CNMC Proposal Sparks 2 Billion Euro Market Loss in Spanish Utilities; Redeia Profits Stable, Telefónica Fined 20 Million Euros

The Comisión Nacional de los Mercados y la Competencia (CNMC) has sparked tensions between electricity and gas companies over the financial remuneration of their networks. The regulator's draft proposal on network remuneration has led to a sharp decline in the stock prices of electric utilities, with Endesa being the most affected among Ibex 35 companies. The sector collectively lost nearly 2 billion euros in market value following the CNMC's proposal, which diverged from industry expectations. The CNMC is also pressing forward with an investment plan involving 8 billion euros in network infrastructure. Meanwhile, the electric sector continues to face challenges, including declines linked to setbacks on anti-blackout legislation. Redeia, a key player in the electricity transmission sector, reported stable half-year profits of approximately 270 million euros and stated it does not anticipate incurring provisions related to recent blackouts, asserting that Red Eléctrica de España (REE) acted diligently. In other regulatory actions, the CNMC fined Telefónica 20 million euros for failing to meet commitments made during its 2015 acquisition of DTS. Additionally, the CNMC has provisionally approved the acquisition of Lineage Spain Transportation by Mutares. On the corporate front, Colbún reported reduced revenues and profits in the second quarter due to lower energy sales and capacity.