National Supreme Court judge Ismail Moreno led a case against Iberdrola Generación, a subsidiary of the multinational Iberdrola. The dispute centers on an artificial rise in electricity prices between November and December 2013. The company reported profits that month, while households faced higher costs, with prices rising above the market norm in a period of sustained tension in the electricity sector, according to an order dated May 26 that was accessed by El Periódico.
The head of the central court granted the continuation of proceedings following a complaint filed in 2017 by the Anti-Corruption Prosecutor’s Office. In 2015, the National Markets and Competition Commission (CNMC) fined Iberdrola 25 million euros for allegedly manipulating electricity prices. The prosecution identified four directors as participants in the events: Ángel Chiarri, then director of energy management; Gregorio Relaño, responsible for optimization, resource management, and commerce; José Luis Rapún, head of wealth management; and Javier Paradinas, in charge of short‑term markets and global generation.
The investigation, carried forward by the prosecutor known as Voz in the source materials, concluded that the artificial price increase occurred between November 30 and December 23, 2013. The company offered power from its hydraulic plants along the Duero, Tajo, and Sil basins to push prices above the daily market level. Prices generated by these hydro facilities were placed above those of the most expensive plants, and the price dynamics were aligned with demand to push up the day‑ahead market. Gas-fired plants, with higher operating costs, contributed to a price range that exceeded the typical energy price in the market; hydro plants in particular showed prices between 45 and 55 euros per megawatt hour, while other technologies followed the same market rules, creating a broad impact on the overall price structure.
The prosecutors stated that these actions led to an increase of roughly 7 euros per megawatt hour in electricity prices, causing losses to buyers estimated around 105 million euros. The file suggests that these events could constitute a crime under the applicable law. The ruling, which could be appealed, accepted the charges under domestic jurisdiction, and the parties were given ten days to request the opening of oral proceedings.
Sources from Iberdrola describe the case as a normal cycle within the regulatory framework, framed as an administrative dispute between the CNMC and the company, with no criminal consequences. They also note that Iberdrola submitted analyses from external experts at an early stage, arguing that no economic damage to the market had occurred. These statements imply that the company sees this process as an administrative matter rather than a criminal one.
Emptying the reservoirs
The situation stands in stark contrast to the company’s actions last summer when reservoirs at Ricobayo (Zamora) and Valdecañas (Cáceres) were emptied. Questions linger about how Iberdrola could benefit in more than one scenario. The explanation points to two factors: a broad diversification of production facilities and the structure of the electricity market. Hydropower economics are governed by opportunity cost, meaning its price tends to be lower than the most expensive thermal plants. Hence, when natural gas costs rose sharply, hydroelectric generation was increased to maximize revenue from this technology.
Reducing hydro production during the cold season, a tactic that mirrors what happened in 2013, effectively allowed the more expensive technologies, such as widely used combined-cycle plants, to set the price. Other generation technologies within Iberdrola’s portfolio, including nuclear and renewables, benefited from this price mechanism. The electricity market operates on a marginal pricing model; every technology pays the same price for a given time, determined by the balance of supply and demand, which means all generators face the same market signal in a given hour.
The CNMC noted that Iberdrola Generación’s hydroelectric offers, when aligned with the opportunity-cost approach for hydraulic production, would not exceed certain price thresholds. In days when the day‑ahead market price is above 80 euros per megawatt hour, the policy would allow adjustments that could lower the market price during peak hours. The commission described the merit-order effect as a key factor in how hydro capacity could influence daily price peaks, suggesting that hydro output could cap prices on high-demand days, while other technologies would still receive adequate returns within the same framework. The ongoing discussion highlights how regulatory thresholds and market dynamics interact in determining the final price seen by consumers, as explained by CNMC analyses.
The broader takeaway from the case is the tension between competitive pricing and organizational strategies within a diversified generation portfolio. The central question remains how much influence hydroelectric generation should have on the day‑ahead price, and at what point such influence becomes a matter of regulatory concern rather than market efficiency. As the proceedings unfold, observers in Canada and the United States track the case for lessons on price discovery, market manipulation safeguards, and the resilience of energy markets under stress. The CNMC’s findings emphasize the importance of transparent cost structures and independent verification in maintaining fair competition within the electricity sector.