The plenary session of the board of directors of the CNMC the four circulars on the remuneration of electrical networks for the period 2026-2031, one of which, the one relating to the new methodology for calculating distribution remuneration, was lying down last week by the Council of State, considering that it violates the Electricity Sector Law. Specifically, by limiting investments with the right to remuneration, making them depend on future demand and because it is an essential and universal activity that cannot carry risk.
Precisely, the plenary session had met again today on an extraordinary basis (it already did so on Friday) to seek a way out of the crisis opened by these “essential objections” raised by the Council of State, since correcting them would imply a new hearing procedure and the return of the legal text to the advisory body, for which there is no longer time. The rule establishes that if the circulars are not approved before January 1, the current remuneration would be extended for another six years.
According to a press release sent this evening, and in relation to the circular in question, the CNMC indicates that “the opinions of the Council of State have been obtained, whose observations have been especially taken into account in the process” and “the opinion of the Ministry for the Ecological Transition has been requested on five occasions.” Without hardly specifying what changes have been introduced, the statement indicates that the approved circular “is aligned with the Government’s investment limits, rewarding all investments up to 0.13% of GDP with audited values.” On the other hand, “the sustainability mechanism is reformulated and is limited only to those investments intended to respond to demand included in the planning of the transportation and distribution networks.”
With the first measure, the CNMC intends to address the first objection of the Council of State: aligning profitable investments with 100% (instead of 80%) of the investment limit currently in force, the aforementioned 0.13% of GDP. And to respond to the second objection (the sustainability scheme that incorporates the element of risk), the circular maintains it in the event that a state regulation that allows it comes into force.
Regarding the substantive objections of the Council of State to the aforementioned circular,: approve it “after hearing the Council of State”, that is, without changes, which would mean acting “in absentia”; leave the proposal without effect and extend the current remuneration model, which dates back to 2014, or approve it “in accordance” with the opinion of the Council of State, introducing some minor, but not “essential” changes, according to sources familiar with the text.
This is the option that has triumphed, as the president has the support of the majority of six councilors, out of a total of ten, but which could lead to administrative litigation on the part of the electricity companies due to a lack of form. Business sources warn that the situation that could arise is serious, “because a remuneration model could be annulled in court without having another to replace it.”
Faced with the criticism received regarding the processing of the circulars, the CNMC maintains that “it has followed a guarantee and participatory procedure”, with “seven prior public consultations, five public hearing procedures and numerous meetings with companies, consumers and other agents in the sector.” According to the press release, the circulars have been debated 69 times in the CNMC council until their approval” and considers that “a balance has been achieved between promoting investment in networks, maximizing their use and consumer protection.”
Regarding the circular of the new Financial Remuneration Rate (TRF), for which the CNMC had raised 6.58% compared to the minimum, the Council of State has not questioned it, so the CNMC could approve it on date. However, regarding the second circular, the president of the Commission and the director of Energy instruction, Rocío Prieto, had proposed to the council to make minor changes to avoid the hearing process and return the text to the Council of State. According to the organization, the new TFR, “which is raised by 100 basis points compared to the current one, provides regulatory certainty, facilitates investment planning and reduces volatility.”
Light tolls
The CNMC had gone ahead of itself by approving (dated last Thursday the 18th and published this Monday in the BOE) the resolution establishing access tolls to electrical transportation and distribution networks for 2026. It so happens that, just as the circulars that determine the remuneration and unit values of high voltage transmission for the new regulatory period 2026-2031 had already been approved by the CNMC, those mentioned on distribution had not yet received the approval of the plenary session. Neither the one relating to the new TRF for the next six years nor that of the remuneration model for the activity proposed by the CNMC and objected to by the Council of State.
Although they have finally been approved, the truth is that next year’s electricity tolls have been calculated according to remuneration methodologies that were still in legal limbo. This is clear from the resolution published in the BOE this Monday, which is full of unknowns in the shape of an X. Thus, the text points out, the distribution remuneration corresponding to the 2026 financial year complies “with the investment scenarios included in the report that accompanies the proposal for circular XX/2025, of XX of XX, of the CNMC, which establishes the methodology for calculating the remuneration of the electricity distribution activity in the version sent to the Council of State.”
It so happens that the resolution of the tolls that consumers pay on the electricity bill was approved by the plenary session on Thursday, December 18, when the CNMC had not yet received the opinion of the body chaired by Carmen Calvo, on the controversial circulars, and its position was unknown. Did you trust that the Council of State’s ruling would be favorable?
