A subsidiary and four executives are being prosecuted for allegedly devising a system for artificially boosting prices in the midst of a fall cold spell, a practice that caused $107 million in consumer losses
Iberdrola Generación, a subsidiary of the Spanish energy multinational, has deposited €192 million in bail with the National Supreme Court in the event of a conviction in the case investigating the artificial price hike in 2013. The company, as a legal entity, and four executives are being prosecuted for devising and executing “a system” to change electricity costs amid a cold wave that damages consumers of some 107 million. The company tried to evade a millionaire’s deposit – one of the highest in memory – before the hearing, but the central court of instruction number two rejected this claim.
Judge Ismael Moreno agreed to open an oral trial on July 11 for facts under investigation in 2017, following a complaint from the Anti-Corruption Bureau. The prosecution continued its proceedings after the National Markets and Competition Commission (CNMC) fined the multinational leader of the Ibex-35 of 25 million for these events in 2015. A payment that will be suspended until the case is resolved through criminal proceedings for the alleged “fraudulent manipulation” of electricity prices in late 2013.
In the absence of a trial date, expected in the spring of 2023, the criminal court will investigate whether there has been a crime with regard to the market and the consumer. According to the judge, sufficient evidence has been accumulated in the five years of the investigation that would prove that Iberdrola Generación (as a legal entity) and its directors launched a plan “to increase the price of energy sold” with the aim of “an increase of cause the price of electricity and harm consumers.
Moreover, in said resolution, Judge Moreno has imposed a bond on the suspects, which must be paid jointly and severally of EUR 192,231,272. Specifically, 84,891,272 euros would be used to pay the fines and the remaining 107,340,000 euros in civil liability, i.e. in possible damages to the sellers of electricity and the rest of the natural and legal persons proving the damage caused by the increase in electricity in the period between November 30 and December 23, 2013. In case of acquittal, the amount will be fully refunded.
Now Iberdrola has guaranteed the 84.8 million for the fines imposed, as well as a fifth of the civil liability, while the insurance companies have covered the remainder. All this after the Criminal Chamber rejected his appeal against the order to open the oral procedure, and more specifically against the obligation to deposit the large sum demanded before the trial.
Coincidentally, the subsidiary responsible for producing electricity through the construction, operation and maintenance of generating plants has not objected to the judge’s decision to take it to court at the so-called “tariff” of 2013. The company’s legal team, which has always defended the legality of its actions and, based on this, claimed the file months before the end of the investigation, decided not to appeal the prosecution.
As for the investigated managers, the Public Prosecution Service for the fight against corruption is demanding a prison sentence of two years and a fine of 144,000 euros. This is the person in charge of Short-Term Markets and Global Generation, Javier Paradinas, who is responsible for preparing market offers based on a range of parameters: hydraulic contributions, reservoir levels, fuel costs or plant availability. This area of Iberdrola Generación held “weekly planning” meetings with other departments to determine the cost of electricity, the heads of which were José Luis Rapún (Asset Management) and Gregorio Relaño (Optimization, Resource Management and Trading). They were all hierarchically dependent on the Central Power Generation Office, led by Ángel Chiarri.
Iberdrola has defended that the price of electricity at the end of 2013 was characterized by “high demand, low wind energy production, unavailability of nuclear power plants and high gas prices in international markets.” In that sense, he emphasized that less product was offered on those dates and that the market price increased due to “force majeure” of the company, such as water scarcity.
On the other hand, Judge Moreno believes that at the end of 2013 “artificially” and “without any legitimate reason to justify it”, the price of the electricity supply corresponding to its Duero, Sil and Tajo hydropower plants has risen. A conclusion reached after the practice of numerous procedures, such as the testimonies of the former Minister of Industry José Manuel Soria and his number two, Alberto Nadal; or after studying the reports of the CNMC, Red Eléctrica de España or the Spanish Meteorological Agency (AEMET).
Source: La Verdad
I’m Wayne Wickman, a professional journalist and author for Today Times Live. My specialty is covering global news and current events, offering readers a unique perspective on the world’s most pressing issues. I’m passionate about storytelling and helping people stay informed on the goings-on of our planet.
