The judge proposes to judge Iberdrola for inflating the price of electricity with the reservoirs

The investigation has lasted five years after a complaint from Anticorruption and a fine from the CNMC to the company of 25 million

Matthew Balin

New judicial front for Iberdrola. After the investigation of the president of the electricity company, Ignacio Galán, and a subsidiary of the energy company in the 'Villarejo case', another court of the National Court has shown the bench to four managers and Iberdrola Generación for manipulating the price of electricity with the use of the reservoirs between the months of November and December 2013.

In an order, the investigating judge Ismael Moreno has put an end to five years of investigation and has proposed to the Criminal Chamber to try the accused for crimes against the market and consumers. The alleged criminal operation generated profits for the company of 21.5 million euros and damage to consumers of about 100 million due to the rise in the price of electricity.

The head of the Central Court of Instruction number two agreed in this resolution to continue the procedures of the abbreviated procedure (similar to processing) of a case that began in 2017 after a complaint filed by the Anti-Corruption Prosecutor's Office. The instructor explains that the procedures carried out over all these years, including an entry and registration at the Iberdrola Generación headquarters in Madrid and Bilbao, are sufficient to conclude the investigation.

The largest company on the Ibex 35 by market capitalization - which has already accepted a fine of 25 million from the CNMC for a very serious infraction - cut production at the hydroelectric plants of the Duero, Sil and Tagus rivers at the end of 2013 to raise the price of electricity. These are some facts that Anticorruption collected in its complaint, in which it noted that "in order to profit illegally" Iberdrola devised and put into operation a system to increase the price of the energy it sold and without legitimate cause to justify it.

These actions, which were allegedly repeated last summer with the emptying of the Ricobayo (Zamora) and Valdecañas (Cáceres) reservoirs, determined the withdrawal of the programming of the multinational plants.

police record

In the case of the 2013 episode, the magistrate explains that in the weeks prior to the alleged price manipulation, the offer did not exceed 70 euros per megawatt hour (MW/h), while between the end of November and December of that year the demand was 15,000 gigawatt hours (GWh). The consequence of this reduction in reservoirs was the increase in the price of energy by approximately 7 euros per megawatt/hour, which generated damage to demand that reached 105 million.

In addition, the instructor dedicates a good part of his car to the sanctioning file that was opened to the Basque multinational in the CNMC for this matter. In this regard, he explains that, in view of all the facts collected by the regulatory body, the National Court considered it "important" to investigate how this decision was made within Iberdrola Generación as well as who executed it.

The Judicial Police seized abundant documentation and took statements from Iberdrola Generación workers. The witnesses provided key information about these price manipulations and the responsible areas, which allowed the court to clarify a chain of command regarding these decisions and charge four of its then directors: the person in charge of Energy Management, Ángel Chiarri; the former head of Resource Management and Trading Optimization, Gregorio Relaño; the head of Asset Management José Luis Rapún; and his counterpart in Short-Term Markets and Global Generation, Javier Paradinas.

Against the criteria of the investigators, the multinational has defended that it is an "administrative discrepancy" between the CNMC and Iberdrola and affirms that independent experts can prove that there was no economic damage to the market. Against the order of the judge there is an appeal before the Chamber.

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