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Utilities accused of consumer fraud -- Green power in Spain

The launch of green energy sales by Spanish utility Iberdrola, with competitor Endesa quickly following in its footsteps, has led to accusations of possible consumer fraud by both Spain's opposition Socialist party, the Partido Socialist Obrera de España (PSOE), and by competing utility Unión Fenosa, which is not selling green power. A public enquiry has been launched into the sales by electricity regulator Comisión Nacional de Energia (CNE).

The controversy revolves around which renewable electricity sources may be sold as green. The answer from Iberdrola and Endesa -- when pressed -- is hydroelectric power, including from large plant over 50 MW as well as non-subsidised mini-hydro. Subsidies for wind power are already part of the price consumers pay for their electricity, so no wind power is included in the new green mix.

TV turbines

Nonetheless, Iberdrola's TV advertisement for its green product contains impressive images of wind turbines. The word is that it wants to include wind by promising that any extra income will be pumped back into new renewables development.

The Spanish World Wildlife Fund (WWF) and other environmentalists object to the inclusion of large-hydro under a green energy label. Most large hydro stations have long since been paid for and it is among the cheapest power on the market. "It is absurd to get consumers to pay a surcharge. Only a slight extra charge would be reasonable to cover certification costs (0.5-1%)," states WWF. Current surcharges are 2.4% from Endesa and 5% from Iberdrola, according to the group. This money goes "solely to filling the coffers of these companies," making the green energy stunt "little to do with promoting renewable energy and nothing to do with ecology," says WWF.

Iberdrola retorts that its strategic plan 2002-2006 invests EUR 2400 million in renewables generation, including 3534 MW from wind and excludes large hydro. But there is no formal guarantee, by Iberdrola or Endesa, for reinvesting green power profits in renewables.

PSOE member of parliament Javier Garcia Breva asks how there can be sales of green power when there is no official system for certifying its origin. Bravo's fears of "possible consumer fraud" are grounded in Iberdrola's TV campaign, which suggests that each time a citizen watches television or has a shower, he will be caring for the environment.

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