Mexican regulator fines Spain’s Iberdrola unit $466 mln

The logo of Spanish utility company Iberdrola is seen outside its headquarters in Madrid, Spain, May 23, 2018. REUTERS/Sergio Perez

MEXICO CITY, May 27 (Reuters) – Mexico’s energy regulator fined a unit of Spain’s Iberdrola 9.15 billion pesos ($466.4 million), arguing they violated a so-called self-supply power generation permit by selling electricity to their partners, according to a regulatory filing.

Iberdrola Energia Monterrey delivered energy to partners in exchange for economic compensation, which constitutes a sale that is not allowed under the self-supply figure for which the permit was granted, the Energy Regulatory Commission (CRE) said in the resolution posted on its website this week.

“The described conduct is unlawful since it affects the legal rights that oblige the permit holder not to sell, resell or by any legal act transfer capacity or electric energy,” the resolution said.

Iberdrola (IBE.MC) did not immediately respond to a request for comment about the fine, which CRE said can still be challenged.

The resolution did not identify Iberdrola Energia Monterrey’s partners, though a permit approved by CRE in 2012 lists British American Tobacco de Mexico; convenience store chain Oxxo, owned by bottler FEMSA ; Kimberly Clark de Mexico and Nissan Mexicana.

Food supplier Sigma, a subsidiary of Mexico’s Grupo Alfa (ALFAA.MX), along with grocery chains Chedraui (CHDRAUIB.MX) and Soriana (SORIANAB.MX) and steel manufacturer Ternium Mexico are listed on the permit.

The fine imposed on the Spanish firm, which has been openly criticized by Mexico’s President Andres Manuel Lopez Obrador, comes amid a review of the “self-supply permits” that were issued under the previous government. read more

The current administration has said that companies have misused the permits.

It also comes amid the government’s efforts to strengthen the role of the state-run utility Comision Federal de Electricidad (CFE), which the president says was affected by the energy reforms of 2013/14.

($1= 19.6063 Mexican pesos)

Reporting by Adriana Barrera; Writing by Valentine Hilaire; Editing by Sandra Maler

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