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Spain’s two main parties reach deal in fight against fuel poverty

Source: El Pais - Tue 27th Dec 2016
Spain’s two main parties reach deal in fight against fuel poverty

Spain’s main opposition Socialists (PSOE) have used their clout in Congress to push the minority government into a deal against fuel poverty. The guarantee of electricity will depend on household income – which is not specified – and extend to the entire year, not just the winter months.

Energy Minister Álvaro Nadal has agreed to tweak existing legislation to include a ban on cutting off electricity from households considered “vulnerable” by the social services.

The conservative administration of Mariano Rajoy has pledged to have the new rules in place within the next three months.

“It is a structural reform and the beginning of the end of fuel poverty,” said Antonio Hernando, the PSOE spokesman in Congress.

In exchange for the concession, the Popular Party (PP) government has secured the PSOE’s support for a reform of the “social voucher,” an electricity subsidy for nearly 2.5 million low-income consumers.

This subsidy – a 25% discount on regular electricity fares for low-income consumers, from pensioners to unemployed families – was canceled in October by the Supreme Court, which ruled that the utilities should receive compensation for the withheld revenues.

The basis for the decision was that the subsidy was discriminatory, as it only affected the five largest companies – representing 94% of industry turnover – but left out the smaller utilities.

Last year, electrity companies contributed €186 million to the “social voucher.”

“The main thing for us is that fuel poverty should be regulated at the national level,” said Pilar Lucio, the Socialist spokeswoman on energy issues. “The State must step in to prevent electricity cuts through regulation.”

Representatives from Spain’s two biggest electricity companies, Endesa and Iberdrola, declined to comment on the deal, saying it would be “premature” to do so at this stage.

“Without a legislative development to the deal, which has yet to happen, we cannot know if it makes any sense,” said a source at Endesa.

This same source said that Endesa no longer cuts off services from any family that cannot afford to pay the bill, particularly when the social services have alerted them to the situation.

The issue of fuel poverty made headlines in November, when an elderly lady from the Catalan town of Reus died in a fire inside her home. The fire was started by the candles that she was using after her electricity was cut off.

Challengers protest

Unidos Podemos was left out of the deal, even though it had made a banner out of the fight for affordable heating.

The leftist group called the deal “a scam” and accused the PP and PSOE of “putting on a show.” Instead, it wants to see a new “social electricity fare” that would extend to more consumers, and lower VAT on electricity bills. Unidos Podemos is also calling for an industry audit.

The other protest party in Spanish politics, Ciudadanos, accused the PP and PSOE of indulging in “a trite two-party system.”

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* Spain's Supreme Court backs renewable energy cuts

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