A race against time in the adjustment of the price of gas that reaches its equator

At what point of the "chrono" towards the adjustment of the price of gas and its consequent effects are we? On Saturday, May 14, Royal Decree-Law 10/2022, of May 13, was published in the Official State Gazette, which temporarily establishes a mechanism for adjusting production costs to reduce the price of electricity in the wholesale market, which includes -among other issues- the famous gas price cap mechanism.

Although the rule was published in the BOE indicating that it came into force from the day after its publication, the provisions regarding the adjustment mechanism will not unfold their effects until the Order with the authorization of the mechanism is published in the BOE itself. by the European Commission.

It is at this moment when we ask ourselves if it really is a team stage, or if we are experiencing its individual modality. Fifteen (working) days have passed since the publication of the Royal Decree-Law without the authorization being issued by the European Commission.

It is interesting to remember the provisional nature of the figure of the Royal Decree-law, which requires going through a validation and approval procedure before the Congress of Deputies within thirty days of its enactment. Therefore, within the next fifteen (working) days -until June 24-, the Royal Decree-Law must be submitted, in its entirety, for debate before the Congress of Deputies for its validation and approval or, in your case, derogation.

Given this situation, a series of questions of interest arise: if the approval of the European Commission has not arrived when the Royal Decree-Law is validated, would the adjustment mechanism produce its effects? What if the Congress of Deputies repeals the Royal Decree-Law having received authorization from the European Commission for the adjustment mechanism?

Regarding the first of the issues raised, it should be noted that the Royal Decree-Law is already producing its effects regardless of whether or not it is validated by the Congress of Deputies, except as regards the adjustment mechanism. According to the second paragraph of the eleventh final provision, the start date for this will be determined by the Order publishing the authorization of the adjustment mechanism by the European Commission.

Regarding the second of the questions, having received authorization from the European Commission, the gas price adjustment mechanism could be applied from the date indicated in that authorization. This is regardless of whether or not Royal Decree-Law 10/2022 has been submitted for validation and approval by the Congress of Deputies.

However, this validation process can result in approval or derogation (non-validation). In the event that the Congress of Deputies decides not to validate the Royal Decree-Law, it will cease to produce effects from the day on which the non-validation agreement is published in the BOE -as required by the Regulations of the Congress of Deputies-. But, until that date, the Royal Decree-law has been unfolding its effects according to its content.

In short, very different scenarios could concur -some of which would be completely outlandish-: Undoubtedly, the ideal scenario is for this validation to go through the Congress of Deputies, having received authorization from Brussels -this seems to be the roadmap intended by the Government - although nothing would prevent the Congress of Deputies from deciding not to validate the Royal Decree-Law, despite this authorisation.

In this scenario, the adjustment mechanism would have the technical authorization of the European Commission, but the regulatory text that would give it protection in the national legal system would have ceased to deploy its effects, and therefore could not be applied. The Council of Ministers, where appropriate, would have to approve a new Royal Decree-law as long as the extraordinary and urgent need required by the Spanish Constitution (article 86.1) continues to concur, which legitimizes the Government to resort to this type of provisional legislative provisions.

Another scenario would be that Royal Decree-Law 10/2022 was not validated by the Congress of Deputies and the authorization of the European Commission arrived later. In this scenario, which is undoubtedly unlikely, the effects would be similar to those described in the previous paragraph. Spain would have the approval of Brussels to apply a mechanism that, however, would not find fit in the national legal system due to the lack of an adequate legislative provision.

One last question that we all ask ourselves, what if the Commission does not approve it? What if you add changes to the text?

We are at the halfway point of a time trial with a horizon that proposes alternative scenarios and that predicts that the coming weeks will be key to the future of the long-awaited and acclaimed mechanism for adjusting production costs to reduce the price of electricity.