The trial of Iberdrola Gestión for allegedly manipulating electricity prices starts this week
The headquarters of the National Court in San Fernando de Henares (Madrid) will host from Tuesday the trial against Iberdrola Generación España, a company of the multinational Iberdrola chaired by Ignacio Sánchez Galán, for an alleged crime against the market and consumers related to the alleged artificial increase in the price of electricity in the winter of 2013.
According to its indictment, the Anti-Corruption Prosecutor’s Office requests a fine of almost 84.9 million euros for Iberdrola Generación España, as well as two years’ imprisonment and disqualification and a 12-month fine of 400 euros per day for the then four executives involved in the case.
Anticorruption also proposes that the defendants compensate up to a maximum of 107.3 million euros – the amount of the alleged damage to demand – jointly and severally to several marketers and natural and legal persons who prove that they have been affected, including end consumers of energy.
For the Public Prosecutor’s Office, 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”.
To achieve this, it continues, between 30 November and 23 December 2013, it “increased, without legitimate cause, the price in the electricity bids corresponding to its Duero, Sil and Tajo hydroelectric plants”.
It did so at a level “above the daily market price that prevented the operations from being matched, despite the increase in electricity prices on the spot market on those days, which placed it at an optimal opportunity cost”.
Four Iberdrola Gestión executives sit in the dock
Faced with this situation, these plants stopped producing, explains Anticorrupción, which points directly to the then management of Iberdrola Generación, made up of the director of energy management, Ángel Chiarri; the head of optimisation, resource management and trading, Gregorio Relaño; the head of asset management, José Luis Rapún; and the head of short-term markets and global generation, Javier Paradinas.The prosecution believes that they made a series of energy offers that caused “the reduction of electricity generation of these plants, and, as a consequence, that the purchase operations were matched with energy from combined cycle plants, which cost more”.
The prosecution believes that they made a series of energy offers that caused “the reduction of electricity generation of these plants, and, as a consequence, that the purchase operations were matched with energy from combined cycle plants, which cost more”.
According to their calculations, the “artifice devised and carried out” by the defendants would have raised the price of electricity by at least 7.156 euros megawatt hours (MWh), which caused a damage to demand of more than 107.3 million euros.
If we take into account the volume of energy that Iberdrola Generación dispatched during the days under investigation, some 2,965.8 gigawatts (GW), the alleged profit would amount to 21.2 million euros.
The consumer organisation Facua is also involved in the case, which is the 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 the profit.
