Electricity prices have shown historically high levels and significant volatility, leading to the bankruptcy and disappearance of several smaller energy providers in recent years when they lack the financial backing of larger groups. Over the past three years, more than 80 independent marketers ceased operations in the Spanish market, according to the official list of electricity marketers maintained by the National Markets and Competition Commission CNMC. While the register reflects a steady stream of new registrations in that period, it is accurate that about 150 companies were registered and roughly 520 trading entities are currently active in the market.
The collapse of electric companies creates clear disruption for customers and generates substantial financial impact on the electricity system itself. When a marketing company fails, its customers enter a transitional last-resort contract with one of the major electricity providers such as Iberdrola, Endesa, Naturgy, Repsol, or TotalEnergies. These providers offer regulated electricity tariffs set by law to prevent customers from losing supply during a transition.
The regulated tariff, known as the voluntary price for small consumers, PVPC, is reserved for customers who have contracted electricity below 10 kilowatts. This category traditionally included households and micro businesses, though a reform removed this tariff from some segments beginning in January. PVPC also covers small and mid-sized enterprises with contracted power between 10 and 249 employees. In practice, many large customers who had contracts with bankrupt marketers and then automatically signed PVPC do not qualify for the tariff because their actual consumption exceeds household levels and their supply remains under a commercial agreement.
Under these circumstances, large users face an additional charge of 20 percent on their bills while they remain under the last-resort tariff or until they enter into a new contract with a free-market supplier aligned with their consumption profile. The rise in the rate of company closures amid the energy crisis and subsequent price spikes has driven a rapid increase in the cost recognized in this category in recent years, as reported by energy authorities and system monitors. The government is currently calculating these impacts for the ongoing year, with projections indicating a notable rise in related costs as part of the electricity tariff framework for 2024. Official estimates point to a combined effect of hundreds of millions of euros over a multi-year horizon, reflecting the broader stability costs embedded in the system and the precautionary measures financed through the tariff structure.
Millionaire’s extra cost
According to electrical system layout reports prepared by the CNMC, the extra cost borne by large customers has grown in tandem with market disruptions. The number of affected individuals has surged since the energy crisis began, rising from 7.2 million in 2021 to 63 million in 2022, and then to 67 million in 2023. The government is assessing these trends as part of the ongoing tariff planning process, with projections for the current year indicating continued pressure on the system. The Ministry of Ecological Transition has prepared a draft electricity tariff order for 2024 that acknowledges these dynamics, suggesting that the additional charges could amount to tens of millions of euros in the near term. In total, the anticipated extra costs over a three-year window are substantial, reflecting broader structural changes in the electricity market and the way costs are allocated among consumers.
Customers who are not eligible for the regulated tariff and who fall under PVPC while not under a direct corporate contract do not pay the same prices as typical PVPC customers. Current law still mandates a 20 percent surcharge on all components of the electricity bill. This surcharge is levied across the system to fund regulated costs that benefit the entire market and support maintained reliability for all consumers.
Customers who pay this 20 percent premium over standard PVPC rates fund the cost paid to marketing companies that have access to the distribution network. The marketing entity collects these amounts and remits them to the distribution company, the entity that operates the networks delivering electricity to residences and businesses. The distributor accounts for these payments as revenue allocated to the electricity system, helping finance the regulated costs borne by all consumers within the market. This mechanism ensures continued investment in grid infrastructure and the orderly operation of a reliable electricity supply for households and businesses alike.