Xavier de Pedro (Zaragoza, 1964) was a pioneer in the reversion of hydroelectric plants in favour of the Administration during his mandate at the head of the Ebro Hydrographic Confederation (CHE), from March 2012 to April 2015. Lawyer specialized in Administrative Law and expert in water, he is a lawyer of the Legal Services of the Government of Aragon, a body of officials to which he re-entered after competing in 2015 as a candidate for mayor of his city for the Aragonese Party (PAR), to which he belongs, “although now I am not very active” in politics.
Former head of the Department of Rights with the Justice of Aragon and general director in the Executive Maño, after the legislature pact that then had the PP and the PAR to govern Aragon, he was appointed president of the CHE with Mariano Rajoy in Moncloa. First, under the then Minister of Agriculture and later European Commissioner for Energy, Miguel Arias Cañete, and then with his successor, Isabel García Tejerina, who is now a director of Iberdrola in Brazil.
De Pedro attended by phone to elDiario.es last Friday to talk about a topical issue, the management of hydroelectric dams. A burning issue, with several open files for the emptying of reservoirs, light at record prices, the hydroelectric taking advantage of the situation in the wholesale market, the Executive willing to give more weight to the State in the management of these infrastructures and in the middle of a pulse with electricity by cutting their extra profits by the rise in price of CO2.
De Pedro believes that the Administration must recover prominence in the management of dams, an aspect that in his opinion “no government has been taken seriously to bring order”. The “small print” of the water regulations is, he says, very little exploited in favor of the public interest.
Teresa Ribera is now open to a public company to manage hydroelectric concessions that expire. What do you think of that idea?
Personally, I would opt for another model, instead of going back to a large public company that would monopolise hydroelectric energy to some extent. That’s an acceptable model, But I am more in favour of decentralisation in the management of the plants: that the largest ones, those declared of general interest, the large reservoirs, should be managed by the hydrographic confederations; the medium-sized ones, by the autonomous communities, which have executive powers in matters of energy and industry; and the small ones, by the local entities and irrigation communities. For this I do not think it is necessary to create a new structure. The confederations have highly qualified staff and some already manage hydroelectric developments. The Ebro, but also the Duero and the Guadalquivir do it.
Regardless of which public body manages them, do you think it is an “occurrence” that the public authorities do it, as the PP has said regarding this public company?
In that sense I disagree with the Popular Party. We come from a model that has already fulfilled its mission: a large private investment to make the various hydroelectric developments that exist in Spain through a concession system. In order to build a large dam and a development, the companies made an investment that was amortised over a period of 75 years. Once amortized, they are assets that must revert to the State and the management has to change. The concession model is no longer necessary. We have to go to a model where the Administration can contract the conservation service of these plants and put the energy on the market through the agents it can contract without any problem. The logical thing is that the Administration does not neglect these assets it has and manages them. Moreover, this does not imply any limitation to the market, because they are not the only actors that will be there. The fact that there is a public presence is also good.
You drafted a proposal for a popular legislative initiative on the reversion of the jumps and then accused Podemos of appropriating it.
It was curious, or more than curious, regrettable. Through an association that we created in Aragón, which was called Aragón Suma and which had the aim of also joining other communities, we raised an initiative that was consulted with the political groups of Aragón, including Podemos, and when we were going to present it in the Cortes Generales they went ahead with an initiative that copied almost literally the first draft. It was an appropriation of an idea that they did not really have.
In the case of the CHE, what potential do you see for taking on concessions that have expired or are about to expire?
The issue is more complex than a mere expiration of deadlines. In the concessions there is a lot of small print, with energy reserved for the State, flow limitations, environmental … There have also been modifications of hydroelectric plants that have not been authorized. I believe that all of this needs to be controlled much more exhaustively than it has been up to now. There has been a lack of political interest in controlling hydroelectric concessions. We could find many surprises once we analyze each of the concession titles, which are documents that are sometimes 50, 60 years old… There is a lot of progress to be made there, because there are concessions whose term has already expired. And there is the issue of reserved energy, which was also claimed from the hydroelectric companies and there are millions of euros in yields that can be obtained. This is happening all over Spain and in all the confederations. In the confederation of the Ebro, the term of some of them has already ended and the CHE itself manages several. It is a path to follow, but we will have to give it political direction and coordination.
You ordered the reversion of El Pueyo de Jaca (Huesca), the first waterfall reverted to a confederation. How was that process?
At that time there was no political interest in these issues, in setting in motion the reversions that should be taking place all over Spain. This was the first one that was done, and ten years late, which shows that lack of political interest that I believe is still in force. No government has yet taken this issue seriously in order to put things in order. In that case, the law had to be complied with and what was done was an administrative file which was new but which was already regulated by the law and the regulations. The administrative procedures, which are complex, were complied with and in the end the reversion was achieved. It could not be otherwise. It was to comply with the law.
Then came more reversions under your mandate?
They were set in motion in three or four other leaps and some have been completed after I left. As the reversion process is complex in its processing, the law allows that with three years in advance you can start the procedure so that when the expiry date arrives, the effective reversion resolution can already be issued.
Where did you find more resistance: in the companies or in the Administration? </p>
Companies always try to put all kinds of administrative hurdles to prevent the reversion from moving forward. To a certain extent there is not much good faith, we would say: once their 75-year term is up, there should be more collaboration and good faith and assume that these concessions have ended. And they always look for any procedural defect or trick to try to delay it. This is commonplace. Political momentum is also very important. The confederations in general have very qualified staff, but with a lot of work, and either you give priority to these issues or they are often abandoned or delayed excessively. And one of the political functions when personal resources are limited is to establish priorities. This one was, because it involved very significant resources for the Administration.
You mentioned the energy reserve for the State. Can you explain what it consists of?
In many concessions there was a percentage of energy reserve for the State at cost price, with a profit margin for the company of 5% or 10%, depending on the case. The cost price of energy in a practically amortised infrastructure is very low, which is surprising when we citizens pay such high prices for energy that is produced so cheaply. But focusing on reserved energy, it is just that: energy that can be obtained by the State at a low price and for certain purposes that in some cases were established in the concessions but that can also be determined by the Government. They are public assets and the Administration must assert those economic interests, which belong to all citizens. These benefits went to the public interest, which is who it corresponded to.
“There is a lot of small print in which many important benefits can be obtained for public interests and to control that these concessions are developed correctly”.
When I was there, the reserved energy in very important power plants was claimed and the CHE collected millions of euros, we are not talking about small amounts. This issue has also been abandoned. There was a very important legal debate and the High Court of Justice of Aragon ruled in favour of the CHE in the claim for this reserved energy, which is not only in the Ebro confederation, but also in others. This is what we were talking about before: it is necessary to demand greater control over all these concessions because there is a lot of small print in which many important benefits can be obtained for public interests and to control that these concessions are developed correctly and in accordance with the law and the concession title.
The Government has announced the opening of informative files to Iberdrola and Naturgy for the emptying of dams of the
Duero, Tajo and Miño-Sil with the light shot. Is this practice legal?
The confederations have some flow controls and there are some criteria established by the exploitation boards in which the final decision is made by the confederation. If these reservoir management criteria have not been complied with by the users or by the infrastructure managers, measures can obviously be taken and I imagine that the Government will act accordingly. I insist once again on the need to control the exercise of these concessions, on which the confederations obviously have a lot to say.
If the file were to become a sanctioning one, what sanctions, if any, could be imposed?
We would have to see what type of infringement has been committed. Obviously very serious and very high penalties can be imposed, but in administrative law it is often the case that it is more profitable to break the law even if you are sanctioned. I don’t know if this is the case, but it can easily happen when there are such high economic interests. And there is also another very important thing, which is perhaps where strict compliance can really be demanded. If there is a serious breach of the concession, a cancellation procedure can be initiated, which I think is what the electricity companies fear the most because that would be the end of their business. Often, failure to comply with the ecological flows, an essential issue of the concessions, if there is a major breach can lead to the expiry of the concession, which is a much more effective way of exercising control than the sanction itself.
Did you find concessions that had been extended before your arrival after those 75 years?
There was a very particular case, Lafortunada-Cinqueta, which had been extended under unclear conditions and in which we finally resolved the reversion. In a resolution of the Ministry annulling the construction of a hydroelectric dam, the Jánovas reservoir, due to environmental issues, something that could be interpreted in a very complex way had been raised: the possible extension to compensate for the possible damages. This gave rise to a complex dossier but in the end the reversion was agreed and reasonable compensation was established, not what the company wanted.
In these matters there is also a very important casuistry of supposed compensations, of loss of benefits of the hydroelectric plants as a consequence of flow limitations, etc. There is always an economic debate that sometimes gives rise to this type of compensation that is not currently possible. When a reversion ends, it has to revert. The extension is only foreseen if very important works are carried out; without something in return, it makes no sense.
There has always been talk in the sector that during the time of Benigno Blanco, an Iberdrola director who was later in the Ministry of the Environment under José María Aznar, concessions were extended, sometimes with unclear conditions. Do you know about this?
I am not aware of it. That concession that I was talking about did have this kind of extension that was legally very weak and was not consummated. There may be similar cases in other confederations, I don’t know. These concessions have been made on reservoirs that have created serious environmental and economic effects in areas such as the Pyrenees that have not been compensated. Hence the importance that now that these infrastructures have been amortised, there should be some kind of compensation or participation in the benefits for these territories, which have suffered very important limitations.