Soria and Nadal testify as witnesses in Iberdrola’s price manipulation in winter 2013
The former Minister of Industry José Manuel Soria testifies this Wednesday as a witness in the trial against Iberdrola Generación, a subsidiary of the Iberdrola Group chaired by Ignacio Sánchez Galán, for the alleged manipulation of the price of electricity in the last weeks of 2013, in relation to the suspension of the Cesur electricity auction in December of that year. On the same day, the former Secretary of State for Energy, Alberto Nadal, also attends the National Court’s headquarters in San Fernando de Henares (Madrid), also as a witness.
The central criminal court is trying to clarify whether there was an alleged crime against the market and consumers related to the alleged artificial increase in the price of electricity in the winter of 2013, and Iberdrola Generación and four of its then directors and employees are accused in the case.
José Manuel Soria’s testimony will focus on statements he made in January 2014 in the energy committee of the Congress of Deputies, in which he linked the increase in the energy component of the December electricity auction, which was eventually cancelled, with the withdrawal of the planned budget contributions to the electricity system.
Soria and the withdrawal of contributions to the electricity system
On that day, Soria assured that the wholesale market price rose by 15.8% since the PP presented the amendment that withdrew 3.6 billion in budgetary contributions to the system – and which implied recognising a tariff deficit in 2013 for the same amount – on 29 November, and on the day of the auction, 19 December.
The price increase recorded in the wholesale market in December had an impact on the Cesur auction for tariff supply, which closed with an increase in the energy component of 25.6 %, which would have meant a rise in electricity prices of more than 10 %.
In that context, the National Markets and Competition Commission (CNMC) decided not to validate the auction, which led the government to suspend its application and set a 2.3 % increase in the tariff for the first quarter of the year.
The then minister also noted that in the days following the auction the wholesale price plummeted by 11.2 %, although he avoided establishing a direct “cause-effect” relationship.
Anticorruption blames Iberdrola Generación for manipulating the electricity market to raise prices
The prosecution claims that Iberdrola Generación, “with the aim of causing a rise in the price of electricity and harming consumers, devised and implemented a system to increase the price of the energy it sold beyond that which should result from the free concurrence of supply and demand”.
Following that increase in the price of electricity, the CNMC opened administrative proceedings against Iberdrola Generación and imposed a fine of 25 million euros – which the company has appealed – although it pointed out that it was not a criminal offence.
Anticorruption requests a fine of almost 84.9 million euros for Iberdrola Generación España, and two years in prison and disqualification and a fine of 12 months with a daily quota of 400 euros for the individuals involved in the case.
The consumer organisation Facua is also involved in the case, as a private prosecutor, and is requesting three years in prison for the directors and a fine of 107.5 million euros for the company, equivalent to five times that profit.
