Spain approves gas cap in European effort to tame price

Bloomberg

Spain approved rules to cap natural gas prices, the most radical effort yet by a European government to contain the rally in energy costs sparked by the war in Ukraine.
The announcement means weeks of back-and-forth between Madrid and the European Union on the plan could be close to an end. Portugal was expected to green-light similar rules.
The planned changes would mark a milestone in European electricity integration by allowing the two Iberian nations to act outside the EU’s common-market rules and intervene in price setting.
The bloc is racing to tame soaring inflation, driven in large part by energy prices that jumped to record levels following the war’s outbreak.
The measure will imply “a very significant reduction” of utilities’ windfall profits, Deputy Prime Minister Teresa Ribera, who’s responsible for the country’s energy policy, said during a news conference. She didn’t directly specify how it will be funded.
The cap is expected to cut the average power price to 130 euros per megawatt-hour from 210 euros, Ribera said. The European Commission, the EU’s executive arm, and the governments of Spain and Portugal had previously reached a preliminary political agreement to cap the price of gas used in power generation for one year. However, implementation was delayed amid negotiations over how the system will work and who will foot the bill.