In a few weeks, the President will be appointed by the Ministry of Economy as the head of the INE (National Institute of Statistics). He will need to confront one of the most significant data changes that Executive wanted to encourage with his successor. It was the incorporation of free electricity rates into the calculation of CPI (Consumer Price Index) to up-date the data, adjust it to reality, or improve the inflation records.
Juan Rodriguez Poo abruptly resigned from Statistics after several months of disputes with Nadia Calvino. However, the new position will face two major challenges: the CPI, and the GDP.
The INE still publishes monthly data on inflation that does not accurately reflect the electricity prices paid by millions of consumers. The most popular product in the shopping cart is electricity. Therefore, the INE has spent months formulating a way to include all electricity contracts on the official CPI register.
As the institution has always acknowledged, it is difficult technically. These free market contracts were so important that the INE sought to include them in the official inflation data for January. Six months later, it doesn't. According to Statistics sources, it was "impossible" at that time.
This is a difficult question. The records do not include free contracts. This means that some prices are left out. The INE has been able to determine the actual price of electricity by keeping track of their exact costs, which is the euro per kWh. This figure is not possible in the case where free contracts are available, as it depends on each company's information.
Vice President Calvino believes that this situation leads to "a rapid transmission of inflation." Every euro that the kwh (PVPC), of the regulated rate (PVPC), is raised directly raises the IPC. According to Calvino, it implies "an overweighting" of one rate.
It is essential that the data of electricity companies be provided in order to incorporate these large numbers of contracts, which exceed 16 million across Spain. Calvino, despite not having done so, has used the opportunity to demand that companies, particularly energy companies, "put their shoulders to work", lower the cost of electricity, and provide the INE the data required to end the over-weighting of the gas price in the CPI to accurately reflect the price for electricity.
Calvino's dart actually had Iberdrola as its recipient. He stated that after months of trying to get this information, "there is a company who has not provided the data" and that everyone needs to work together to lower fuel prices so that wholesalers can be less expensive and that the IPC accurately represents real prices.
Incorporating free rates doesn't necessarily mean a dramatic reduction in inflation. This is especially true in the context of rising energy costs. It can, however, support the CPI data.
The data was so complex that companies requested an extension to the term. They hope that the information will then be made available to the INE within the shortest time possible. However, that day is still not here. Since more than two decades, electric companies have proposed the disaggregation and adjustment of the CPI. This would take into account fixed-price agreements as well as the regulated rate.
Free electricity contracts are distinguished by the stability of the prices that companies apply to clients. However, it all depends on the case. The validity of these contracts is typically one year in advance of the variations to the regulated.