, the price of electricity increased by 26.5 percent, meaning that electric bills are set to rise by 10.5 percent. On top of that, the government plans to raise the regulated component for determining electricity rates by two percent. As a result, consumers will see an increase in their electricity bills next year of between 11 and 13 percent.

The cost of electricity has risen an average 4.5 percent this year, with hikes of 3.0 percent in January, 1.2 percent in July, 3.2 percent in August and 3.1 percent in October, only partial offset by a fall of 6.7 percent in April. Including the expected rise in January, electricity rates have increased by 80 percent in the past decade.