The Government puts the blame on the price of natural gas, but the system is heavily tipped in favour of large electricity companies like Endesa and Iberdrola: wholesale electricity is paid for at the price of the most expensive source, no matter if it was generated by wind power, for example, so in effect, we’re paying for tin and the price of gold.
Yet, not content with this unfair system imposed by the previous conservative government, the utility companies appear to have been overcharging by as much as 30% in other ways, according to the Comisión Nacional de Mercados y Competencia (CNMC).
The new billing system came into effect on the 1st of June, where the price charged varies on the time of day. The CNMC has detected in some cases where the electricity companies have slipped in almost a third more on top of what customers should have been charged.
The problem is that they had made the peaje (charge for the infrastructure) more expensive without informing the customer, thereby denying him or her the opportunity to terminate the contract and switch to another provider.
The CNMC did not give names but it did point out that the culprits were amongst the top 25 energy companies.
No sooner that it was known that the CNMC was writing up this report, several of the said companies had already begun making deductions to square the overcharged amounts.
But this will be a drop in the ocean of pain for consumers because August has been the most expensive in the history for Spanish energy consumers. Prices at the end of last month reach 122.7 euros per megawatt hour, well above the mid-month price of 117.29 euros (MW/h).
Which brings us to what Iberdrola has been doing with its hydroelectric generators: residents of towns in the provinces of Zamora and Cáceres reported Iberdrola for emptying the reservoirs in order to take advantage of the sky-high electricity prices. Remember, cheaply produced electricity (hydro) is charged to the consumer at the same rate as much dearer sources (gold/natural gas). Consequently the drained reservoirs have little left for irrigation and domestic consumption.
One such reservoir is the Embalse de Ricobayo, which is the biggest reservoir used for hydro-electricity generation.The other is El Embalse de Valdecañas, in Cáceres.
Residents have called upon the European Commission that Iberdrola should lose management of the reservoirs. They also demanded an urgent investigation.
The Minister for Ecological Transition, Teresa Ribera, who described it as “absolutely scandalous,” in an interview on national TV, has assured that the Government is investigating the affair.
The fact is that the Embalse de Ricobayo went down from 95% to only 12% in four months, the majority of which was used during just six weeks.