After a legal battle spanning more than a decade, Iberdrola has had a €25 million fine overturned that the National Commission for Markets and Competition (CNMC) imposed in 2015 for artificially manipulating electricity prices. Spain's National Court has annulled the penalty in a ruling dated 8 June, in line with the criminal acquittal the energy company already received just two years ago.

An acquittal that closes a decade-long case

The Administrative Litigation Chamber of the National Court has upheld Iberdrola's appeal, considering that the facts for which the fine was imposed "are substantially analogous" to those already judged in criminal proceedings, according to eldiario.es. In January 2024, the Criminal Chamber had already acquitted the energy company of altering prices during the controversial "tariff hike" of late 2013.

The case dates back to the final months of 2013, when the Popular Party government decided not to cover the €3.6 billion tariff deficit that should have been paid from 1 January 2014. This decision triggered a surge in electricity market prices that directly affected millions of Spanish consumers' wallets and which Iberdrola allegedly sought to exploit.

What exactly did the CNMC accuse Iberdrola of?

The National Commission for Markets and Competition accused Iberdrola Generación—the subsidiary dedicated to electricity production—of artificially raising the prices offered by its hydroelectric power stations on the Duero, Sil and Tajo rivers between 30 November and 23 December 2013. The aim, according to the accusation, was for much of its energy to be excluded from the daily market clearing mechanism in favour of other more expensive power plants, such as gas ones, thereby allowing Iberdrola to obtain an economic profit of €21.5 million.

But the National Court has questioned the very CNMC investigation. The ruling stresses that the procedure "was based on mere estimates" and describes the calculation system used as "ad hoc, created exclusively for this specific case", with "serious deficiencies" and "fundamental variables being modified subjectively".

The decisive factor: market operators acting without superior instructions

A crucial element in the acquittal was that the Criminal Chamber determined that Iberdrola's market operators acted autonomously, without receiving instructions from their superiors. This ruled out the existence of intentional or wilful conduct in the setting of bids, becoming an insurmountable obstacle to maintaining any punishment.

The National Court ruling has followed this line of argument, considering that, without proven intent, the "very serious penalty" imposed by the CNMC had insufficient legal foundation.

What this ruling means for consumers

Although the ruling directly benefits Iberdrola in economic terms, the reality is that the damage to Spanish wallets already occurred more than a decade ago. The 2013 "tariff hike" meant a significant increase in electricity bills for millions of households, with or without Iberdrola manipulation. What is now clear is that the courts have found no solid evidence that the company acted with intent to defraud the system.

The fine annulment also reinforces the trend of courts questioning the methodology used by regulatory bodies when pursuing complex market manipulation cases. Will this have implications for future competition investigations?