The acquittal in the Iberdrola case raises questions about electricity pricing and market manipulation
The National Court delivered an acquittal in the case involving Iberdrola Generación and four of its executives, ruling that neither the company nor its officers engaged in a crime against the market or consumers through price manipulation. The central criminal judge determined that the actions under scrutiny did not constitute a crime since they were not illegal acts. The court stated, “There is no crime in an action that is permitted by law.”
The prosecution had sought a prison term of three years and 193 million euros in penalties. The decision emphasizes that the case aimed for a broad interpretation of criminal manipulation, an interpretation not applicable here because no action violated the governing principle of legality in criminal law.
Responding to Iberdrola’s defense that it merely responded to market conditions, the judge found it fully proven that Iberdrola exercised its hydroelectric capacity in 2013 within a liberalized market where prices were set freely. The ruling notes that this environment did not justify the assertion that prices were driven to excessive levels. The judge adds, “Frankly, it is very difficult to see a crime here, since the conduct was not prohibited by law.” He notes, however, that the decision can be challenged before the Appellate Division of the National Court.
At the end of the proceedings, the company and the four executives who faced charges since last October and remained in dock until the sentencing hearing on November 30—Ángel Jesús Chiarri, Gregorio Relaño, José Luis Rapún, and Javier Paradinas—were all acquitted. The Anti-Corruption Prosecutor’s Office had accused them of causing economic damage of about 107 million euros, with consumers bearing 96.7% of that impact while the rest fell on electricity marketers.
Other entities, including consumer groups and insurers, had joined in the legal actions. EL PERIÓDICO DE ESPAÑA, part of the Prensa Ibérica group, represented a consumer organization and indicated its legal team is reviewing the ruling to determine whether to file an appeal and how to share the findings with the broader legal team.
The charges alleged that Iberdrola raised its offers to the electricity market, arguing that a staged production pattern among hydroelectric plants and substitutions with gas-fired plants created higher prices, ultimately affecting the broader electricity market.
The ruling includes a review of expert reports presented at the plenary session by experts from the National Markets and Competition Commission (CNMC). It notes that other energy companies supplied hydroelectric energy above 80 euros per megawatt hour (MWh) around the same period, yet those firms were not deemed criminals simply for bidding above 80 euros, because the data did not show illicit intent or illegal conduct.
CNMC’s “futuristic possibility” questioned
The National Court’s decision critiques the CNMC’s accusations as rooted in speculative studies that failed to establish a clear, plausible basis or a consistent procedure. As a result, the analysis was viewed as a temporary framework rather than a solid criminal case. The judge concluded that the objective and subjective elements of the criminal norm could not be proven to the standard required by criminal law, relying instead on subjective estimates from CNMC experts.
The judge underscores that hydroelectric power operated in a free market at the time of the alleged offenses, and three CNMC participants who contributed to the administrative sanctions against Iberdrola Generación emphasized that prices for hydroelectric energy were freely set by all qualified producers. The only apparent constraint was a ceiling of 180 euros per MWh, a limit that was later adjusted in line with European Community requirements.
The court also places credibility on statements from former Industry Minister José Manuel Soria, along with former Secretary of State Alberto Nadal and company employees who supported the legality of the conduct. The ruling indicates that the case did not involve retaliation over missing funds from the General State Budget to cover the electricity deficit. Instead, it notes that the statements by Soria and Nadal reflected tensions common to energy sector participants but not fundamentally out of line with others in the industry.
Overall, the decision suggests that the events in question occurred within a competitive energy market framework, where prices fluctuated in response to supply dynamics and regulatory signals. The acquittal preserves the view that the conduct, while scrutinized, did not meet the threshold of criminal manipulation under existing law, and it leaves open questions about how such cases might be pursued or distinguished in the future by regulators and courts.