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Spain’s govt steps in to halt record rise in power prices

MADRID

Spain’s government is slashing energy taxes as a part of a package of measures aimed toward driving down household electricity costs, which have surged to record highs in recent months and triggered an outcry.

Prime Minister Pedro Sánchez said his government wants to curtail what he called energy companies’ “exceptional benefits” under current fiscal and energy regulations.

The goal is to shift fiscal benefits to consumers and also leave a possible sharp increase in gas prices, Sánchez told public broadcaster RTVE in an interview late Monday.

The government says the hikes in electricity bills are driven by spiraling prices of so-called carbon certificates, which give companies the proper to release carbon dioxide; gas imports that Spain must complete its energy mix; and surging power demand in recent months.

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Wholesale electricity prices are quite 250% above one year ago, consistent with private Spanish news agency Europa Press.

Surging domestic prices also are a problem in other European countries, with Spain’s environment minister recently sending a letter to the ecu Union’s Executive Office of the President stressing the necessity to reform the bloc’s electricity market.

The galloping prices increases have brought public anger and pressure on the govt from consumer associations.

Sánchez said that among other measures his government intends to scrap a 7% tax on power generation. Utility companies expire the value of that tax to their customers. A separate energy tax is to be move 0.5% from 5.1%

Further details are thanks to be announced after a cupboard meeting Tuesday.

The measures drove down the share prices of energy companies on the Madrid stock market Tuesday. Shares in Endesa, Spain’s biggest energy company, fell by 1.7% in early trading.

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