(Adds market impact, company reimbursement, Italy)
* Govt to redirect 2.6 billion euros from companies
* Gas price growth capped at 4.4% in Q3
* Endesa, Iberdrola to take 1 billion euro hit
MADRID, Sept 14 (Reuters) - Spain's cabinet passed emergency
measures on Tuesday to reduce sky-high energy bills by
redirecting billions of euros in extraordinary profits from
energy companies to consumers and capping increases in gas
In the first such broad response in Europe, where wholesale
prices have doubled in a year, Spain plans to limit the profits
that hydropower and other renewable power generators can make
from surging electricity prices.
The government expects to channel some 2.6 billion euros
($3.1 billion) from companies to consumers in the next six
Energy Minister Teresa Ribera told a news conference the
measure would remain in place until the end of March, when
natural gas prices are expected to stabilise after consumption
falls from winter peaks.
Analysts at RBC capital markets estimated leading utilities
Iberdrola and Endesa would take revenue hits
of about 1 billion euros from the measure. Endesa shares fell
5.1% by the closing bell.
The impact on Naturgy and EDP would be
about 200 million and 65 million euros respectively, RBC said.
In parallel, Spain will use an extra 900 million euros it
expects to raise by auctioning carbon emission permits this year
to reduce bills, citing high market prices as the reason for the
With voracious demand for natural gas accounting for much of
the recent increase in European power prices that have stoked
inflation, Spain will limit regulated price increases for the
fuel at 4.4% in the third quarter, compared with forecasts for a
Ribera said the measures under the "shock plan" would slash
the average consumer's monthly bill by 22% until year-end.
Though companies will have to shoulder the higher costs
while the measures remain in place, they will be reimbursed
through higher tariffs later, meaning the overall cost to them
will be neutral, the ministry said.
Still, Spain's nuclear power association said the new
measures would make nuclear plants financially unviable and
provoke a total shutdown of the industry.
The left-wing coalition government has been under pressure
from the opposition and civil society organisations to reduce
electricity bills as spot prices, which make up around a third
of consumer power bills, have broken records for weeks.
Prime Minister Pedro Sanchez announced on Monday that a
special electricity tax would drop to 0.5% from 5.1% until the
end of the year, while a reduced VAT rate and the suspension of
a 7% generation tax would be extended until January.
Altogether, the measures will reduce government revenues by
around 1.4 billion euros in 2021.
Italy is also looking at energy sector reform to combat an
expected 40% increase in retail power prices in the next
quarter, Reuters reported on Tuesday.
($1 = 0.8472 euros)
(Reporting by Nathan Allen and Belén Carreño
Additional reporting by Jesús Aguado
Editing by Philippa Fletcher, David Goodman and Lisa Shumaker)