ENGGY Enagas SA (PK)

   By Nathan Allen 
 

Spain's National Commission on Markets and Competition said Friday that it has submitted draft proposals for a new way of calculating the compensation received by utilities for operating the country's gas and electricity grids.

The commission, known as the CNMC, has sent the drafts to all affected companies, which have until August 9 to submit their comments.

The proposals are the first step toward establishing new regulatory frameworks for Spain's electricity and gas markets, which are due to come into force in 2020 and 2021 respectively.

Shares in Madrid-listed gas companies fell sharply Thursday after Spain's Cinco Dias newspaper reported that the drafts include a potential 30% cut to the remuneration received by gas distributors. Analysts at Bankinter said investors were expecting a milder cut of around 15%.

Naturgy Energy Group SA (NTGY.MC) and Enagas SA (ENG.MC), the two companies with highest exposure to Spain's regulated gas market, are down more than 4% since the Cinco Dias report was released. Naturgy said it will present its views on the proposal during the presentation of its first-half results on July 24.

Around 37% of Naturgy's earnings before interest, taxes, depreciation and amortization comes from Spanish gas and electricity networks, while Enagas generates 75% of Ebitda from Spanish gas transportation, according to Bankinter.

Write to Nathan Allen at nathan.allen@dowjones.com

(END) Dow Jones Newswires

July 05, 2019 08:29 ET (12:29 GMT)

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