Sunday, October 2

The Supreme Court declares the electricity social bond inapplicable due to lack of transparency

  • The high court considers that it is incompatible with the transparency required by European directives

  • The sentence is produced after consulting the CJEU after the Constitutional Court annulled a first ruling

The Supreme Court has declared the financing scheme of the social bonus established in 2013 in the electricity sector law is inapplicable for being incompatible with the European directive that establishes that public service obligations must be clearly defined, transparent, non-discriminatory and controllable, as well as guaranteeing electricity companies access, under equal conditions, to national consumers.

The Third Chamber estimates the contentious-administrative appeal filed by Viesgo Infraetructuras Energéticas, (formerly E.ON España) against the royal decree that developed the method to set the distribution percentages of the amounts to be financed relative to the social bonus. Article 45.4 of the electricity sector law established that the social bonus “will be assumed by the parent companies of the groups of companies or, where appropriate, companies that simultaneously carry out the activities of production, distribution and commercialization of electrical energy”.

The court considers that “the brief indication that, since it is a regulated activity, developed under a legal monopoly and exclusivity, it would not be possible for the sole carrier to recover from the market the possible cost that it would have to assume in said concept”.

Relating only to certain agents

It also states that “the decision that among the agents involved in the other three sectors of the electricity system –generation, distribution and marketing– the cost of financing the electricity system must be considered lacking in clarity and transparency as well as discriminatory, without justification social bonus It is only made to fall on the entities or business groups that simultaneously develop the three activities and that have the character of vertically integrated groups, on the other hand being exempted from this burden all those companies or business groups whose activity is focused on only one or even two of these sectors of activity ”.

The Chamber observes that it is not duly justified that the financing of the social bond falls on certain agents of the electricity system, some of them with very little specific weight in the sector as a whole, exempting, on the other hand, other entities or business groups that may be in a better position to assume that cost, either because of their turnover, because of their relative importance in some sectors of activity or because they carry out two of those activities simultaneously and in an integrated manner.

For its effects

The sentence admits that this article is no longer in force, because the law was replaced by another in 2016 and 2018, but it understands that it must be pronounced, because during the time it was applied, it had effects. Hence, it declares the right of Viesgo Infraestructuras Energéticas to be compensated for the amounts paid as a social bonus in application of said royal decree, and that all amounts paid for this concept plus the corresponding legal interests from the date on that the payment was made until the refund.

Related news

The Supreme Court has already declared, as a result of another resource from that same company that the royal decree of 2014, which developed the methodology for setting the distribution percentages of the amounts to be financed relative to the social bonus, were incompatible with European regulations. The decision was appealed by the General State Administration to the Constitutional Court, which in 2019 annulled the sentence and declared the right to a public process with all guarantees violated.

The Chamber raised a question for a preliminary ruling before the Court of Justice of the European Union (CJEU) which, in a ruling issued in October of this year, ruled that European regulations oppose the cost of a public service obligation, such as the bond social, falls only on the parent companies of the groups of companies or, where appropriate, companies that simultaneously develop the activities of production, distribution and commercialization of electrical energy, since this criterion leads to a difference in treatment between the different companies that operate In that market, that is not justified.

Reference-www.elperiodico.com

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