December 4, 2019 / 8:54 AM / 3 months ago

Spanish watchdog softens plans to cut gas distribution returns

MADRID, Dec 4 (Reuters) - Spain’s competition regulator has proposed a smaller reduction to the returns gas distribution companies are allowed to receive on their investments.

Spain regulates income from the transport and distribution of gas and electricity by fixing the companies’ rate of return.

Under the new plan, proposed late on Tuesday, returns for gas distributors would fall by around 9.6% on average, compared with initial plans for a cut of 18%, the CNMC said. Total compensation for the sector would drop to around 1.28 billion euros from 1.42 billion euros.

Companies such as Naturgy, Madrileña Red del Gas, Nortegas and Redexis will be among the most affected by the regulation.

CNMC said the latest proposal was a response to the negative reaction to its earlier plan, which prompted a sharp selloff in utility stocks when it was released in July.

The new methodology would govern company returns between 2021 and 2026 and forms part of a broader shakeup of how remuneration for the gas-and-power sector is calculated.

Companies have 15 days to submit feedback on the new plan, the CNMC said. (Reporting by Nathan Allen. Editing by Jane Merriman)

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