Madrileña Red de Gas has begun its tenth year of activity and, in a few months’ time, will therefore celebrate its tenth anniversary. It is a good time to take stock of the company’s achievements and assess its vision for the future.
Over the last ten years, the energy sector in Spain has undergone a more than remarkable change. Regulation has also changed in direction as a result of new climate and energy policies being implemented. All this means that we will experience changes even greater than before and that, in another ten years, energy companies will be very different to what they are today.
In the time since it received the authorization required to start its activity, Madrileña Red de Gas has established itself as a solid company. It is outstanding in its operational and financial efficiency and its safety, the quality of its operations and customer service. The size of the company has increased through internal growth and successive acquisitions of distribution assets. Today we have surpassed 900,000 active connection points. We continue to initiate activity in new municipalities: from the initial 39 to the current 59. This includes the Municipality of Madrid, the capital where distribution activity is maintained in five districts. This is proof of our commitment to continue investing in making gas available to everyone in Madrid, in order to improve their quality of life and their economy, because of the savings this represents in comparison to other forms of final energy.
In this last year, we have carried out work to improve the network in relation to its segmentation, and a programme to extend telemetry. We have also launched an ambitious fraud detection, correction and prevention programme as a result of the increase that these practices have experienced in the distribution networks, not only for gas but also for electricity. It is a pioneering programme that is providing very positive results.
Finally, good results are being achieved in the extension of gas use in those industrial sectors in which there was clear undeveloped potential. In addition to serving those customers and contributing to the reduction of polluting emissions, this translates into a more efficient use of the network and contributes to the improvement of the Company’s results.
With regard to operational safety, our indicators show a clear improvement, both in absolute terms and in relation to the indexes of comparable sectors.
We have maintained the level of our economic results, despite the impact of the 2014 regulatory reform and the cuts that subsequently took place, with the reduction of the remuneration of some activities (such as the rent of meters) and the opening up of others to competition (such as periodic inspections). These results emerge out of the concern for permanent internal improvement, which translates into reducing costs and monitoring these, without detriment to quality in any area, as has been stated.
Looking now towards the future, our concerns are focused on three main issues: customer service, energy transition and regulation.
In relation to customer service, we have launched a programme to review processes that involve interaction with current or potential customers: contracting, connection work, consultations, billing, breakdowns and emergencies, collections and claims.
Our objective is to simplify processes by choosing the simplest access channels and procedures, so that customers have quick and easy access to the information they need, to billing information, and a quick response to all types of requests: emergency calls for incidents, with a satisfactory resolution within the agreed term, the resolution of claims of all kinds in short terms, the programming of connection or repair works, adapting the response to the specific needs of each customer. This programme is in the development and implementation phase, and we hope to show results at the end of this financial year.
In the next legislature, the Energy Transition Law will be approved. It will establish the objectives and the framework to which the regulation must comply in order to achieve them. In fact, the transition has already begun twenty years ago, with the Electricity Sector (1997) and Hydrocarbons (1998) laws, which have led to the mix of primary and final energy and, above all, the electricity mix, both in terms of power and energy, being already very different from what we had then. However, these changes have had a negligible effect on the oil and gas sectors, on the supply side, and, on the demand side, the industrial, commercial and domestic sectors. The new stage of the transition will be more demanding in its objectives and wider in its scope, so it will affect all sectors of the economy, and also that of natural gas.
Therefore, the manner in which this energy transition is designed and developed is crucial. The future of gas as a clean energy, as a real solution available from today to radically improve air quality in cities (one of the major problems of developed societies) and the role that natural gas can play in mobility, as a very attractive option, owing to the absence of polluting emissions, the autonomy of gas vehicles and the economic savings offered by this fuel, will depend on this. This, in the short term. In the medium term, the development of renewable gas, still in its infancy, can expand the role of gas as an energy solution.
In this sense, Madrileña Red de Gas has been a pioneer in the promotion of applications for motor vehicles and specifically for cars and fleets of buses. Amongst other things, we are the first Spanish company to have a fleet of vehicles that only use compressed natural gas as fuel.
The recognition of our activity in relation to our concern for an intelligent use of energy took place in 2017, with the award presented to us by Madrid City Council for being the most active company in the field of energy efficiency.
Regarding the regulatory framework in which our activity is carried out, we are close to the end of the current regulatory period (2015–2020). The Royal Decree-Law 1/2019 of January 11 gives the National Commission on Financial Markets and Competition (CNMC) competences in the development of the remuneration methodologies of the regulated activities. Consequently, the National Commission on Financial Markets and Competition (CNMC) has announced the drafting, within the first half of the year, of the proposals of those methodologies, which will be crucial for the next regulatory period. It is expected that regulatory stability, essential for investors to continue to see Spain as an attractive country, will be ongoing and without difficulties, and that the activity of the regulatory body will be developed with the necessary permanent consultation with regulated sectors.
It is worth emphasizing that regulation in sectors such as energy requires continuous fine-tuning, which must be carried out on the basis of a continuous dialogue with the actors, who know in detail the complex reality that we must manage on a daily basis, improving and updating the regulations that govern the sector’s operation. Much more so at a time when energy transition can lead to unwanted turbulence, if all aspects are not handled well.
Finally, I would like to mention corporate governance, a field in which we have taken decisive steps in order that Madrileña be at the level of those that are now accepted as best practices.
We have put into operation two committees on the Board of Directors: the Audit and Risk Committee which, in addition to the usual internal audit functions, is responsible for keeping the catalogue up-to-date and evaluating the risks that may affect the company; and the Crime Prevention Committee, tasked with preventing and warning of any problem or vulnerability of the company and work processes in this regard. An evaluation of the Board of Directors has also been carried out, which has resulted in the identification of areas for improvement and the implementation of actions in each of these.
Finally, I would like to express, once again, the company’s gratitude to the shareholders for their support in all action plans, both in the short term and with a long-term vision. And to the management team and all those who dedicate their working lives to Madrileña Red de Gas, in recognition of what has been achieved and in support for all the challenges that lie ahead in the coming years.
Pedro Mielgo
Chairman