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Spain ups electricity costs, cuts sector subsidies

MADRID (AP) -- The Spanish government has approved an electricity reform bill in a bid to cover what it says is an annual sector deficit of 4.5 billion euros ($5.9 billion) by increasing consumer prices and cutting subsidies.

Consumers will see invoices rise by 3.2 percent in the coming days, while utility companies will have to drop the amount they charge for the use of distribution networks. Subsidies for renewable energy will be cut by 2.7 billion euros ($3.5 billion), Industry Minister Jose Manuel Soria says.

Spain's main electricity utility companies suffered falls in their stock market values late Friday after news emerged of the government's reform. The cut in subsidies will hit Spanish renewable energy companies particularly hard. Some of them have invested heavily and expanded in recent years.