Energy companies could face penalties reaching up to 60 million euros if they attempt to trade electricity without properly considering or reporting the state-imposed natural gas reference price. The mechanism is designed to flag false or misleading information in customer contracts, in line with the royal decree approved by the Cabinet and published in the Official State Gazette this weekend.
The enforcement effort aims to prevent manipulation of the market. The pricing framework was established after a lengthy debate that followed Council of Europe discussions, and it has already exacted a heavy cost on participants. The policy set a starting price of 40 euros per megawatt-hour for six months, with a scheduled increase of 5 euros each month, culminating at 70 euros by the end of the term.
Projections suggest that next year could mark the final period during which the mechanism operates, unless changes are made. The royal decree confirms that the mechanism will go into effect in the coming weeks after approval from the European Commission.
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In tandem with Brussels’ final decision, energy firms have five working days from the decree’s effective date to present contracts to the market operator OMIE. They must indicate which energy portions sold to end customers are tied to term hedging instruments. Firms will have seven additional working days to adjust their systems and align data sharing with the cost of setup.
The term hedging instruments may be exempt from compensation because gas prices do not move within the market, having been secured at a fixed price in advance. However, operators must demonstrate convincingly that the data are accurate. Presenting false or inaccurate information constitutes a serious breach under Electricity Sector Law and can incur fines ranging from 6 to 60 million euros. Such breaches may also threaten their status as market intermediaries. The National Markets and Competition Commission (CNMC) is charged with verifying, analyzing, and auditing all submitted information. [attribution: CNMC guidelines and EU regulatory body notes]
How will the gas price ceiling affect consumers?
When the mechanism is activated, a two‑week horizon is expected before penalties for related generation assets are enforced. This includes combined cycle plants, coal, and select cogenerators, all subject to the upper gas reference price set by government offers and corresponding purchasing offers. The decree underscores that such violations will be treated as very serious, involving potential discontinuities in system programming by market intermediaries tasked with coordinating the purchasing units to avoid winding the adjustment mechanism across multiple units. [citation: national energy regulation framework]