ANNEX EXPLAINING SIGNIFICANT EVENTS

ANNEX EXPLAINING SIGNIFICANT EVENTS

E - 1. Acquisitions or disposals of shares in listed companies giving rise to the disclose requirement contemplated in Art. 53 of the Spanish Stock Exchange Law (5% and multiples).

Acquisition by IBERDROLA PARTICIPAÇOES SGPS, S.A. (100% held by IBERDROLA PORTUGAL ELECTRICIDAD E GAS, S.A., in turn 100% held by IBERDROLA, S.A.), of 3.8% of the shares of ENERGIAS DE PORTUGAL, S.A. (EDP). Following this operation the indirect interest of IBERDROLA, S.A. in that company is 9.5%.

Acquisition by IBERDROLA, S.A. of 11% of the shares of GAMESA S.A. (50 % held by IBERDROLA S.A. and CORPORACIÓN IBV). Following this operation the direct and indirect interest of IBERDROLA, S.A. in that company is 24.39%. E - 3. Other significant increases or reductions of fixed assets (stakes of over 10% in non listed companies, relevant tangible investments or disinvestments, etc).

Increase in share capital of NEOTEC CAPITAL RIESGO SOCIEDAD DE FONDOS, S.A., S.C.R., in which IBERDROLA maintains a direct interest of 7.93%.

Ancillary investment in IBERDROLA PORTUGAL ELECTRICIDAD E GAS, S.A. (100% held by IBERDROLA, S.A.). Following this operation the indirect interest of IBERDROLA, S.A. in that company remains unchanged.

Increase in share capital of IBERDROLA DISTRIBUCIÓN DE GAS, SAU, by IBERDROLA, S.A. Following this operation the direct interest of IBERDROLA, S.A. in that company remains unchanged. (pending registration at the Commercial Registry).

Sale by IBERDROLA, S.A. of 100% of its stake in MEDIA PARK, S.A. to IBERDROLA INMOBILIARIA, S.A., (100%-owned by IBERDROLA, S.A.), consequently IBERDROLA S.A.’s interest in that company remains unchanged.

Purchase by VINZEO TECHNOLOGIES, S.A. (50%-owned by CORPORACION IBV, PARTICIPACIONES EMPRESARIALES, S.A., in turn 50%-owned by IBERDROLA, S.A.) of 100% of the company named ARC, giving IBERDROLA, S.A. a 50% indirect interest in that company.

Sale by IBERDROLA INMOBILIARIA, S.A. (100%-owned by IBERDROLA, S.A.) of 30% of FIUNA, S.A., leaving IBERDROLA an indirect interest of 70% in that company.

Increase of share capital of MEDIA APPLICATIONS, S.A. (50% held by MEDIA PARK, S.A. and IBERDROLA, S.A. respectively), by capitalisation of debt. After this operation, MEDIA PARK, S.A. holds 71.38% and IBERDROLA, S.A. Lodz 28.62% of the shares in the company, bringing IBERDROLA’s direct interest in that company to 100%.

Purchase by IBERENOVA PROMOCIONES (100%-owned by IBERDROLA ENERGIA RENOVABLES, II, in turn 100%-owned by IBERDROLA, S.A.) of 100% of the capital of NATURENER, S.A., and change of corporate name to PARQUES EÓLICOS REUNIDOS, SAU, giving IBERDROLA an indirect interest of 100% in that company.

Increase in share capital of the German company IBERDROLA

REGENERATIVE ENERGIEN Gmbh (100%-owned by IBERDROLA ENERGÍA RENOVABLES II, in turn 100%-owned by IBERDROLA, S.A.). Following this operation the indirect interest of IBERDROLA, S.A. in that company remains unchanged.

Incorporation by IBERDROLA ENERGÍA RENOVABLES II, S.A. (100%-owned by IBERDROLA, S.A.) of the US company IBERDROLA RENEWABLE ENERGIES USA LIMITED, giving IBERDROLA an indirect interest of 100% in that company.

Additional funding provided AEOLIA PRODUÇAO DE ENERGIA (100%-owned by IBERDROLA ENERGÍA RENOVABLES II, in turn 100%-(100%-owned by IBERDROLA, S.A.). Following this operation the indirect interest of

IBERDROLA, S.A. in that company remains unchanged.

Incorporation by IBERDROLA INGENIERIA Y CONSTRUCCION, S.A.U. (100% owned by IBERDROLA, S.A.) of the Polish company IBERDROLA ENGINEERING AND CONSTRUCTION POLAND SP. Z.O.O., giving IBERDROLA an indirect interest of 100% in that company.

Incorporation by IBERDROLA INGENIERIA Y CONSTRUCCION, S.A. (100% owned by IBERDROLA, S.A.) of the English company IBERDROLA

ENGINEERING AND CONSTRUCTION UK LTS., giving IBERDROLA an indirect interest of 100% in that company.

Incorporation by IBERDROLA INGENIERIA Y CONSTRUCCION, S.A. (100% owned by IBERDROLA, S.A.) of the Russian company IBERDROLA

INZHINIRING I STROITEISTVO LIMITED LIABILITY COMPANY, giving IBERDROLA an indirect interest of 100% in that company.

Acquisition by IBERDROLA S.A. of 10% of REFINERIA BALBOA, S.A., in which IBERDROLA maintains a direct interest of 10%.

Increase in share capital of REINO DE DON QUIJOTE, S.A. (3.60%-owned by IBERDROLA INMOBILIARIA, S.A., in turn 100%-owned by IBERDROLA, S.A.), so that IBERDROLA S.A. has an indirect interest of 3.86%.

Incorporation by IBERDROLA INMOBILIARIA (100%-owned by IBERDROLA, S.A.) of IBERD-ROS, S.L., such that IBERDROLA has an indirect interest of 50% in that company.

Winding up of TELEMATICS, S.A., MEDIA PARK HANNOVER 2000, S.L. Y MOTOR CHANNEL, S.A. (held by MEDIA PARK, 100% owned by

IBERDROLA INMOBILIARIA, S.A., 100% owned in turn by IBERDROLA, S.A.), such that the indirect participation of IBERDROLA, S.A. in these companies is cancelled.

Incorporation by IBERENOVA PROMOCIONES, S.A. (100%-owned by IBERDROLA ENERGÍA RENOVABLES II, in turn 100%-owned by IBERDROLA, S.A.), of GLOBAL SOLAR ENERGY, S.A., giving IBERDROLA an indirect interest of 90% in that company.

Acquisition by IBERDROLA RENEWABLE ENERGIES OF UK LIMITED (100% owned by IBERDROLA ENERGÍA RENOVABLES II, S.A., in turn 100%-owned by IBERDROLA, S.A.) of the HIGHER DARRACOTT MOOR WIND FARM LIMITED, giving IBERDROLA an indirect interest of 100% in that company .

Increase in share capital in IBERDROLA RENEWABLE ENERGIES USA, LIMITED (100%-owned by IBERDROLA ENERGÍA RENOVABLES II, in turn 100%-owned by IBERDROLA, S.A.), consequently IBERDROLA's indirect interest in that company remains unchanged.

Acquisition by BERDROLA RENEWABLE ENERGIES USA LIMITED (100% owned by IBERDROLA ENERGÍA RENOVABLES II, S.A., in turn 100%-owned by IBERDROLA, S.A.) of the COMMUNITY ENERGY INC, giving IBERDROLA an indirect interest of 100% in that company .

Incorporation by IBERENOVA PROMOCIONES, S.A. and IBERDROLA ENERGIAS RENOVABLES II (100%-owned by IBERDROLA, S.A.), of ELECTRA DE MALVANA S.A., with a shareholding of 0.001% and 44.999% respectively, giving IBERDROLA an indirect interest of 45% in that company. Incorporation by IBERENOVA PROMOCIONES, S.A. and IBERDROLA ENERGIAS RENOVABLES II (100%-owned by IBERDROLA, S.A.), of ELECTRA DE SIERRA DE SAN PEDRO, S.A., with a shareholding of 0.001% and 79.999% respectively, giving IBERDROLA an indirect interest of 80% in that company.

Incorporation by IBERENOVA PROMOCIONES, S.A. and IBERDROLA ENERGIAS RENOVABLES II (100%-owned by IBERDROLA, S.A.) of ELECTRA DE MONTANCHEZ, S.A, with a shareholding of 0.001% and 39.999% respectively, giving IBERDROLA an indirect interest of 40% in that company.

Incorporation by IBERENOVA PROMOCIONES, S.A. and IBERDROLA ENERGIAS RENOVABLES II (100%-owned by IBERDROLA, S.A.), of

SISTEMAS ENERGETICOS LOS CAMPILLOS, S.A., with a shareholding of 50% each, giving IBERDROLA an indirect interest of 100% in that company. Increase in share capital in ENERGIA DE CASTILLA Y LEON (ENCALSA) (90%-owned by BIOVENT HOLDING, 85% held by IBERDROLA ENERGÍA RENOVABLES II, in turn 100%-owned by IBERDROLA, S.A.), such that IBERDROLA's indirect interest in that company remains unchanged.

Incorporation by ENERGIA DE CASTILLA Y LEON (ENCALSA) (90%-owned by BIOVENT HOLDING, 85% held by IBERDROLA ENERGÍA

RENOVABLES II, in turn 100%-owned by IBERDROLA, S.A.), of

ECOBARCIAL, S.A., with a shareholding of 51%. Following this operation the direct and indirect interest of IBERDROLA, S.A. in that company is 39.02%. Acquisition by IBERDROLA REGENERATIVE ENERGIEN, GMBH (100% held by IBERDROLA ENERGÍA RENOVABLES II, in turn 100%-owned by IBERDROLA, S.A.), of 100% of the German company DELTUS, so that the indirect interest of IBERDROLA S.A. in that company is 100%.

Increase in share capital in IBERDROLA ENERGIA RENOVABLES DE LA RIOJA, S.A. (100% held by IBERDROLA ENERGÍA RENOVABLES II, in turn 100%-owned by IBERDROLA, S.A.), with new partners who contribute their shareholdings in EOLICAS DE LA RIOJA. As a consequence of this operation IBERDROLA ENERGIAS RENOVABLES II, S.A. has 63.5% of IBERDROLA ENERGIA RENOVABLES DE LA RIOJA and this company holds 100% of EOLICAS DE LA RIOJA, accordingly the indirect interest of IBERDROLA S.A. in this company is 63.5%.

Increase in share capital in IBERDROLA ENERGIA RENOVABLES DE LA RIOJA, S.A. (100% held by IBERDROLA ENERGÍA RENOVABLES II, in turn 100%-owned by IBERDROLA, S.A.), with new partners who contribute their shareholdings in DESARROLLOS ENERGIA RENOVABLES DE LA RIOJA (DERSA). As a consequence of this operation IBERDROLA ENERGIAS

RENOVABLES II, S.A. has 63.5% of IBERDROLA ENERGIA RENOVABLES DE LA RIOJA and this company holds 63.75% of DESARROLLOS ENERGIA RENOVABLES DE LA RIOJA (DERSA), accordingly the indirect interest of IBERDROLA S.A. in this company is 40.48%.

Increase in share capital in IBERDROLA ENERGIA RENOVABLES DE LA RIOJA, S.A. (100% held by IBERDROLA ENERGÍA RENOVABLES II, in turn 100%-owned by IBERDROLA, S.A.), with new partners who contribute their shareholdings in MOLINOS DE CIDACOS. As a consequence of this operation IBERDROLA ENERGIAS RENOVABLES II, S.A. has 63.5% of IBERDROLA ENERGIA RENOVABLES DE LA RIOJA and this company holds 50% of MOLINOS DE CIDACOS, accordingly the indirect interest of IBERDROLA S.A. in this company is 31.75%.

Increase in share capital in IBERDROLA ENERGIA RENOVABLES DE LA RIOJA, S.A. (100% held by IBERDROLA ENERGÍA RENOVABLES II, in turn 100%-owned by IBERDROLA, S.A.), with new partners who contribute their

shareholdings in MOLINOS DE LA RIOJA. As a consequence of this operation IBERDROLA ENERGIAS RENOVABLES II, S.A. has 63.5% of IBERDROLA ENERGIA RENOVABLES DE LA RIOJA and this company holds 66.66% of MOLINOS DE LA RIOJA, accordingly the indirect interest of IBERDROLA S.A. in this company is 42.33%.

Incorporation through NEOENERGIA, S.A. (39%-owned by IBERDROLA ENERGIA, S.A., in turn 100%-owned by IBERDROLA, S.A.) of the company named BAGUARI-UHE, giving IBERDROLA, S.A. an indirect interest of 39% in that company.

Incorporation through NEOENERGIA, S.A. (39%-owned by IBERDROLA ENERGIA, S.A., in turn 100%-owned by IBERDROLA, S.A.) of the company named GOIAS SUL PCH, giving IBERDROLA, S.A. an indirect interest of 39% in that company.

Increase in share capital of TERMOAÇU, held by NEOENERGIA, S.A. (39%-owned by IBERDROLA ENERGIA, S.A., in turn 100%-(39%-owned by IBERDROLA, S.A.). As NEOENERGIA S.A. did not participate in the capital increase, its shareholding in TERMOAÇA fell from 60.52% to 37.57%, leaving IBERDROLA an indirect interest of 14.65% in that company.

Incorporation by IBERDROLA INGENIERIA Y CONSTRUCCION, S.A. (100% owned by IBERDROLA, S.A.) of the Venezuelan company IBERDROLA

INGENIERIA Y CONSTRUCCIÓN VENEZUELA, S.A., giving IBERDROLA an indirect interest of 98% in that company.

Incorporation by IBERDROLA INGENIERIA Y CONSTRUCCION, S.A. (100% owned by IBERDROLA, S.A.) of the Greek company IBERINCO HELLAS TECHNIKI KAI KATASKEVASTIKI EPE., giving IBERDROLA an indirect interest of 100% in that company.

Incorporation by IBERDROLA INGENIERIA Y CONSTRUCCION, S.A. (100% owned by IBERDROLA, S.A.) of the US company IBERINCO ENGINEERING AND CONSTRUCCTION, US, INC., giving IBERDROLA an indirect interest of 100% in that company.

Additional funding by IBERDROLA S.A. in IBERDROLA PORTUGAL ELECTRICIDAD E GAS, S.A. Following this operation the direct interest of IBERDROLA, S.A. in that company remains unchanged.

Increase in share capital of SOCIEDAD PARA EL DESARROLLO

INDUSTRIAL DE CASTILLA Y LEÓN, SCR., S.A. Following this operation the direct interest of IBERDROLA, S.A. in that company remains unchanged.

Return of the additional funding by IBERDROLA PORTUGAL ELECTRICIDAD E GAS, S.A. to IBERDROLA, S.A. Following this operation the direct interest of IBERDROLA, S.A. in that company remains unchanged.

Return of the additional funding by IBERDROLA PARTICIPAÇOES SGPS, S.A. to IBERDROLA PORTUGAL ELECTRICIDAD E GAS, S.A. Following this operation the indirect interest of IBERDROLA, S.A. in that company remains unchanged.

Sale by IBERDROLA S.A. of 15.84% of IBERDROLA CONSULTORIA E SERVIÇOS DO BRASIL, LTDA to IBERDROLA INGENIERA Y

CONSTRUCCIÓN, S.A. (100% owned by IBERDROLA, S.A.). Following this operation the indirect interest of IBERDROLA, S.A. in that company remains unchanged.

Sale of 100% in AZERTIA TECNOLOGIAS DE LA INFORMACIÓN, S.A. (100% owned by CORPORACIÓN IBV, in turn 50% held by IBERDROLA, S.A.). After this operation, the indirect participation of IBERDROLA, S.A. in this company is cancelled.

Sale of MEDIA APPLICATIONS and MEDIA STB (100%-owned by MEDIA PARK, 100% owned by IBERDROLA INMOBILIARIA, S.A., in turn 100%-owned by IBERDROLA, S.A.), so that the indirect participation of IBERDROLA, S.A. in these companies is cancelled.

Increase in share capital of HIDROLA I, SLU, 100% owned by IBERDROLA S.A., so that the direct interest of IBERDROLA, S.A. in that company remains unchanged.

Increase in share capital of HIDROELECTRICA ESPAÑOLA, SLU, 100% owned by IBERDROLA S.A., such that the direct interest of IBERDROLA, S.A. in that company remains unchanged.

Increase in share capital of BILBAO BIZKAIA GAS, S.L., (25% owned by IBERDROLA S.A.). Following this operation the direct interest of IBERDROLA, S.A. in that company remains unchanged.

Acquisition by IBERDROLA S.A. of 0.38% of DISTRIBUIDORA ELECTRICA DE ELORRIO (DISELEC), such that IBERDROLA has a direct interest of 96.82%.

Acquisition by IBERDROLA S.A. of 100% of EMPRESA ELECTRICA DEL CABRIEL, such that IBERDROLA has a direct interest of 100%.

Reduction in share capital of ENERGYWORKS VENEZUELA (100%-owned by IBERDROLA GENERACIÓN, in turn 100%-owned by IBERDROLA, S.A.), such that the interest of IBERDROLA S.A. in that company remains unchanged. Increase in share capital in IBERDROLA RENEWABLE ENERGIES USA, LIMITED (100%-owned by IBERDROLA ENERGÍA RENOVABLES II, in turn 100%-owned by IBERDROLA, S.A.), such that IBERDROLA's indirect interest in that company remains unchanged.

Acquisition, by IBERDROLA ENERGÍA RENOVABLES SAU, (100%-owned by IBERDROLA, S.A.), of 80% of the Estonian company OUSAÜHING RAISNER, giving IBERDROLA, S.A. an indirect interest of 80% in that company.

Acquisition, by IBERDROLA ENERGÍA RENOVABLES SAU (100%-owned by IBERDROLA, S.A.) of 100% of the Hungarian company EC

ENERGOCONSULT MERNÖKSZOLGALATI, giving IBERDROLA, S.A. an indirect interest of 100% in that company.

Incorporation by IBERDROLA ENERGÍA RENOVABLES SAU, (100%-owned by IBERDROLA, S.A.), of ENERGIAS MARINAS DE CANTABRIA S.A., with a shareholding of 60%. Following this operation the indirect interest of

IBERDROLA, S.A. in that company is 60%.

Acquisition by IBERDROLA ENERGÍA RENOVABLES SAS (100%-owned by IBERDROLA ENERGIAS RENOVABLES, SAU, in turn 100% held by

IBERDROLA S.A.) of 100% of the French company PERFECT WIND, giving IBERDROLA, S.A. an indirect interest of 100% in that company.

Acquisition by PERFECT WIND (100%-owned by IBERDROLA ENERGIAS RENOVABLES, SAS, in turn 100% held by IBERDROLA ENERGIAS

RENOVABLES, SAU, in turn 100% held by IBERDROLA S.A.) of 100% of the French company FERME EOLIEN DE BUCHFELDM SARL, giving

IBERDROLA, S.A. an indirect interest of 100% in that company.

Acquisition by IBERDROLA ENERGÍA RENOVABLES SAS (100%-owned by IBERDROLA ENERGIAS RENOVABLES, SAU, in turn 100% held by

IBERDROLA S.A.) of 100% of the French company PARC EOLIEN LA NOURAIS, giving IBERDROLA, S.A. an indirect interest of 100% in that company.

Acquisition by IBERDROLA REGENERATIVE ENERGIEN, GMBH (100% held by IBERDROLA ENERGÍA RENOVABLES SAU, in turn 100%-owned by IBERDROLA, S.A.) of 100% of the German company WINDFARM WIRFUS Gmbh, so that the indirect interest of IBERDROLA S.A. in that company is 100%. Acquisition by IBERDROLA REGENERATIVE ENERGIEN, GMBH (100% held by IBERDROLA ENERGÍA RENOVABLES SAU, in turn 100%-owned by IBERDROLA, S.A.) of 100% of the German company EBV WINDPARK 23, Gmbh, so that the indirect interest of IBERDROLA S.A. in that company is 100%. Acquisition by IBERDROLA REGENERATIVE ENERGIEN, GMBH (100% held by IBERDROLA ENERGÍA RENOVABLES SAU, in turn 100%-owned by IBERDROLA, S.A.) of 100% of the German company RASTENBERG, Gmbh, so that the indirect interest of IBERDROLA S.A. in that company is 100%.

Acquisition, by PERFECT WIND (100%-owned by IBERDROLA ENERGIAS RENOVABLES, SAS, in turn 100% held by IBERDROLA ENERGIAS

French company PARC EOLIEN DE LANEUVILLE AU RUPT, giving IBERDROLA, S.A. an indirect interest of 100% in that company.

Acquisition by IBERDROLA ENERGIA ÖDNAWIANA (100% held by IBERDROLA ENERGÍA RENOVABLES SAU, in turn 100%-owned by IBERDROLA, S.A.) of 100% of the Polish company ENERGIA WIATROWA KARSCINO S.p. Z.O.O.EWK, so that the indirect interest of IBERDROLA S.A. in that company is 100%.

Increase in share capital in ENERBRASIL (100%-owned by IBERDROLA ENERGÍA RENOVABLES SAU, in turn 100%-owned by IBERDROLA, S.A.), such that IBERDROLA's indirect interest in that company remains unchanged. Acquisition, through EME DÓLAR UNO, EME HUENEJA TRES, EME DÓLAR TRES Y EME FERREIRA DOS, each with a shareholding of 10.45% (each company being 100% held by IBERDROLA ENERGIAS RENOVABLES DE ANDALUCIA, SAU, in turn 100% held by IBERDROLA ENERGIAS RENOVABLES, SAU, in turn 100% held by IBERDROLA, S.A), of 41.80% of SISTEMA ELÉCTRICO DE CONEXIÓN HUENÉJA, S.L., such that

IBERDROLA’S interest in this company is 41.80%.

Incorporation, through EMPRESA ELECTRICA DE GUATEMALA Y CREDIEGSA (80,88%-owned by DECA II, with is 49.01% owned by

IBERDROLA ENERGIA S.A., in turn 100% held by IBERDROLA S.A.), of 39,64% of the real estate company INMOBILIARIA DESARROLLADORA EMPRESARIAL DE AMERICA, S.A. (IDEA), giving IBERDROLA, S.A. an indirect interest of 39.64% in that company.

Capital buy-back in DECA II (49.01%-owned by IBERDROLA ENERGÍA S.A., in turn 100%-owned by IBERDROLA, S.A.), such that IBERDROLA's indirect interest in that company remains unchanged.

Incorporation by IBERDROLA INGENIERIA Y CONSTRUCCION, S.A. (100% owned by IBERDROLA, S.A.) of the Kenyan company IBERDROLA

ENGINEERING AND CONSTRUCTION KENYA INTERNATIONAL, giving IBERDROLA an indirect interest of 100% in that company.

Acquisition by IBERDROLA INGENIERIA Y CONSTRUCCION, S.A. (100% owned by IBERDROLA, S.A.) of the German company BLITZ 2004 B415, Gmbh , which changed its name to IBERDROLA ENGINEERING AND

CONSTRUCTION GERMANY, GMBH, giving IBERDROLA an indirect interest of 100% in that company.

Acquisition by IBERDROLA INGENIERIA Y CONSTRUCCIÓN, S.A. (100% owned by of IBERDROLA S.A.) of 15.84% in IBERDROLA CONSULTORIA E SERVIÇOS DO BRASIL, LTDA, such that IBERDROLA's indirect interest in that company remains unchanged.

E - 5. Issues, redemptions or cancellations of debt

ISSUE DATE REDEMPTION DATE

NOMINAL AMOUNT REDEEMED (€)

ID I. May 57 31.05.57 02.01.06 92.554, 00 (L) ID I. Apr 58 20.04.58 02.01.06 87.145, 00 (L) ID. May 93 24.05.93 24.05.06 15.025.302, 50 (R) ID I. Aug 91 06.08.91 06.08.06 24.813.260, 94 (R) (L): Lottery (R): Remainder

E - 6. Changes of Directors or the Board of Directors

One of the resolutions adopted at the General Meeting held on 30 March 2006 was the following:

RESOLUTIONS RELATINGTO ITEM 10 (Item Ten on the Agenda)

• Ratification of Directors appointed by cooptation since the last General Meeting:

a) Ratification of the appointment as Director of Mr Xabier de Irala Estévez, agreed by the Board Meeting dated 20 April 2005.

b) Ratification of the appointment as Director of Mr Jesús María Matía, agreed by the Board Meeting dated 20 April 2005.

The General Meeting of Shareholders, on the proposal of the Board of Directors, adopted the following resolutions.

a) To ratify, pursuant to s. 138 of the Consolidation of the Corporations Act and Art. 48.3 of the Articles of Association, the appointment by cooptation by the Board on 20 April 2005 of Mr Xabier de Irala Estévez as Director, which appointment was made by resolution stating literal as follows, which is fully ratified by the General Meeting:

“5º.- To appoint as member of the Board of Directors by cooptation, pursuant to s. 138 of the Consolidation of the Corporations Act and Art. 48.3 of the Articles of Association, on the proposal of the Board of BBK - shareholder of

IBERDROLA, S.A. – and to reserve approval or ratification until the first

subsequent General Meeting of Shareholders of Mr Xabier de Irala Estévez, who is a shareholder of the company, of full age, married, with Spanish nationality and whose business address for this purpose Calle Gran Vía nº 30, Bilbao, with National ID Nº 04.847.996-X to cover the vacancy in the Board left by Mr.

Santiago Mayner Oyarbide. The new Board Member will be classified as external director representing substantial shareholders, and will exercise his duties as such until 16 June 2006, the date corresponding to the end of the term of Mr. Santiago Mayner Oyarbide whom he substitutes.

The Board of Directors expressly noted that Mr. Xabier de Irala Estévez, attending the meeting, accepted the position as member of the Board of

Directors of the Company, as well as his declaration of not being affected by any legal incompatibility for performing the corresponding duties.

The express formal acceptance of Mr Xabier de Irala Estévez of the terms of Article 17 of the Rules governing the Board of Directors relating to resignation and removal from the Board, as well as the obligation set out in Article 49 of the Articles of Association to deposit ten thousand (10,000) shares of the Company as a guarantee for any liability he may incur during the performance of his duties was noted, and the Secretary delivered to him a copy of the Articles of

Association and Regulations that govern the Company.”

b) To ratify, pursuant to s. 138 of the Consolidation of the Corporations Act and Art. 48.3 of the Articles of Association, the appointment by cooptation by the Board on 20 April 2005 of Mr Jesús María Cadenato Matía as Director, which appointment was made by resolution stating literal as follows, which is fully ratified by the General Meeting:

“6º.- To appoint as member of the Board of Directors by cooptation, pursuant to s.138 of the Consolidation of the Corporations Act and Art. 48.3 of the Articles of Association, on the proposal of the Board of BBVA - shareholder of

IBERDROLA, S.A. – and to reserve approval or ratification until the first

subsequent General Meeting of Shareholders of Mr Jesús María Cadenato Matía, who is a shareholder of the company, of full age, married, with Spanish

nationality and whose business address for this purpose is Paseo de la Castellana nº 81, Madrid, , with National ID Nº 14.917.785-P to cover the vacancy in the Board left by Mr. José Antonio Fernández Rivero. The new Board Member will be classified as external director representing substantial shareholders, and will exercise his duties as such until 16 June 2006, the date corresponding to the end of the term of Mr. José Antonio Fernández Rivero whom he substitutes.

The Board of Directors expressly noted that Mr. Jesús María Cadenato Matía, attending the meeting, accepted the position as member of the Board of

Directors of the Company, as well as his declaration of not being affected by any legal incompatibility for performing the corresponding duties.

The express formal acceptance of Mr Jesús María Cadenato Matía of the terms of Article 17 of the Rules governing the Board of Directors relating to

resignation and removal from the Board, as well as the obligation set out in Article 49 of the Articles of Incorporation to deposit ten thousand (10,000) shares of the Company as a guarantee for any liability he may incur during the performance of his duties was noted, and the Secretary delivered to him a copy of the Articles of Association and Regulations that govern the Company.”

• The Board of Directors, in meeting on 26 April 2006, adopted unanimously the following resolutions:

1 – To accept the resignation as Director, effective from the date of the meeting, presented by the following members: Mr. Iñigo De Oriol Ybarra, Mr. Jose Antonio Garrido Martinez, Mr. Javier Herrero Sorriqueta and Mr. Ignacio de Pinedo Cabezudo.

2 – To carry out the resolution adopted by the Board of Directors in meeting held on 20 April 2005, notified to the CNMV on the same date, registered under Entry No 2005 035264, pursuant to which Mr José Ignacio Sánchez Galán was named Chairman of the Board, substituting Mr Iñigo de Oriol Ybarra, remaining as Chief Executive Officer and resigning as Vice-Chairman, all of which he accepted.

3 – To carry out the resolution referred in paragraph 2 above pursuant to which it was agreed, when a vacancy arose, to name as member of the Board of Directors by cooption, subject to approval or ratification by the first subsequent General Meeting of Shareholders, of Mr. Iñigo de Oriol Ybarra, shareholder of the company, who will be classified as “Other external Director”, and who accepts the position.

4 - To carry out the resolution adopted by the Board of Directors in meeting held on 22 April 2005, notified to the CNMV on the same date, registered under Entry No 2005 066734, pursuant to which it was agreed that Mr Xabier de Irala Estévez, as Chairman of BBK, long term shareholder of IBERDROLA, would cover the first available vacancy on the Executive Committee of the Board of Directors. Accordingly, there being a vacancy on the Executive Committee of the Board of Directors due to the resignation of the members mentioned in paragraph 1 above, Mr Xabier de Irala Estévez is named member of the Executive Committee, accepting this position and resigning as member of the Auditing and Oversight Committee.

• The Board of Directors, in meeting on 24 May 2006, adopted unanimously the following resolutions:

1 – To accept the resignation as Director, effective from the date of the meeting, presented by the following members: Mr. César de la Mora Armada, Mr. Antonio Garay Morenés and Mr. Antonio Mª de Oriol y Diaz-Bustamante.

2- To name as Vice-Chairmen of the Company the Independent Directors Mr. Juan Luis Arregui Ciarsolo and Mr. Victor de Urrutia Vallejo.

3 – To name as members of the Audit and Compliance Committee the

Independent Directors Mr. Julio de Miguel Aynat – who will be Secretary of the committee – and Mr. Sebastian Battaner Arias.

4 – To appoint Mr. Julian Martinez-Simancas Sanchez as Vice-Secretary of the Board of Directors of the Company.

• The Board of Directors, in meeting on 7 June 2006, adopted unanimously the following resolutions:

1 – To accept the resignation as Director and member of the Executive

Committee, effective from the date of the meeting, presented by Mr. Jesús María Cadenato Matía, external director representing substantial shareholders.

2 - To appoint as members of the Board of Directors by cooptation, subject to approval or ratification at the first subsequent General Meeting of Shareholders, Mrs. Inés Macho Stadler, Mr. Braulio Medel Cámara and Mr. José Carlos Pla Royo, who, once the respective acceptances are recorded pursuant to any of the forms established by Article 142 of the Commercial Regulations, will be classified as “Independent Directors” for the first two, and “external director representing substantial shareholders” for the last, on proposal by BBVA, shareholder of Iberdrola, S.A. ".

3 – To appoint Mr. José Carlos Pla Royo as member of the Executive Committee, classifying him, as has been noted as “external director representing substantial shareholders” once his acceptance has been recorded.

E -7 Modifications to the Articles of Association

One of the resolutions adopted at the General Meeting held on 30 March 2006 was the following:

RESOLUTIONS RELATED TO ITEM THREE (Item Three on the Agenda)

• Modification of certain articles of the Articles of Association and Regulations governing the General Meeting of Shareholders:

a) Modification of Article 19 of the Articles of Association and Article 8 of the Regulations of Shareholders Meetings, in order to adapt them to the provisions of the First Final Provision of Law 19/2005, of 14 November, on the European Corporations registered in Spain, as regards the

extension of the term for publishing the notice of General Meeting and the right of shareholders to request the publication of an any additional notification including new items on the Agenda.

b) Modification of Article 22 of the Articles of Association and Article 10 of the Regulations of Shareholders Meetings in order to eliminate the requirement for a minimum number of shares in order to be able to assist a General Meeting of Shareholders.

The General Meeting of Shareholders, on the proposal of the Board of Directors, adopted the following resolutions.

a) To approve the new text of Article 19 of the Articles of Association as well as that of Article 8 of the Regulations of the Shareholders Meetings, in order to adapt them to the provisions of the First Final Provision of Law 19/2005, of 14 November, in the following terms:

Articles of Association

“Article 19. Notice of General Meeting

1.

2.

a)

b)

c)

3.

4.

5.

Regulations of the General Meeting

“Article 8. Notice of General Meeting.

1.

2.

a)

b)

c)

least one percent (1%) of the Share Capital will have the right to request matters to be included in the Agenda of the General Meeting that is called for this purpose.

3.

4.

5.

a)

b)

c)

d)

6.

of the notice. The supplementary notice must be published at least fifteen (15) days before the date set for the General Meeting.

7.

b) To approve the new text of Article 22 of the Articles of Association and Article 10 of the Regulations of Shareholders Meetings in order to eliminate the requirement for a minimum number of shares in order to be able to assist a General Meeting of Shareholders, in the following terms:

Articles of Association

“Article 22. Right to attend

1. Any person holding shares with voting rights may attend a General Meeting and take part in its deliberations with right to be heard and to vote.

2. To exercise the right of attendance, shareholders must have the shares registered in their name in the corresponding company books five (5) before the day the General Meeting is to be held. This shareholding shall be certified using an attendance card or certificate of legitimacy issued by the entity or entities responsible for the company books, or any other means admitted by laws in force.

3. The members of the Board of Directors must attend the General Meetings. The Directors, Technical staff and other persons who have an interest in the proper functioning of corporate matters may be authorised by the Board of Administration to attend the General Meeting. The non-attendance of either will not affect the validity of the General Meeting.

4. The Chairman may allow the press, financial analysts and any other person s/he considers fit to have access to the General Meeting, however the General Meeting may revoke this permission.

Regulations of the General Meeting

1. Any person holding shares with voting rights may attend a General Meeting and take part in its deliberations with right to be heard and to vote.

2. To exercise the right of attendance, shareholders must have the shares registered in their name in the corresponding company books five (5) before the day the General Meeting is to be held. This shareholding shall be certified using an attendance card or certificate of legitimacy issued by the entity or entities responsible for the company books, or any other means admitted by laws in force.

E -8 Transformations, mergers or splits

Change in the corporate name of IBERDROLA ENERGIAS RENOVABLES II, SAU, which becomes IBERDROLA ENERGIAS RENOVABLES, SAU. Merger by absorption, by IBERENOVA PROMOCIONES, S.A. (100%-owned by IBERDROLA ENERGÍA RENOVABLES SAU, in turn 100%-owned by IBERDROLA, S.A.), of its subsidiary PARQUES EÓLICOS REUNIDOS, effective as of 01-01-06.

E - 9 Changes in the institutional regulation of the sector that significantly affect the economic and financial situation of the Company or Group.

Up to the 30th September 2006, the following regulations were published, which may have a relevant effect on the activity of the electricity and gas sector:

ELECTRICITYSECTOR

• Royal Decree-Law 3/2006 of 24 February, modifying the means for matching offers for sale and purchase of energy presented simultaneously on the daily and interdaily electricity production market by actors in the electricity sector belonging to the same corporate group.

• Correction of errors in Royal Decree-Law 3/2006 of 24 February. In this provision, the matching amounts of electrical energy offered and matched for these actors were assimilated to physical bilateral contracts, made prior to the program resulting from matching the daily market (before correcting the textual mistake, it read “before matching on the daily market”), so that these actors can only participate in the program resulting from the matching on the basis of the net position of the group to which they belong (before correction, the text indicated “they may only participate in the matching of the net position").

Only offers for sale under the ordinary regime and the purchase offers made by distributors will be taken into account for this. In relation to payment of the activities regulated by the CNE (National Energy Commission) during 2006, the provisional price to be considered for distributors of energy purchased on the basis of this assimilation mechanism was 42.35 €/MWh. In addition, due to the internalisation of the value of greenhouse gas emission rights in price formation in the wholesale electricity market, this Royal Decree reduces the remuneration of the affected generating units by

equivalent amounts. What’s more, due to the high volume of tariff shortfalls generated to date in 2006 it is advisable to discount the value of the emission rights in order to determine the quantity of this deficit.

• Royal Decree-Law 4/2006 of 24 February, modifying the functions of the CNE (National Energy Commission).

This Royal Decree-law modifies the functions of the CNE establishing a new text for Additional Provision 11 of Law 34/1998 of 7 October on the

Hydrocarbon Sector, which corrected a situation which was considered inadequate from two perspectives.

Thus, on the one hand it expanded the 14th function of the CNE as regards purchases that require its authorisation: "purchase of shareholding in

companies with activities considered regulated o activities that are subject to administrative intervention that implies a special control” (nuclear and coal-fired power stations, activities in the electricity systems in the islands and outside the peninsular, gas storage activities using international gas pipelines that terminate or transit through the Spanish territory). This authorisation will also be required for direct purchases of assets required to carry out these activities.

On the other hand, in relation to any denial to grant this authorisation, a new cause is added to that of the existence of significant risks, being “protection of the general interest in the energy sector and, in particular, guaranteeing that the policy objectives of the sector are adequately followed, with special concerns relating to assets that are considered strategic”.

• Order ITC/913/2006 of 30 March, approving the method for calculating the cost of each of the fuels used and the procedure for dispatching and payment of energy in the island and extra-peninsular electricity systems.

The content is summarised below with the following order.

• Order ITC/914/2006 of 30 March, establishing a method for calculating the retribution for the power guarantee for energy generation plants under the ordinary regime for island and extra-peninsular electricity systems.

Both these orders develop the terms of Royal Decree (RD) 1747/2003 regulating the extra-peninsular electricity systems. Being regulatory

instruments, they do not modify the contents of this RD, so the characteristics regarding retribution and performance of activities and basic operation do not change, i.e.:

ƒ Regulated payment of investment costs via the Power Guarantee ƒ Right to charge for the Power Guarantee from planned facilities. ƒ Dispatching on standard costs

ƒ Intermediate payments of distributors and marketers at the peninsular market price

ƒ The CNE makes the final payment of the retribution regulated by the Ministerial Orders.

These Ministerial Orders permit the provisional 2001-2005 cycle to be closed, essentially based on book costs and establishes the basis for future retribution based on standards. This refers to electricity production, and does not cover transport and distribution.

The methodology for dispatching and payment allows the REE to start performing its functions under the RD and enables the energy that has been traded since publication of the RD to be paid for.

• Resolution of 17 March 2006, of the General Secretary for Energy, approving Operation Procedures 4.1 “Resolution of congestion on the France-Spain interconnection” and 3.1 “Programming Generation”, to adapt them to Order ITC/4112/2005 of 30 December.

This resolution approves procedure PO 4.1 which develops a process for resolving congestion on the France-Spain interconnection using a system of explicit coordinated auctions (Phase I) set out in Annex I of Order

ITC/4112/2005 of 30 December, which establishes the regime for performing intra-community and international electricity exchanges.

In addition Red Electrica de España S.A. was authorised to participate in the explicit auction process for power supply on the France-Spain

interconnection, to purchase the exchange capacity required to perform the contracts to supply energy from EDF to REE and from REE to EDF, referred to in Transitional Provision Nine of Law 54/1997.

The resolution also approves PO 3.1 to establish a process for daily

scheduling electricity generation on the basis of matching offers for sale and purchase of energy resulting from the daily and interdaily markets and from the communication of performance of bilateral contracts with physical delivery, so that demand is covered and the safety of the system is guaranteed.

• Resolution of 16 February 2006 of the National Energy Commission establishing, pursuant to Article 34 of Addition Provision Three of Royal Decree 6/2006 of 23 June, the list of main and dominant operators in the energy sectors.

This Resolution also affects the gas sector, so it is not mentioned in the following section.

The list of main operators takes into account the structure of corporate groups that exist at the time the list is made up. The list is set out below, together with last year's list so as to show changes:

2005 2006

1 Endesa Group Endesa Group

Iberdrola Group Iberdrola Group

• Roy tari T mo

• Royal Decree-law 7/2006 of 23 June, adopting emergency measures in the e

The ƒ

onsumers. They are considered inefficient

tion, as recently certified by the CNE, is very high.

rding to the evolution of market prices for the production

ƒ

ugh a series of measures such as 2

3 4

Red Eléctrica Group Viesgo Generación, S.L.

2005 2006

1 Repsol YPF-Gas Natural Group

2

3 Hidrocantábrico-Naturcorp Group BP España Group 4

5 BP España Group

Main Operators in the Electricity Sector

Main Operators in the Gas Hydrocarbon Sector

Unión Fenosa Group Unión Fenosa Group

Hidrocantábrico Group Hidrocantábrico Group 5

Repsol YPF-Gas Natural Group

Enagas Group Iberdrola Group

Iberdrola Group Hidrocantábrico-Naturgas Group

Endesa Group

al Decree 470/2006 of 21 April, modifying the percentage on electricity ffs destined to cover the nuclear moratorium.

he amount of this cost that is specifically attributed to the nuclear ratorium is set at 0.33 per cent of the electricity tariff.

nergy sector.

measures for the electricity sector are:

Elimination of the CTCs as they are currently considered inefficient and unnecessary. Their removal enables the contributions projected for this item to 2010 to go to benefit c

because they distort prices and were calculated on the basis of hypotheses that are currently obsolete. They are considered unnecessary as their degree of amortisa

ƒ A system of incentives to consume local coal, pursuant to which the Government is authorised to approve, for security motives, a system of premiums up to 10€/MWh; this includes a mechanism for varying these premiums acco

of electricity.

In line with the guidelines provided by the EU, energy performance through cogeneration is supported thro

removing the need for self-consumption of electricity rewarding no only electricity excesses but all co-generated electricity, removing thereby the asymmetry that exists to date.

ƒ Updating the system for premiums set out in the Law establishing the possibility that all plants be paid an additional amount as a premium over the market price.

ƒ

certain cases it does not permit

to

al ity

in the medium and long term.

ds vision

tim

an e percentage of sales of the previous

apacity attribution mechanisms in the system, enabling existing

• Royal Decree 777/2006 of 23 June, modifying Royal Decree 1866/2004 of 6 September, approving the National Plan for Assigning emission rights for

e in point 3 of the

o al

r conceded.

approved by Royal Decree 1165/1995 of 7 July.

Removing the compensation band for renewable energies between 80 and 90% of the average reference tariff, as in

the compensation to be sufficient for the development of alternative technologies.

ƒ Removing the limits imposed on the tariff calculation methodology review the average or reference tariff (currently set at a maximum of 1.4% plus an additional 0.6% for variations).

ƒ Unlinking the evolution of premiums and prices of plants in the speci regime as regards the latest increase in average or reference electric price set for July.

ƒ In the aim of establishing a mechanism for enabling bilateral contracts as an alternative for certain consumer groups, the contract period resulting from virtual auctions – currently limited to a maximum of 12 months – is increased

The measure established for the gas sector is equality for operators as regar gas storage. In the aim of guarantee stability of supply, a pro

guaranteeing this equality is introduced. In particular, the general purpose e-based criteria is substituted by a distribution system based on objective d transparent criteria, specifically th

year. This provision will permit the use of c that are most appropriate for current needs

infrastructure to be optimised and avoiding situations of monopolisation.

2005-2007.

The reform of the NPA is centred on modifying the tabl Plan, setting out the attribution per industrial sector. Thus,

1. Emission rights and the categories of activities are adjusted according t the extension made in application of by Law 1/2005, as amended by Roy Decree Law 5/2005 of 11 March.

2. The reserve for new entrants is unified.

3. Sector attribution ceilings are increased, at the expense of the reserve, fo those sectors which include installations for which judicial review has been

• Royal Decree 774/2006 of 23 June modifying the Regulation of Special Taxes

Law 22/2005 of 18 November, incorporating into the Spanish legal system several community directives relating to taxation of energy products and electricity, and the common tax regime applicable to mother and subsidiary companies in different Member States, and regulating the tax regime on transborder contributions to pension funds within the European Union, introducing modifications to Law 38/1992 of 28 December on Special Taxes, which require in turn the adaptation of the corresponding regulations set out

in the Regulation of Special Taxes, approved by Royal Decree 1165/1995 of

• ising the electricity tariff from 1 July

2006.

from 1 July 2006 is set at

shortfall in income on ayment of the regulated activities generated between 1 January 2005 and 31

ousand Euros.

ncreased on an rt and

• r

semester of 2006.

his Order aims to establish, for the transitory period of the second semester

isions of less interest are as follows:

• g,

referred to in Law 1/2005 of 9 March, regulating the regime

Resolution of 7 April 2006 of the General Secretary for Energy, approving

ution approves two Operative Procedures. OP 8.1 defines the network which is operated under the responsibility of the SO, together with

tem 7 July.

Royal Decree 809/2006 of 23 June rev

This Royal Decree establishes the average increase in the average or reference tariff for the sale of electricity, which as

1.38% over the price set on 1st January 2006, as well as how it applies to the current tariff structure, as a result of increasing the costs by the amount corresponding to the annuity for recovering on a lineal basis the annual net value over a period of 14 and a half years of the

p

December 2005, which amounts to 3,810,520 th The average or reference tariff is set at 7.7644 €/kWh. The tariff for the sale of electricity applied by distributors is i

average for all of them by 2.07% and the tariffs for access to the transpo distribution networks are maintained.

Order ITC/2129/2006 of 30 June regulating term contracts for electricity fo distributors during the second

T

of 2006, the obligations of distributors regarding the purchase of electricity in the term market managed by OMIP-OMIClear.

Other prov

Resolution of 8 February 2006, approving the regulations for registerin evaluating and informing on greenhouse gas emission rights

This resolution develops aspects relating to the accounting treatment of emission rights

for trading greenhouse gas emission rights and it also considers itself as developing the current General Accounting Plan, approved by Royal Decree 1643/1990 of 20 December.

•

Operating Procedures 8.1 “Definition of networks operated and monitored by the System Operator” and 8.2 “Operation of the production and transport system”.

This resol

the installations of other networks whose structural and real time operating data must be known by the SO so as to guarantee the security and reliability of the system.

OP 8.2 establishes the basic criteria that govern the activities of the SO regarding the technical management of the production and transport sys

for which it is responsible, setting out the obligations and actions of all the actors to whom this procedure applies.

RESOLUTION of 28 April 2006 of the

• Secretariat General for Energy,

approving a set of technical and instrumental procedures required for the

• nergy,

arket.

ing Article 4(3)(1) of Order

ITC/4112/2005 which establishes the regime applicable for intracommunity

• ay 2006 of the General Secretary for Energy, modifying ution of

account the agreement reached with the French Energy Regulation Commission (CRE) in relation to the Rules for Assigning

RESOLUTION of 24 May 2006 of the Secretariat General for Energy,

improvements and reduce complexity in the system, which have been subject to a series of modifications to which they have been progressively submitted

• n of 7 April 2006 of the CNE, modifying Resolution of 26 February ent and e

Order ITC/1652/2006 of 20 April, declaring the definitive end of operations of the José Cabrera (Guadalajara) Nuclear Power Station and establishing the conditions for activities to be performed until decommissioning is authorised. adequate technical management of the island and extra-peninsular electricity systems.

RESOLUTION of 11 May 2006 of the Secretariat General for E modifying certain Rules of Operation of the electricity production m

This resolution publishes the modifications made to the text of the Rules of Operation of the Electricity Production Market to include the content of Annex II of RD 1454/05 of 2 December, modifying certain provisions relating to the electricity sector, as well as the content of Instruction 1/2006 which describes the procedure for apply

and international exchanges of electricity.

Resolution of 18 M

resolution of 17 March, approving Operation Procedures 4.1 “Resol

congestion on the France-Spain interconnection” and 3.1 “Programming Generation”, to adapt them to Order ITC/4112/2005 of 30 December.

Taking into

Capacity for the France-Spain Interconnection (IFE Rules), which implement from 1 June a coordinated system of explicit annual, monthly, daily and interdaily auctions, this Resolution modifies that of 17 March so as to carry out the coordinated auctions for June.

•

approving the Rules of Operation of the daily and interdaily electricity production market.

This Resolution includes in one single text the Rules which establish

previously.

Resolutio

2004, establishing the implementation of the procedure for self-assessm and payment and the conditions for paying the fees set out in parts two three of additional provision 12.2, of Law 34/1998 of 7 October, on th electricity and gaseous hydrocarbons sector.

Order EHA/1094/2006 of 6 April, developing special characteristics of official secondary markets of derivative finan

•

cial instruments relating to

tures and options, apply to the official secondary markets of futures and options relating to energy.

• Resolution of 28 April 2006 of the General Secretary for Energy, approving

cesses required to present and may em, so that they are compatible with ing the production units and the transport network.

Resolution of 13 March 2006, of the General Directorate for Energy Policy

publishes the following Detailed Protocols relating to technical management of the gas system:

3. Demand forecasts.

PD-04. Communication Mechanisms.

PD-05. Procedure for determining the energy unloaded by methane ships.

• of 29 March 2006, of the General Directorate for Energy Policy and Mining, publishing new maximum prices for the sale of gas for use as raw material.

•

material.

• of 29 May 2006 of the General Directorate for Energy Policy and Mining, publishing new maximum prices for the sale of gas for use as raw material.

energy.

In accordance with the Final Provision of Royal Decree 1814/1991 of 20 December, this Order aims to regulate the special characteristics that, as regards the general purpose rules for official secondary markets of financial fu

Operating Procedures 3.5 “Scheduling of maintenance of the distribution networks which affects the Electricity System”.

This describes the information flows and pro

authorise the plans for maintaining the distribution network when this appreciably affect the operation of the syst

the plans for maintain

GASSECTOR •

and Mining, establishing detailed protocols for the Rules governing the Technical Management of the Gas System.

This resolution

PD-01. Measurement

PD-02. Procedures for distribution. PD-0

PD-06. Operating rules for unloading methane ships. Resolution

Resolution of 26 April 2006 of the General Directorate for Energy Policy and Mining, publishing new maximum prices for the sale of gas for use as raw

Royal Decree-law 7/2006 of 23 June, adopting emergency measures in the energy sector. • • arding ns ICG 01 to 11.

Resolution of 25 July 2006, of the General Directorate for Energy Policy and Mining, regulating the conditions for assignation and the implementing

g the basic implementing conditions for interruptible tolls. It

•

g new maximum prices for the sale of gas for use as raw material.

• /2006 of 14 July establishing the rules for presenting accounting information by companies that carry out activities relating to

• Resolution of the General Directorate for Energy Policy and Mining ining which projects initiated in 2005 and 2006 have a right to specific ent: it approves the specific payment for distribution installation for 2005 and 2006.

This provision has been commented on in the section on the electricity sector.

• Resolution of 26 June 2006 of the General Directorate for Energy Policy and Mining, publishing new maximum prices for the sale of gas for use as raw material.

Royal Decree 919/2006 of 28 July, approving the technical rules reg distribution and use of gaseous fuels and supplementary technical instructio

This provision establishes the technical conditions and guarantees that plants for distributing and using gaseous fuels and gas devices must comply with. •

procedure relating to the interruption of the gas system.

This Resolution develops Article 12 of Min. Order ITC/4100/2005 establishin

modifies section 10.6.1 of the NGTS. It came into force on 6 August 2006.

• Resolution of 27 July 2006 of the General Directorate for Energy Policy and Mining, publishing new maximum prices for the sale of gas for use as raw material.

Resolution of 28 August 2006 of the General Directorate for Energy Policy and Mining, publishin

• Resolution of 27 September 2006 of the General Directorate for Energy Policy and Mining, publishing new maximum prices for the sale of gas for use as raw material.

Order ITC/2348

natural gas and gases created by canalisation. This develops the obligation to present accounting information, including standard models. This establishes the obligation to ensure that no income transfers are made. Companies must name an interlocutor.

determ paym

• Resolution of 28 July 2006 of the General Secretary for Energy, modifying section 3.6.3 “Viability of ship unloading schedules” of the Technical Man

limi into

E - 14

agement Rules for the Gas System “NGTS-3”: It establishes a maximum t for tank reserves of 8 days or 300 GWh as a monthly average. It came force on 18 August 2006.

other significant events

t from has 280 icity power at an advanced stage of

, Castilla y León.”…

On 9 Ja ock

Market

note relating to the position of Iberdrola

On 18 January 2006, the following notifica Market

tium, which includes Visabeira, Alberto Mesquita, MECI y ting a

e following notification was made to the National Stock Market

s e the market opens (9 a.m. Madrid

made on the same day in Madrid.” On 1 F

Market

On 9 January 2006, the following Relevant Event was notified to the National Stock Market Commission:

“We are glad to notify you that IBERDROLA has bough Naturener 100% of its subsidiary Naturener Eólica, which Megawatts (MW) of electr

development in the autonomous communities of Castilla-La Mancha Andalucía and

nuary 2006, the following notification was made to the National St Commission:

The Company delivers a

Portugal in relation to EDP, Galp and the reorganisation of the Portuguese electricity sector.

tion was made to the National Stock Commission:

Iberdrola and Gamesa, through the Nuevas Energías Ibéricas consor

Galucho, have today presented in Lisbon an industrial project for building five aerogenerator factories in Portugal, represen

significant investment. On 27 January 2006, th

Commission:

“Iberdrola notifies that its (non audited) results for 2005 will be presented to the CNMV and the Governing Councils of the Stock Market on Thursday 9 February 2006 befor

time).

A presentation will be

ebruary 2006, the following notification was made to the National Stock Commission:

“We are glad to inform you that IBERDROLA, with approval of the Board of Directors, will offer its employees, for the second year in a row, the possibility of receiving part of their salary in shares. Shares will be

On 3 February 2006, the following Relevant Event was notified to the National Stock M

“Decision of the Council of Ministers pursuant to Article 17(b) of Law ng in the taking of control of Endesa S.A. by Gas Natural SDG, S.A. to certain conditions. …

On 3 F ational Stock

tes a Press Release relating to the Government’s

On 6 February 2006, the following notification was made to the National Stock Market Commission:

ommunicates that the Presentation of the Results of 2005

On 9 February 2006, the following Relevant Event was notified to the National Stock Market Commission:

es information on the results of the second semester

On 9 F ional Stock

Market Com

On 22 l

Stock M

nanimously the following resolutions:

al for Distributions as well as the Consolidated Annual Accounts

eting of Shareholders on the 29 and 30 March on first and second notice, respectively, with the following Agenda:"...

On 23 l

Stock M

delivered during March 2006.” …

arket Commission:

16/1989 of 17 July on Competition Control, to subject the approval of the merger consisti

ebruary 2006, the following notification was made to the N Market Commission:

Iberdrola communica

decision regarding Gas Natural’s public offer for Endesa.

The Company c

will be moved half an hour, to 9.30 a.m. on 09/02/2006.

The Company provid of 2005.

ebruary 2006, the following notification was made to the Nat mission:

The Company provides a presentation of the results of the second semester of 2005.

February 2006, the following Relevant Event was notified to the Nationa arket Commission:

“We are glad to announce that today the Board of Directors of Iberdrola approved u

I. Present the Annual Accounts, the Management Report and the Propos

and Management Report for 2005. II. Call a General Me

February 2006, the following Relevant Event was notified to the Nationa arket Commission:

The company provides the Annual Report on Corporate Governance 2005.

for

On 24 February 2006, the following Relevant Event was notified to the National

“Following our notification made on 22 February, we attach a copy of

eral Meeting of Shareholders, as set out in the notice of call. The Report on Corporate

On 28 February 2006, the following Relevant Event was notified to the National Stock M

On 2 March 2006, the following notification was made to the National Stock

“We are glad to announce that IBERDROLA, through the Nuevas mpanies: Visabeira, Alberto Mesquita, MECI y Galucho, has bided on 24 February for the distribution of wind powered

2005. … On 7 M

Stock M

Unicaja notifies that it has increased its shareholding in Iberdrola to

On 10 March 2006, the following notification was made to the National Stock Market

e glad …

On 30 as notified to the National

Stock Market Commission:

to announce that the General Meeting of Shareholders held today has approved, with the favourable vote representing more

s set out in the Agenda which was communicated to you on 22nd February this year, documentation Stock Market Commission:

the documentation (on paper and scanned onto CD) that will available for shareholders on 24th of this month, in our webpage and at the corporate domicile, in relation to the Notice of Gen

Governance has already been presented to the Commission". …

arket Commission:

We attach the corrected text of the Resolution relating to Item nine of the Agenda of the General Meeting of Shareholders of this Company, which substitutes the notice provided on 23 February. …

Market Commission:

Energías Ibéricas (NEI) Consortium, which includes Gamesa and the following Portuguese co

electricity in Portugal, pursuant to a call made by the Portuguese government in

arch 2006, the following Relevant Event was notified to the National arket Commission:

1.5% of Share capital.

Commission:

“Following the Notification made on 1st February this year, we ar to announce that Iberdrola will deliver shares in the Company to its employees during next week, as part of their variable retribution.” March 2006, the following Relevant Event w

“We are glad

than two thirds of the share capital present and represented at the meeting, each and every resolution

pertaining to which - in addition to being made available to sharehold - was provided ers you on 23rd February." … On 5 A Market ebrada en Toledo. On 17 Market st On 17 Market ission: f rter of 2006. On 27 l Stock M On 27 Stock M

EDP – Energías de Portugal, from 5.7% to 9.5%. On 27 April 2006, the following Relevant Event was notified to the National Stock Market Commission:

rovides more information on the increase in shareholding in EDP-Energías de Portugal.

On 27 Market

On 2 May 2006, the following Relevant Event was notified to the National Stock

Iberdrola has entered the wind power generation market in the USA

rth pril 2006, the following notification was made to the National Stock Commission:

La sociedad remite nota de prensa de la Conferencia sobre Energías Renovables cel

April 2006, the following notification was made to the National Stock Commission:

The Company publishes the evolution of the Energy Balance for the fir semester of 2006

April 2006, the following notification was made to the National Stock Comm

The Company provides information on the forthcoming presentation o results of the first qua

April 2006, the following Relevant Event was notified to the Nationa arket Commission:

The Company publishes information on the results for the first term of 2006.

April 2006, the following Relevant Event was notified to the National arket Commission:

The Company announces that Iberdrola Portugal has increased its shareholding in

The Company p

April 2006, the following notification was made to the National Stock Commission:

The Company publishes its presentation on the results for the first term of 2006.

Market Commission:

having signed a contract to purchase 100% of Community Energy Inc. (CEI), based in Wayne (Pennsylvania). In addition, Iberdrola has signed a framework agreement with the Municipality of Bayannaoer, in No