Portugal's regulator raises power tariffs 2.7%, blames US-Iran conflict

LISBON, Sept 16 (Reuters) - Portugal's electricity market regulator ERSE said it will raise regulated tariffs by 2.7% for 779,000 households and small businesses from October 1, after a surge in natural gas prices linked to the Iran-U.S. conflict pushed wholesale power costs above forecasts.

• The increase comes after ERSE raised regulated electricity tariffs by 1% on January 1, expecting them to remain in force throughout 2026.

• Despite ranking among Europe's most renewable-powered electricity systems, with hydro, wind and solar sources meeting around 70% of demand, Portugal remains exposed to swings in natural gas prices because gas-fired plants often help set wholesale prices on the Iberian wholesale electricity market (MIBEL).

• ERSE said in a statement late Tuesday that, when it initially set tariffs for 2026, it "had been difficult to foresee the magnitude" of this year's surge in spot prices on MIBEL, shared by Portugal and Spain.

• It said the surge was largely due to the effects of the U.S.-Iran war, which boosted natural gas prices and, consequently, wholesale electricity prices.

• Spot power prices on MIBEL have more than doubled from a year ago, averaging €147.64 per megawatt hour so far in September versus €64/MWh in September 2025, according to data from market operator OMIE.

• The 779,000 Portuguese households and small businesses on regulated tariffs represent only 4.6% of total electricity consumption in the country.

• However, because they can switch between regulated and market-price contracts, utilities take ERSE's rates into account when setting prices for their 5.7 million customers in the liberalised market.

(Reporting by Sergio Goncalves. Editing by Mark Potter)