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Spain probes Iberdrola's use of reservoir water

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FILE PHOTO: The logo of Spanish power company Iberdrola is seen on top of Iberdrola's main office building in Madrid
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By Isla Binnie

MADRID (Reuters) - Spain is examining the use of reservoir water by power utility Iberdrola, an energy and environment ministry official said on Thursday, adding a recent rapid draw-down from a lake in the west of the country exceeded "common sense" limits.

Mayors in towns around the Ricobayo reservoir have complained in recent weeks after the water stored there shrank to just 11% of its total 1,145 cubic hectometre capacity in five months.

Iberdrola says it is drawing on the reservoir according to the rules, and that the water has been at similar or lower levels on around eight occasions in the past 25 years.

The state water authority is gathering information to determine whether the company exceeded established limits, and expects to have all the details in the coming days, Secretary of State for the Environment Hugo Moran said on Thursday.

If there is evidence of bad practice, the company could face sanctions, the energy and environment ministry said.

The sharp fall in the water level is partly due to the closure of a nearby hydroelectric plant, which meant the system drew more heavily on Ricobayo, the local water authority said.

Regardless of the results of the probe, "this has gone beyond what common sense would recommend in the use of such a sensitive public resource as water", Moran said.

The mayors' protests have coincided with sometimes fierce debate in recent weeks in Spain around ways to contain record-high wholesale power prices.

These have been pushed to records by strong global gas demand and the rising cost of European permits to emit carbon through activities including electricity generation.

Iberdrola said in a statement that hydro reserves were used when they are most needed, either because other sources were not available or because they can replace more expensive ones, taking into account their limited nature.

(Reporting by Isla Binnie; Editing by David Holmes)

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