Renta 4 | On Friday, the Spanish regulator CNMC published a consultation on the methodology for calculating the financial remuneration rate for electricity transmission and distribution activities, and natural gas regasification, transmission and distribution, and establishes the financial remuneration rate applicable to electricity transmission, system operation and distribution activities in the 2026-2031 regulatory period.
The draft financial remuneration rate is 6.46%. A period for comments is now open until 4 August. During this period, the Ministry must issue a report on the suitability of the proposal in relation to its energy policy guidelines (published on 31 October 2024). Subsequently, after analysing the comments received, the CNMC will prepare a new proposal that will be sent to the Council of State for its opinion. The deadline for issuing the opinion will be two months if it is processed as a general procedure and 15 days if it is processed as an urgent procedure. Finally, taking into account the opinion of the Council of State, the final approval of the new Circular will be carried out, scheduled for the end of the year.
Assessment: Although this consultation is an important step towards ensuring that the financial remuneration methodology is appropriate for the future challenges of the energy sector, promoting necessary investments and protecting consumers, we will have to wait for the response from companies and other market players, and their comments on possible changes. The proposed rate is in line with our forecasts, which put it at 6.5%. We will see if any changes are made in the coming weeks.
With regard to other relevant points of the regulation, such as remuneration for work in progress or the updating of opex and capex standards, we will probably have to wait until the final document is published at the end of the year. These changes could indirectly lead to an improvement in remuneration.
The companies affected by these changes, in order of importance, are Redeia (underweight, target price €18.40), Endesa (hold, target price €27.40), Naturgy (underweight, target price €26.10), and Iberdrola (hold, target price €16.60).
