Spanish Companies Hit by Energy Sector Overhaul

The overhaul of Spain's energy sector impacted most power companies traded on Madrid Stock Exchange. The first day of the working week extended losses from Friday. 

Rajoy’s government announced on Friday it would introduce measures to reduce the gap between regulated power prices and generation costs.

The Spanish government will promote price rises (3.2% in electricity bills for consumers) and cost savings measures, such as a cut in the fees charged by companies distributing and transporting electricity. The government will also scrap subsidies to renewable power producers. 

According to Reuters, Spain has a €26 billion ($34 billion) power tariff shortfall “created by years of mismatched energy prices and costs.”

"We are looking to correct a key imbalance in our economy," Deputy Prime Minister Soraya Saenz de Santamaria said on Friday.

Some measures came into effect over the weekend, while others will be gradually introduced.