Iberdrola has a new judicial front. Another court of National Court has taken Iberdrola Generacion and four managers to the National Court for manipulating electricity prices using the reservoirs.
The order issued by Ismael Mostno, the investigating judge, has ended five years of investigations and suggested to the Criminal Chamber that the accused be tried for crimes against consumers and the market. This alleged criminal operation resulted in profits of 21.5 millions euros for the company and damages to consumers of approximately 100 million as a result of the increase in electricity prices.
In this resolution, the head of the Central Court of Instruction number 2 agreed to continue the proceedings of the abbreviated process (similar to processing), of a case that started in 2017 following a complaint by the Anti-Corruption Attorney’s Office. The instructor explained that all the procedures, including the entry and registration at Iberdrola Generacion Headquarters in Madrid and Bilbao are sufficient to close the investigation.
The Ibex 35’s largest company by market capitalization – who has already received a fine from the CNMC of 25 million for a very serious offense – stopped production at hydroelectric plants of the Tagus, Sil and Duero rivers at the end 2013 in order to increase the cost of electricity. These were some of the facts Anti-corruption gathered in its complaint. It pointed out that Iberdrola had created and implemented a system to raise the price for the energy it sold, and it did so without a legitimate reason.
These actions were allegedly repeated last year with the emptying the Ricobayo (Zamora), and Valdecanas(Caceres), reservoirs. This led to the withdrawal of programming for multinational plants.
The magistrate explained that the price of electricity in 2013 was not more than 70 euros per megawatt-hour (MW/h) during the weeks preceding the alleged price manipulation. However, between November and December that year, there was a demand of 15,000 gigawatthours (GWh). This reduction in energy reservoirs led to an increase in energy prices of approximately 7 euro per megawatt/hour. This caused damage to demand that reached 105 millions.
The instructor also devotes a large portion of his car to the sanctioning dossier that was opened to Basque multinational in CNMC to this matter. He explains that the National Court, having reviewed all of the facts, considered it important to examine how the decision was made in Iberdrola Generacion and who executed it.
Iberdrola Generacion employees gave statements to the Judicial Police after they seized a lot of documentation. These witnesses provided crucial information about price manipulations and areas responsible, which allowed the court clarify a chain command and to charge four directors: Angel Chiarri, the person in charge Energy Management; Jose Luis Rapun, the head Asset Management; and Javier Paradinas, his counterpart in Short-Term Markets and Global Generation.
The multinational claims that the investigation found an “administrative discrepancy” between the CNMC & Iberdrola. Independent experts have also confirmed that there was no economic harm to the market. The Chamber has the right to appeal against the decision of the judge.
