CNMC Launches Investigations into April 2022 Energy Blackout: A Tidal Wave of Regulatory Scrutiny

In a significant move reminiscent of a regulatory tidal wave, the National Commission of Markets and Competition (CNMC) has initiated a series of investigations targeting energy companies in response to the major blackout that occurred nearly a year ago on April 28, 2022. This week, the regulatory body led by Cani Fernández disclosed new files, adding to the approximately twenty investigations that were already underway as of last week. These actions reflect the ongoing scrutiny regarding the complex circumstances surrounding last year's blackout. The CNMC's systematic approach to releasing information about these investigations began on April 23, culminating in a public announcement on April 24. This suggests an administrative upheaval in the wake of the outage, which has been attributed to a multitude of technical failures and mismanagement. While initial assessments pointed fingers at both the electricity companies and the network operator, Red Eléctrica, the debate continues as to where the primary responsibility lies. Currently, fifteen new investigations have been made public. They involve energy giants such as Endesa, TotalEnergies, Engie, and the operators of the nuclear plants in Ascó and Vandellós II. The core of most of these cases rests on potential violations of Article 658 of the Electric Sector Law. This article covers a range of serious infractions, including but not limited to operating with non-certified equipment, failing to adhere to essential safety permits, and running facilities without the necessary permissions. Of particular interest is the investigation into the entity managing the nuclear facilities in Ascó and Vandellós II, which may have violated Article 6534 of the Electric Sector Law. This line of inquiry suggests that the CNMC has reason to believe that the firm may have engaged in practices aimed at manipulating market prices—potentially bidding inappropriately to influence which energy sources and plants were included in the pricing structure. As it stands, the CNMC has pledged to keep these investigations open with a resolution timeline set for 18 months. Therefore, we can expect more developments and resolutions on these issues leading up to October of next year. While the shadow of last year’s blackout looms large, so does the commitment from regulatory authorities to ensure accountability in the energy sector. Related Sources: • Source 1 • Source 2