...More Sustainability, Less Revenues: Fitch Ratings believes that the new remuneration framework for gas distribution, transmission, regasification and storage activities approved by the Spanish government in a Royal Decree (RDL 8/2014) removes major uncertainty around the Spanish gas system's sustainability. The reform implemented in early July solves the incipient gas tariff deficit (TD) issue at the expense of regulated revenue cuts and the removal of inflation-linked yearly updates. Gas Operators Bear Costs: The cost of the reform will be assumed by gas-asset operators as the changes will reduce gas operators' regulated revenues and erode EBITDA margins. The announced initial EUR238m cut (on an annual basis) in gas operators' revenues represents a moderate 7% of the total system costs. The impact on gas companies' credit profiles will vary depending on the nature of their activities, the age of the asset base, the stage of gasification in their respective areas of operations and also...
