Spanish Government Speeds Liberalization

The Spanish government has taken further steps to increase competition in its energy, telecom and services sectors.

In electricity, it will limit the dominance of Endesa, the former state-controlled operator, and free all electricity consumers to choose their sup-plier starting in 2003 - four years earlier than planned. The government also will prevent Endesa, which generates 40% of Spain's electricity capacity, from increasing output in the country for five years.

Iberdrola, Endesa's main competitor that produces more than 20% of the country's electricity, will be barred from growth in capacity for three years. In return, the government has agreed not to cut electricity prices early, and has set a maximum 9% reduction in regulated domestic rates over the next three years.

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