Matute: Cutting electricity VAT to 10% is a band-aid

Matute attacks the electricity oligopoly and the 10% VAT

EH Bildu MP Oskar Matute argues that cutting electricity VAT to 10% is a band-aid that fixes nothing. His thesis, presented at the start of this discussion, is that if demand falls and the market is oversupplied, it makes no sense for bills to keep rising. The response in the thread is a head-on clash between two narratives: one blaming the oligopoly and one blaming the BOE (Spain's energy regulator).

Why do prices rise when there is surplus energy?

Matute poses the paradox underpinning the debate: with falling demand and oversupply, electricity prices should drop, not rise. He concludes that the market does not function as a true market and requires more public intervention. The VAT cut to 10%, he says, only reduces state revenue without addressing the underlying bill.

Against this diagnosis, part of the discussion shifts focus from the oligopoly to the BOE. The argument is that regulations have paved the way for high prices: the closure of coal and nuclear plants, the weight of renewables, and regulatory decisions explain the cost increase more than the utilities' pricing table. The blame, they argue, lies not just with those selling kilowatts.

The 10% VAT and water fees

The tax cut Matute calls a band-aid appears alongside, according to several posts, a reform of water usage fees in the same BOE regulation. The interpretation is that this lays the groundwork for future increases in water bills. The pattern repeats: fiscal relief on one hand, structural price hikes on the other.

Some go further, pointing to bailouts. They recall that the State has rescued utilities and motorways, while small entrepreneurs who close within a month receive nothing. The asymmetry between rescuing big companies and leaving small ones to fend for themselves is a key theme.

Lemóniz, the bill still being paid

The most technical part of the debate concerns nuclear energy. It is claimed that the Lemóniz plant was finished and only lacked fuel when it was halted, and that its dismantling cost €6 billion, nearly one trillion pesetas. This figure, they argue, has been paid through electricity bills for years.

The discussion moves to the real cost of nuclear power. One view holds that its LCOE (Levelized Cost of Energy) is higher than any commercial technology and that it cannot be built without subsidies. Another counters that LCOE is an abstraction and what matters is the kWh produced, with capacity factors of 90-95%. Olkiluoto, Flamanville, and Hinkley Point C are cited, noting a 35-year contract indexed to inflation that would equate to about €130 per MWh today.

---

Iberdrola's Basque roots and the narrative of plunder

Another front of the debate is corporate. It is argued that the biggest energy mafia is Basque and that Iberdrola was born from the looting of a public company, Iberduero, using foreign reservoirs and with Lemóniz in the background. The irony is clear: the party denouncing the oligopoly points to a company rooted in its own territory.

The conversation gets tangled in cross-accusations about who really holds power. Some see utilities dictating energy policy. Others see the Government legislating by decree to raise electricity costs and then blaming the market. Mutual distrust prevails, and hard data is scarce.

Who pays for the nuclear party?

The article closes with the question no one fully answers: if nuclear is so cheap, why is it only built where the State guarantees the price? Hinkley Point C has a 35-year contract indexed to inflation. Olkiluoto and Flamanville suffer from cost overruns. And in Spain, Lemóniz remains on the bill.

The unsettling fact: Lemóniz's dismantling cost €6 billion, nearly one trillion pesetas, and this money has been paid via electricity bills. Meanwhile, the debate over the 10% VAT still sounds like a mere band-aid.