September 2013
MRG’s first bond issue on the capital market
In September 2013, and within the framework of the refinancing of its financial debt, MRG debuted in capital markets with a €500 million bond issuance maturing in September 2018. In December 2013, the company launched a second issuance for €275m of ten-year bonds. The funds obtained from the bond issuances, both rated investment grade by Standard & Poor’s and Fitch, were used to prepay the outstanding bank debt facilities of MRG. These transactions have allowed a reduction of financial costs and an extension of the average tenor of the company financial debt.
October 2013
Second Convention on Natural Gas for Mobility
For the past two years MRG has had a representative on the board of the Spanish Association of Natural Gas for Mobility (GASNAM). Transportation is the most fossil fuel-intensive sector of the economy, and hence the largest producer of emissions. Compared to the steps taken in the industrial and domestic sectors, almost nothing has been done in this domain. So in the coming years the transportation sector must face this reality head-on to decrease energy intensity, particularly in major cities such as Madrid. The difficulties are wide-ranging – a lack of natural gas-powered vehicles, reluctance from oil companies , a slow rate of licensing for natural gas service stations, lack of awareness, political apathy, and an absence of incentives, particularly when compared to alternative energy sources. Yet again, Spain is behind its European peers in terms of adoption of natural gas for transportation purposes (see table), and is burdened by high natural gas pricing (see chart). The reality is the market is not working and energy policymakers need to come up with fresh answers.
MRG has set in motion a new initiative: building six natural gas service stations in the Madrid region. We have replaced a large proportion of the natural gas vehicle fleet and will continue to drive development in this area, which we believe is vital to bringing down atmospheric emissions and the energy bill.
December 2013
Corporate restructuring
During the fiscal year ending on June 30, 2014, the company completed its corporate reorganization that started during the acquisition processes of both MRG and MRG II. As the final step, on December 17, 2013 the merger of Madrileña Red de Gas, S.A.U. (merging company) and Madrileña Red de Gas II, S.A.U. (merged company) was registered in the Madrid Mercantile Registry.
The merger was concluded with minimal impact on end consumers and supply companies – after a three-month long systems project, and a review of contracts and purchase orders with our suppliers.
The merger allowed for administrative synergies in the operational areas of the company, and specifically for shorter timeframes for work completion certification, billing and regulatory reporting.
February 2014
New website
In our bid to reach out more effectively to end users, we launched the new Madrileña Red de Gas website, tailored to consumer needs. The new, fresh design makes it easier for users to find the information they want. They can access the online office to view meter readings, usage statistics, and the state of progress of queries and complaints, all in real time. We have also updated our written content to explain our processes clearly and concisely.
We cross-publicized the launch of our new website through all our existing channels (call center, inspection notices and meter reading reports) and monthly traffic has gone up by 33%.
The website now also includes an investor relations section providing relevant financial data.
February 2014
Fourth anniversary of Madrileña Red de Gas
2014 is MRG’s fourth year of operation. It is time to mark the emergence of a new distribution company, and celebrate its having grown to become the country’s third-largest distributor overall, and the leading independent distributor. Over this period, we have grown our business from 38 municipalities to 59. We have increased our distribution network by 233 km and installed 4,000 new connection points. In addition, we supply two natural gas service stations.
The figures show we are delivering on our commitment to the Madrid region, and we shall continue our growth policy by making natural gas available throughout the territory in support of enhanced industrial competitiveness and replacing costlier and more pollutant energy sources, such as liquefied petroleum gas, diesel and electricity.
Our successes over the past four years have been aided by our installation partners and their business association, Asefosam. We have also been supported by our partners and suppliers, and the Madrid region’s Department of Industry and Mining, which has provided ongoing guidance and monitoring. The Madrileña team is grateful for all this support, and is firmly committed to achieving its targets in the near future.
March 2014
Gas Balance andAllocation
The Resolution of February 7, 2013 of the Directorate General of Energy Policy and Mining, amending the technical management standards NGTS-06 Allocation and NGTS-07 Balance, and Protocol PD-02 Allocation Procedure at Transportation-Distribution Connection Points, prompted us to review all our procedures for gas balance and allocation in new municipalities and bring them in-house. This step required us to train our people and implement new software applications.
Since the changes were introduced, MRG has achieved 99% compliance with the daily protocol. We are now ready to adopt these procedures across the entire network by January 1, 2015, the date of the split between the Gas Natural Fenosa and Madrileña Red de Gas networks.
Article 14 of Order IET/2446/2013 establishing tolls and fees for third-party access to gas facilities and the remuneration of regulated activities provides that the distributor must calculate metering differences at transportation/distribution and distribution/distribution connection points. The introduction of this statutory instrument has required MRG to change the way it calculates definitive allocations and measurement differences throughout its entire distribution zone from the former area-based method to the transportation/distribution connection point approach. This development has prompted a review to ensure that all our network connection points are correctly located, and the updating of our IT applications.
March 2014
Agreement with the Parque Azul residential development in Colmenarejo
Our signed agreement with the Parque Azul development lays the groundwork for installing facilities to make natural gas available to the largest residential estate in Colmenarejo – 388 households will now use natural gas as their primary energy source. We have made a related investment of over €450,000 in network and other facilities to replace the old liquefied petroleum gas infrastructure.
2013 – 2014
Extension of our partnership deal with the Asefosam association of installers
Madrileña Red de Gas has extended its partnership deal with Asefosam, originally signed in March 2013, to boost the marketing effort arising from our public offering for signing new connection points in the fields of vertical saturation and the retail market. New measures have been introduced to encourage Asefosam installer members to market new natural gas connection points. 420 installation firms are now publicly offering the natural gas option, making for an 8% increase year-on-year.
2013 – 2014
Cooperation deals with municipal authorities
In line with our natural gas promotion policy, Madrileña Red de Gas has signed an agreement with Parla City Council and energy service companies. As a result, throughout 2013 we have provided natural gas supply to 25 schools, arts centers and sports facilities managed by Parla City Council.
We have also entered into cooperation agreements with the municipal authorities of Alcalá de Henares, Móstoles, and Collado-Villalba, and
energy service companies.
In addition, as a result of Madrileña’s determined marketing efforts this year, infrastructure is being put in place to make natural gas available to the public buildings of the El Molar and Torrelodones municipal authorities.
Moreover, a tender has been put out
for the gasification of all the centers
and facilities under the control of San Lorenzo de El Escorial City Council, and a plan is underway to build 2,000 m of network piping to supply natural gas
to the Felipe II residential estate in that municipality. MRG is building a new supply antenna for the Quijorna municipality, projected to start in
February 2015.
2013 – 2014
Cooperation agreement to implement the Madrid region’s subsidized equipment replacement scheme
As an initiative to improve equipment safety and energy efficiency by the gradual replacement of collective boilers and gas-fired industrial machinery, MRG has extended the lifetime of its cooperation agreement originally signed in 2012 to implement the Madrid region’s subsidized equipment replacement scheme. Madrileña has accordingly invested €420,000 to provide installation discounts. This initiative encourages efficient energy use.