Spain Starts Trial Into Iberdrola’s Alleged Price Manipulation

(Bloomberg) -- A Spanish court is set to probe allegations that a unit of Iberdrola SA and and four of its executives manipulated electricity prices a decade ago.

Prosecutors are seeking a €85 million ($89.6 million) in fines from Iberdrola Generacion SA and two years of jail time for the executives from the Madrid court. A private complaint from consumer rights group Facua seeks three years in prison and a penalty of €107.5 million.

The trial is set to run until Dec. 1, according to a court document prepared for trial. Any verdict can be appealed in a higher court. 

In 2015, Spain’s markets watchdog sanctioned the company for taking advantage of high power tariffs to inflate above market levels the price of electricity produced by three hydro-power plants throughout December 2013 and preventing its sale on the wholesale day-ahead market.

This led to a reduction of the plants’ output, prompting its replacement with gas-fired combined-cycle plants, the most expensive generation technology.

The regulator imposed a €25 million fine that the company has appealed. Iberdrola Generación “will make the case that it acted appropriately at all times,” a spokesperson told Bloomberg News Tuesday.  

As part of the investigation, the Civil Guard, one of Spain’s two main law enforcement agencies, in 2017 raided Iberdrola’s headquarters in Bilbao and Madrid looking for evidence, newspaper El Pais reported. A spokesperson for the agency didn’t respond to a request seeking comment. 

Two of the executives named in the complaint — Angel Chiarri Toscano and Gregorio Relano Cobian — have denied the allegations in court, Spanish news agency Efe reported Tuesday. It gave no details about the other two — Jose Luis Rapun Jimenez and Javier Paradinas Zorrilla.

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