Tariffs and the surge in regulated gas rates

Large energy companies are seeing a surge in customers switching to regulated gas rates, driven by government-supported measures aimed at reducing bills. With the market compelled to offer regulated tariffs, often called tariffs of last resort, the major players are experiencing a flood of demand to participate in regulated offerings. This marks a reversal from recent years when the regulated tariff segment shrank and free market tariffs grew.

In recent months, backed by state aid, the big energy groups added at least 442,000 new customers to regulated gas tariff programs, according to internal company data accessed by El Periódico de España from the Prensa Ibérica group.

The leading operator in the Spanish gas market, the retailer of last resort, ended the year with about 190,000 customers in the regulated segment. Iberdrola nearly tripled its home volume on regulated rates, rising from 111,000 customers at the end of September to 300,000 by year’s end. Endesa also expanded its customer base with regulated gas rates, adding 63,000 new registrations in just two months, October and November, with December data still pending. Other groups reportedly faced challenges with transparent contract development, as indicated by industry observers. (Source reports compiled from company data and industry coverage.)

By year-end, nearly two million homes were on regulated gas tariffs, a figure that exceeded expectations set when the government activated its aid plan last October. Meanwhile, customers on free gas market rates—where prices are determined by the companies—remain more numerous. Free-market customers total about six million, underscoring the stronger appetite for deregulated pricing despite the surge in regulated options that are adjusted quarterly based on international hydrocarbon prices. The free market remains the more popular choice for many households.

Tariffs subsidized at 3,000 million

In October, the government unveiled a substantial package to lower regulated gas tariffs, including direct subsidies to the bills of these customers. The More Energy Security Plan includes a 3,000 million euro shield intended to limit tariff increases and to support a new discounted rate for households with central heating in the neighborhood. The contingency measures aim to keep regulated rates affordable through 2023 while expanding coverage to more homes under the program. (Policy briefings and official releases.)

The Ministry of Ecological Transition, led by Teresa Ribera, approved exceptional loans totaling around 3,000 million euros. These funds are projected to help cover the deficit caused by the aid measures through 2023, rather than to finance the measures directly. The government calculates a notable potential gap that could be triggered by the mass shift of customers toward regulated rates, raising questions about long-term financing and system stability. (Government accounting notes.)

CNMC investigation

The National Markets and Competition Commission (CNMC) has opened an inquiry into whether large gas companies are hindering the transfer of customers to regulated tariffs. An information file was activated, and periodic information requests were sent to the major players. Naturgy, Endesa, Iberdrola, and TotalEnergies are under scrutiny for the resources and processes used to handle rate-change requests, following a wave of consumer complaints about waiting times, information gaps, and contracting difficulties. (CNMC statements and industry disclosures.)

As requests to change rates continue to surge, the CNMC broadened the investigation to potential related irregularities tied to customer transfers. Authorities are examining whether providers also hinder switching when customers seek additional services, such as maintenance or emergency responses, from their current supplier. (Regulatory update.)

The government has pushed through a macro-decree on anti-crisis energy measures, requiring providers to terminate additional services when customers leave to join another marketer. The CNMC is auditing compliance with this rule, amid suspicions that it has not always been followed. (Policy instruments and regulator notices.)

Industry participants emphasize the need to strengthen customer service channels to cope with the record volume of inquiries from customers aiming to switch from free to regulated rates. Naturgy has activated an automated migration process for its customers to regulated tariffs via its website, accompanied by an information campaign aimed at keeping current and former customers engaged and highlighting that regulated rates offer the most competitive pricing in the market. (Corporate communications and industry reports.)

Industry complaints

Gas sector players warn about the consequences of policies that overly favor one tariff type. Some argue that the aid plan for regulated rates could disrupt market balance and threaten stability, urging the government to consider measures that lower bills for all customers, not just those on regulated plans. (Industry associations and press coverage.)

The association Sedigas has urged the government to permit any marketer to offer regulated gas rates or to extend similar subsidies to free-market rates, bringing together marketers, the distribution network, and suppliers. (Industry statements.)

Expectations for policy actions have shifted—while faster customer migration was anticipated, actions have not yet materialized. Sedigas supports reducing value-added tax on the gas bill from 21% to 5% through at least the end of 2023, and calls for cuts to other taxes on the gas bill to further ease consumer costs. (Organizational statements.)

The Association of Independent Energy Marketers (ACIE) argues that protections for vulnerable consumers must be targeted to those truly in need, such as households with low incomes. If aid is not restricted to vulnerable groups, ACIE suggests ensuring that benefits reach all customers, not only those in regulated plans. Proposals from smaller energy companies include reducing regulated costs by cutting tolls and fees embedded in the bill. (ACIE position papers.)