Iberdrola's 'Windfall Profits' Face Attack From Spanish Greens
Iberdrola’s ’Windfall Profits’ Face Attack Spanish Greens
Denis Doyle/Bloomberg
The Iberdrola logo is displayed on a wind turbine at a wind farm near Antequera, Spain.
The Iberdrola logo is displayed on a wind turbine at a wind farm near Antequera, Spain. Photographer: Denis Doyle/Bloomberg
Iberdrola’s ’Windfall Profits’ Face Attack From Greens
Denis Doyle/Bloomberg
An employee carries out maintenance work on an Endesa wind turbine at a wind farm near Antequera.
An employee carries out maintenance work on an Endesa wind turbine at a wind farm near Antequera. Photographer: Denis Doyle/Bloomberg
Spanish environmentalists are starting to campaign for a levy on “windfall profits” earned by Iberdrola SA and Endesa SA, the country’s biggest utilities.
Joan Herrera, the leader of the Catalan Greens party, said yesterday that he’s aiming to build public support for a plan to impose charges on nuclear and hydroelectric plants that earned 3.6 billion euros ($4.6 billion) last year.
“This is a scandal,” Herrera said in a telephone interview. “We’re trying to raise awareness so that they will set policy in the interests of the public rather than the power companies.”
Lawmakers from Prime Minister Jose Luis Rodriguez Zapatero’s Socialist Party voted down the Greens’ proposal in the Spanish parliament this week. Instead, the premier is cutting consumer subsidies for renewable power as he seeks to put Spain’s electricity system on a more sustainable footing.
During the last decade, Spanish power consumers have built up a debt to electricity providers because the government has hasn’t let the utilities charge a high enough rate, or tariff, to cover their regulated costs. The “tariff deficit” generated last year was about 4.6 billion euros, Herrera told parliament in the Sept. 7 debate.
A spokesman for Iberdrola pointed to a report by PricewaterhouseCoopers LLP that says the profits generated by nuclear and hydro plants are not excessive.
Tariff Deficit
“Proposals which call for a reduction in the supposed ’windfall profits’ from power generation make no sense in a liberalized market like that for generating and distributing electricity and they don’t resolve the problem of the tariff deficit,” the report said.
A spokesman for Endesa declined to comment. He asked not to be named in line with company practice.
Endesa rose 0.3 percent to 19.27 euros a share at 11:33 a.m. in Madrid trading. Iberdrola, which owns Glasgow, Scotland- based Scottish Power Plc, was unchanged at 5.70 euros as the Madrid Stock Exchange Petrol and Power index climbed 0.1 percent.
Industry Minister Miguel Sebastian has been negotiating cuts in the consumer-paid subsidies that wind and solar energy operators earn in a bid to narrow the deficit. Under Spanish law, officials have to eliminate the shortfall by 2013.
To contact the reporter on this story: Ben Sills in Madrid at bsills@bloomberg.net
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