Iberdrola could be fined over 'fraudulent' energy price inflation

ELECTRICITY board Iberdrola faces a multi-million fine over alleged 'fraudulent manipulation of prices', according to the National Markets and Competition Commission (CNMC).

The utility supplier hotly denies the accusations, originally made by the ministry for industry to the CNMC, which has opened a disciplinary inquiry.

Investigations centre on Iberdrola's 'alteration' of energy prices just before the supply contract was last put out to auction in December – a process that used to take place every three months but has now been scrapped.

The Spanish government declared the auction null and void, since it would have led to an 11-per-cent hike in electricity bills for residents.

According to the ministry at the time, there had been 'a clear price manipulation' which had led to the actual cost of energy being grossly inflated and the surplus passed onto the consumer.

The ministry has since announced plans to give the electricity supply system a thorough MOT which is likely to result in a restructure.

Customers are calling for Iberdrola to hit with the maximum fine possible if the allegations are true, says leading consumer organisation FACUA.

Considered a 'serious offence', fraudulent price inflation carries a sanction ranging from six to 60 million euros.

The CNMC has carried out numerous probes in the past and levied fines on power suppliers for price hikes in the wholesale market, where costs on an hourly and daily rate are negotiated.