Blogs and advice from Industry leading Specialists
Valuable Opinions, Comments & Gossip
Financial related News & Articles relating to Spain
Latest News, Stories
& Hot Topics
Various Tools & Widgets to help with your financial needs
Tools & Widgets to
help with finances
Polls, Surveys and Opinions featured throughout Tumbit
Featured Polls, Surveys & Stats
Discussions, Advice & Topical Chat
Discussions, Advice & Topical Chat

Leading Spanish electricity firm Iberdrola accused of manipulating prices

Source: El Pais - Sat 13th May 2017
Leading Spanish electricity firm Iberdrola accused of manipulating prices

Iberdrola, the Spanish energy giant, allegedly worked to alter the price of electricity and make “an illicit profit of €20 million” during the winter of 2013, coinciding with a cold spell. The accusation has been brought by anti-corruption prosecutor Antonio Romeral in a complaint lodged against the company with the Audiencia Nacional, Spain’s central High Court.

Following instructions from investigating judge Ismael Moreno, the Civil Guard has raided Iberdrola headquarters in Bilbao and Madrid in search of incriminating evidence.

The company says it is “offering complete cooperation,” but denies “having carried out any fraudulent manipulation whatsoever.”

This is the first time that the Anti-Corruption Attorney’s Office has taken an energy utility before a criminal court. The move is based on “a crime against the market and consumers, as per article 281 of the Penal Code,” explains the prosecutor. This article makes provision for prison sentences of one to five years.

In 2015, Spain’s competition watchdog, the CNMC, slapped Iberdrola with a €25 million fine over the same case.

Consumer associations have been complaining for years about rate hikes during the worst of the winter season, and the issue of fuel poverty has attracted headlines in a country with high consumer rates: a Eurostat survey showed Spain ranking in the top five for household consumer prices in 2015 in the European Union.

Electricity companies are the target of much criticism in Spain, where consumer associations have asked why the government does not do more to encourage self-generation by households using solar power.

The company says that its behavior during the winter of 2013 was “perfectly rational and legitimate” and that the competition watchdog interpreted the facts “in a biased and incorrect manner.”

Judge Moreno will now investigate the alleged manipulation that took place between November 30 and December 23, 2013. The allegations created a scandal at a time when Spain was grappling with a severe economic crisis, forcing the government to overhaul the entire system for setting electricity prices in Spain.

Following an investigation, the CNMC fined Iberdrola €25 million in November 2015 for manipulating the Spanish wholesale electricity market.

The competition authority determined that the company had deliberately manipulated the market by playing with the output at its hydroelectric power plants on the Duero, Sil and Tagus rivers. This was done by withholding the amount of electricity dispatched from these plants, even though there were large reserves, thereby causing higher-priced combined-cycle plants to enter the market.

Under the Spanish system of electricity auctions, the most expensive power plant sets the price for all the others. In the end, all plants, no matter what it costs them to produce their own electricity, will follow the most expensive plant. If less electricity is available, for instance because some plants withhold their output, the market price goes up.

The government suspended the electricity auction of December 19, 2013 after noticing “anomalous movements.” The watchdog opened an investigation that resulted in the multi-million euro fine.

The prosecutor wants the judge to take a statement from the legal representative of Iberdrola as part of the preliminary inquiry and to request certified records of the plants’ reserves between 2011 and 2013 from the Spanish national grid, Red Eléctrica de España.

Recommended Reading :

* Iberdrola announces 8 Million smart meter now installed in Spain

* Spain's Iberdrola sees average earnings growth of 6% in 2016-2020

Comment on this Story

 
Be the first to comment on this Story !!