Iberdrola in court on suspicion of manipulating electricity prices

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Iberdrola

MADRID – This week the trial against energy company Iberdrola starts in the Spanish national court. It is accused of artificially inflating electricity prices in 2013.

This is the first lawsuit against an energy company in Spain on suspicion of manipulating electricity costs. Among the accused are Ángel Chiarri, then director of energy management, Gregorio Relaño, in charge of optimisation and resource management, José Luis Rapún, in charge of asset management, and Javier Paradinas, in charge of short-term markets and global generation.

Plaintiff’s demands

The Public Prosecution Service against Corruption is demanding a fine of almost €84.9 million against the company. In addition, a prison sentence of two years and a fine of 12 months with a daily rate of €400 are requested for the four directors involved. It is further demanded that the accused pay a maximum of €107.3 million in damages to the affected parties.

Consumer rights organisation Facua, a consumer rights protection organisation, is one of the private plaintiffs. They demand a prison sentence of three years for the directors and a fine of €107.5 million against the company.

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The heart of the matter

According to the indictment, between November 30 and December 23, 2013, Iberdrola Generación unlawfully increased the electricity prices of their hydroelectric power stations on the Duero, Sil and Tajo rivers. This would have been done by stopping production, officially due to drought, causing demand to shift to more expensive combined cycle installations.

This act would have increased the price by €7.156 per megawatt hour (MWh). Moreover, this would have resulted in a total damage of more than €107.3 million. The company itself would have had an alleged benefit of €21.2 million.

The trial could set a precedent in the Spanish energy sector. Furthermore, it could have far-reaching consequences for the regulation of the energy market. Iberdrola itself has not yet responded to the accusations.

Also read: Iberdrola empties water reservoirs during drought

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