Law 54/1997, of 27 November, of the electricity sector establishes a model of liberalization for the electricity sector in which the energy is negotiated around a daily market of production.

The Royal Decree-Law 6/2000 of 23 June, of urgent measures to intensify competition in goods and services markets introduces the possibility of negotiation to marketers through bilateral contracts. physical.

The Royal Decree-Law 5/2005 of March 11, of urgent reforms for the boost to productivity and for the improvement of public procurement incorporates the possibility that the distribution companies also negotiate the energy electricity through bilateral contracts with physical delivery.

On the other hand, the evolution of electricity prices in the daily market since the end of 2005 advises the need to push forward in a determined manner the negotiation of bilateral physical contracts, especially in those market subjects belonging to the same business group that go to the daily market with bids for the acquisition and sale of energy simultaneously for the same programming period.

In this provision, it is appropriate to take into account bilateral physical contracts, on the basis of an appeal on the daily market, the quantities of the combined electrical energy of sale and purchase submitted by the latter. subjects, so that they can only participate in the appeal with the net position of the group to which they belong.

Moreover, the internalisation of the value of greenhouse gas emission allowances in the price formation in the wholesale electricity market requires reflecting this situation by undermining the remuneration of the Generation units affected by equivalent amounts. In addition, the high volume of tariff deficits generated in the period of 2006 suggests that the value of the allowances for the purposes of determining the amount of such a deficit is neglected.

The existing risk of high prices in the electricity production market, with its immediate and irreversible negative effects on final consumers, justifies the urgency of the adoption of the measures. contained in this provision and the extraordinary character thereof.

In its virtue, on the proposal of the Minister of Industry, Tourism and Trade, under Article 86 of the Spanish Constitution and after deliberation of the Council of Ministers at its meeting on 24 February 2006,

D I S P O N G O:

Article one. Appeal of offers on the daily and intraday market submitted by subjects of the same business group.

1. Until the regulation is implemented by which the distribution companies negotiate the electric power through bilateral contracts with physical delivery, the offers of sale and purchase of electric power presented simultaneously by (a) subjects belonging to the same business group in the daily and intraday production markets and in the same programming period shall be treated as physical bilateral contracts by the market operator for the matching quantities of sale and purchase, so that those subjects can only participate in the appeal by the net position of the group, which may be alternatively buyer or seller.

2. In order to comply with the provisions of the previous paragraph, only the tenders submitted by facilities of general generation and the takeover bids of the distribution companies shall be included. The Government may amend the offers of sale and purchase subject to such compliance.

3. The procedure for the assimilation of such tenders and their treatment with regard to the technical management of the system are set out in the Annex to this provision.

4. For the purposes of defining the subjects belonging to the same business group, the provisions of Article 4 of Law 24/1998 of 28 July of the Stock Market will be provided.

5. For the purposes of the liquidation of regulated activities of the National Energy Commission, the Government shall determine the provisional price to be considered for distributors by the energy acquired through the assimilation mechanism described in the paragraph one.

The government will also determine the definitive price to which these energy purchases made by the aforementioned distribution companies will be recognized throughout the year in question. This price shall be based on quotations from electricity markets which shall be objective and transparent.

6. The Government is authorised to amend the procedure set out in the Annex to this provision.

Article two. Consideration of the greenhouse gas emission rights of the 2006-2007 National Allocation Plan.

1. As from 2 March 2006, the remuneration for the production of electrical energy referred to in Article 16.1.a) of Law 54/1997 of 27 November 2006 for the purposes of Article 16 (1) (a) of Regulation (EC) No 54/1997 of the European Parliament and of the Council of 27 November 2006 electricity sector, the amount equivalent to the value of the greenhouse gas emission allowances allocated free of charge to electricity producers will be reduced by the Council of Ministers Agreement of 21 January 2005, in accordance with the provisions of the National Allocation Plan 2005-2007, during the corresponding periods.

For the purposes of calculating the amount of any negative balances for the settlement of the 2006 tariff for the period from 1 January 2006 to 2 March 2006, including those negative balances the amounts shall be reduced for each business group to which the undertakings listed in paragraph 1.9 of Annex I to Royal Decree 2017/1997 of 26 December 1997 belong, in an amount equal to the value of the allowances allocated by Agreement of the Council of Ministers of 21 January 2005 to the totality of production units under ordinary arrangements for each business group, during the same period.

2. The reference unit value of the allowances shall be the market price of the period to which they are calculated in a transparent and objective manner.

3. The Minister of Industry, Tourism and Trade is enabled for the regulatory development of this provision.

Additional disposition first. Application.

The provisions of Article 1 of this provision shall begin to apply on 2 March 2006 for the casings concerned as at 3 March 2006.

Additional provision second. Identifying business groups.

Before 2 March 2006, the players in the daily production market shall communicate to the market operator the business group to which they belong in accordance with Article 1 (4) of the present.

Single repeal provision. Regulatory repeal.

As many provisions of equal or lower rank are repealed, they oppose the provisions of this Royal Decree-Law.

Final disposition first. Character of Royal Decree-law.

This Royal Decree-law has a basic character, in accordance with the provisions of Article 149.1.13 and 25 of the Constitution.

Final disposition second. Entry into force.

This Royal Decree-law shall enter into force on the day following that of its publication in the "Official State Gazette".

Given in Madrid, 24 February 2006.

JOHN CARLOS R.

The President of the Government,

JOSE LUIS RODRIGUEZ ZAPATERO

ANNEX

Assimilation of offers to physical bilateral contracts procedure

1. Once the time limit for the submission of tenders for the sale or purchase of electricity in the daily and intraday market is closed and before the appeal is made, the market operator will proceed to take on physical bilateral contracts. tenders submitted by subjects belonging to the same business group for the matching quantities of sale and acquisition in the same programming period.

The market operator shall incorporate in the appeal the tenders corresponding to the net position of the group which have not been assimilated to a bilateral physical contract under the previous procedure, which may be alternatively buyer or seller.

In the business groups which, in the same programming period, have a net seller position, the market operator will assimilate the lower priced sales offers with the full range of the offers from the market. the acquisition of the group; then, the remaining sales offers shall be incorporated into the appeal.

In the event that they have a net buyer position within the same programming period, the market operator will assimilate the higher-priced takeover bids with the full sales offers of the market on a bilateral basis. group; then, the remaining takeover bids shall be incorporated into the appeal.

2. The market operator shall communicate to the subjects the tenders which have been assimilated to bilateral physical contracts and shall be those who shall inform the system operator for the purposes of the preparation of the daily basis of the operation.

The system operator will consider such offers as physical bilateral contracts to perform system technical management.

3. As regards the liquidation of the regulated activities of the National Energy Commission, the provisional price for distributors for the energy acquired through the assimilation mechanism described in the Regulation for 2006 is the provisional price. paragraph 1 shall be the average cost of the 2006 tariff for the energy generated under the ordinary regime for the peninsular territory, including the costs of the adjustment services and the power guarantee, which corresponds to EUR 42.35 /MWh.