FACUA finds ridiculous the fine imposed to Iberdrola for manipulating the price of electricity

The association considers that the 25 million Euros penalty imposed by the CNMC does not have a deterrent effect to prevent frauds of this magnitude from happening again.

FACUA finds ridiculous the fine imposed to Iberdrola for manipulating the price of electricity

FACUA-Consumers in Action finds absolutely ridiculous the 25 million Euros fine imposed by the National Commission on Markets and Competition (CNMC, according to its initials in Spanish) to the company Iberdrola Generación for manipulating the price of electricity.

The organisation considers outrageous that such a serious offense is settled this way, since this penalty does not have a deterrent effect to prevent frauds of this magnitude from happening again.

Specifically, this fine refers to Iberdrola's actions regarding the price increase of the offers of the hydroelectric plants of the Duero, Tajo and Sil rivers, between the 30 November and 23 December 2013. Due to the suspicions that the company had manipulated the market, the Government decided to change the whole system used to set tariffs and to stop the Cesur auctions for the acquisition of energy that took place 19 December 2013, to prevent the electricity price from increasing all of a sudden almost 11%.

FACUA calls the Government to intervene and put an end to speculation and abusive tariffs and to set the prices fully based on the real costs of energy production.

Increase of 7 Euros per MWh

The CNMC's report states that Iberdrola’s manipulation happened in a context where the market stood "already in high prices and in a scenario of high demand". In addition, the Competition authority notes that Iberdrola’s behaviour caused an increase of the price on the daily market of approximately seven Euros per Megawatt per hour (MWh).

Considering this, the CNMC estimates that Iberdrola’s profit due to this manipulation of the price was 21.5 million Euros, and the impact on the whole demand is considered to be 105 million Euros.

This is why the Government decided to intervene and set an average increase in electricity of 2.3% for the first quarter of 2014.

In a previous report, the CNMC insisted that the auction took place in "atypical circumstances" that prevented it from happening in an environment of "sufficient competitive pressure". This led to an investigation of the circumstances of the auction and the behaviour of the agents that took part in it.