The electrical storm of Sánchez Galán with Ribera and Villarejo

Iberdrola was the company that best fought the Ibex 35 pandemic in 2020. Its shares closed that black year with a revaluation of 32% and rose to the top of the valuation podium, above Inditex. Ignacio Sánchez Galán is the visible face of the success of the Bilbao-based energy empire that had conquered the market in the midst of the coronavirus betting everything 'on green'. A 'honeymoon' in the market that has been spoiled in this 2021.

Sánchez Galán's 'love and hate' relationship with the Spanish government, embodied in the figure of Teresa Ribera, is largely to blame. The president of Iberdrola was to date one of the great businessmen who did not miss any of Pedro Sánchez's calls. 'Spain can. Recovery, Transformation, Resilience' or 'Spain 2050' attest to this understanding. The staunch defense of the decarbonization of the economy at any price that Moncloa defends, which reflects the National Integrated Energy and Climate Plan (PNIEC) 2021-2030, fits perfectly with Sánchez Galán's renewable energy investment plan.

This 'filing' was evident in his public meetings with Teresa Ribera. The Minister for the Ecological Transition, recognized as one of the greatest 'gurus' of environmentalism in Spain, found in the figure of Sánchez Galán the best way to enter a more unknown terrain such as the business world of energy. The connection experienced its greatest moment of splendor in Toledo. Iberdrola presented there an agreement with the American manufacturer Cummins for the development of green hydrogen. The president managed to move the President of the Government, Pedro Sánchez, the Minister of Energy Transition, Teresa Ribera, the Minister of Industry, Reyes Maroto, and the President of Castilla La Mancha, Emiliano García-Page, for the photo in the capital of La Mancha.

This 'love' story was also felt in the regulatory field. Sánchez Galán has been one of those who has most strongly applauded one of Ribera's star measures: the National Fund for the Sustainability of the Electricity System (FNSSE). A fund that basically intends that the aid for the deployment of renewables come out of the electricity bill of consumers and falls on CO2-emitting energies such as oil or gas.

An intense relationship between Sánchez Galán and the Government that began to fade in June. With the price of electricity accumulating three months of increases, Ribera presented the cut to the remuneration of CO2 not emitted from the electricity market. The Government's intention is to reduce the so-called windfall profits of the older hydroelectric and nuclear power plants that are considered amortized. Power production plants of which Iberdrola, together with Endesa, is the great manager and which, according to the calculations of market analysts, represents a reduction in the profit of the large electricity companies of 800 million euros.

A great connoisseur of this relationship speaks with Vozpópuli about this decision as "the beginning of the end" of the relationship between Sánchez Galán and Moncloa. Although the worst was yet to come, with the price of electricity runaway in summer. Pedro Sánchez's government partner, United We Can, blamed the power companies for this and insisted on nationalizing energy assets to control this crisis. Teresa Ribera declared full vacation in August from Menorca that they were investigating Ignacio Sánchez Galán's company for emptying the Ricobayo reservoir (Zamora) to take advantage of high prices.

Blow to Sánchez Galan

The final break was in September. Pedro Sánchez announced to Spaniards that on average their electricity bill was going to be similar to that of 2018 thanks to the package of measures that the Government was preparing. And, when they revealed his letters on September 14, a new 'hachazo' appeared to Iberdrola's business. Specifically, Teresa Ribera presented a cut of nearly 2,600 million euros to the electricity business for the extra benefit they were charging for high gas prices. Of this figure, 2,000 million would come from the pockets of Endesa and the company chaired by Ignacio Sánchez Galán.

The investors who supported Iberdrola so much in 2020 questioned its business with the regulatory crisis in its main market. The accumulated collapse in the nine months of 2021 rose to 18%. Sánchez Galán activated his international agenda to prevent this punishment of those who, to date, he considered great allies. "The Government must correct two errors, the Royal Decree and the Law, which were surely produced due to lack of information," defended Iberdrola in a controversial press release in October.

The statement came shortly before the signing of Antonio Miguel Carmona as vice president of Iberdrola Spain was announced. A member of the PSOE old guard estranged from Pedro Sánchez's 'gang'. Together with him, Sánchez Galán renewed the communication direction of the company with José Luis Fernández Peña, better known as 'Chunda', at the head.

A renewal that also occurred in parallel in the company's board of directors. A final firework that was finished off at the end of October with Ribera's 'reverse gear' in his 'hachazo' in the form of a new royal decree-law to correct his errors. At the end of 2021, the relationship between Galán and the Government is experiencing a period of 'cold war' where it seems that both are condemned to reconcile.

Villarejo's shadow

This disagreement between Galán and the Government has been interrupted on several occasions by the appearance of the Villarejo case. In June, the judge of the National Court, Manuel García Castellón, summoned the president of Iberdrola to testify for his alleged participation in the commission of the continuous crime of active bribery, crime against privacy and continued crime of falsifying a commercial document. In the case of investigating the contracting by Iberdrola of the services of Cenyt, the company of former commissioner Villarejo, in the seventeenth piece of the so-called Tandem case.

Half a year after his indictment in the Villarejo case, on December 3, Ignacio Sánchez Galán already knew his date to testify at the National High Court. Judge Joaquín Gadea has summoned him for next January 18, the same day that the former president of Iberdrola Spain Fernando Becker will also be questioned.

From the electricity company they hope that his president will be disqualified once his statement is finished, as happened with both Isidro Fainé and Antonio Brufau. A collateral damage of this process is the blocking of the purchase of the energy company PNM Ressources by Avangrid, a subsidiary of the Spanish multinational in the United States, valued at 3,625 million euros. The direct impact of Villarejo's shadow on Sánchez Galán that It has been evidenced in this 2021.