OPINION OF ADVOCATE GENERAL
BOBEK
delivered on 15 April 2021(1)
Case C‑683/19
Viesgo Infraestructuras Energéticas, SA
v
Administración General del Estado,
Iberdrola, SA,
Naturgy Energy Group, SA, formerly Gas Natural SDG, SA,
EDP España, SA,
CIDE, Asociación de Distribuidores de Energía Eléctrica,
Endesa, SA,
Agri-Energía, SA,
Navarro Generación, SA
(Request for a preliminary ruling from the Tribunal Supremo (Supreme Court, Spain))
(Reference for a preliminary ruling – Common rules for the internal market for electricity – Directive 2009/72/EC – Imposition of public service obligations – Financing of a regulated discount which applies only to certain companies – Requirements of transparency and non-discrimination)
I. Introduction
1. The applicants are companies operating on the Spanish electricity market. They were required to contribute to the financing of a social welfare measure for vulnerable consumers in Spain. The Spanish legislature declared that obligation to be a ‘public service obligation’, within the meaning of Article 3(2) of Directive 2009/72/EC. (2) One of the applicants challenged the compatibility of that financing obligation with EU law before the Tribunal Supremo (Supreme Court, Spain) (‘the Supreme Court’).
2. That court upheld the applicants’ action. In the Supreme Court’s view, the compatibility requirements under Article 3(2) of Directive 2009/72 constituted ‘acte clair’, which meant that no request for a preliminary ruling was necessary. However, upon appeal for the protection of constitutional rights, the Tribunal Constitucional (Constitutional Court, Spain) (‘the Constitutional Court’) set aside that judgment. It held that the Supreme Court had erred in finding the existence of ‘acte clair’ and, as such, infringed the constitutional rights of the Administración General del Estado (Spanish State Administration) in so far as it had declared domestic law to be incompatible with EU law without having first referred a request for a preliminary ruling to the Court.
3. Following that judgment, the Supreme Court referred the present request to this Court in order to enquire about whether the financing obligation imposed on the applicants is compatible with Article 3(2) of Directive 2009/72.
II. Legal framework
A. EU law
4. Directive 2009/72 replaced Directive 2003/54/EC (3) with a view to further developing the common rules for the internal market in electricity. Recital 50 thereof states the following:
‘The public service requirements, including as regards the universal service, and the common minimum standards that follow from them need to be further strengthened to make sure that all consumers, especially vulnerable ones, are able to benefit from competition and fair prices. The public service requirements should be defined at national level, taking into account national circumstances; Community law should, however, be respected by the Member States. The citizens of the Union and, where Member States deem it appropriate, small enterprises, should be able to enjoy public service obligations, in particular with regard to security of supply, and reasonable prices. …’
5. Article 2 of Directive 2009/72 provides:
‘For the purposes of this Directive, the following definitions apply:
…
21. “vertically integrated undertaking” means an electricity undertaking or a group of electricity undertakings where the same person or the same persons are entitled, directly or indirectly, to exercise control, and where the undertaking or group of undertakings perform at least one of the functions of transmission or distribution, and at least one of the functions of generation or supply of electricity;
…’
6. Article 3 of Directive 2009/72 concerns ‘public service obligations’ and consumer protection. By virtue of its subparagraphs 2 and 6:
‘2. Having full regard to the relevant provisions of the Treaty, in particular Article 86 thereof, Member States may impose on undertakings operating in the electricity sector, in the general economic interest, public service obligations which may relate to security, including security of supply, regularity, quality and price of supplies and environmental protection, including energy efficiency, energy from renewable sources and climate protection. Such obligations shall be clearly defined, transparent, non-discriminatory, verifiable and shall guarantee equality of access for electricity undertakings of the Community to national consumers. …
…
6. Where financial compensation, other forms of compensation and exclusive rights which a Member State grants for the fulfilment of the obligations set out in paragraphs 2 and 3 are provided, this shall be done in a non-discriminatory and transparent way.’
B. Spanish law
7. Entitled ‘Vulnerable consumers’, Article 45 of Ley 24/2013, de 26 de diciembre, del Sector Eléctrico (Law 24/2013 of 26 December 2013 on the electricity sector) (‘Law 24/2013’), states, in the relevant part:
‘2. The regulated discount shall apply to vulnerable consumers who meet the social, consumption and purchasing power characteristics determined by Royal Decree of the Council of Ministers. …
…
3. The regulated discount shall cover the difference between the value of the voluntary price intended for low-usage consumers and a base value, referred to as a “tariff of last resort”, and shall be applied by the relevant reference supplier to the invoices of consumers entitled to the regulated discount.
…
4. The regulated discount shall be treated as a public service obligation within the meaning of Directive [2009/72], and shall be borne by the parent companies of company groups or, where applicable, by companies that simultaneously carry on electricity production, distribution and retail activities.
The apportionment percentage of the sums to be financed shall be calculated, for each company group, on the basis of the relationship between, on the one hand, the total of the annual average number of supplies connected to the distribution companies’ distribution networks and the number of customers of the retailers held by the group, and, on the other, the total of all the annual average supply and customer values of all the company groups that are to be taken into account for the purposes of that apportionment.
That apportionment percentage shall be calculated annually by the Comisión Nacional de los Mercados y la Competencia [National Commission on Markets and Competition, Spain], in accordance with the procedure and conditions laid down by regulation. …
…
In any event, the contributions which each of those companies must make shall be paid into a specific deposit account created for that purpose by the administrative body responsible for its management.’
8. Real Decreto-ley 9/2013, de 12 de julio, por el que se adoptan medidas urgentes para garantizar la estabilidad financiera del sistema eléctrico (Royal Decree-Law 9/2013 of 12 July 2013 adopting urgent measures to guarantee the financial stability of the electricity system) (‘Royal Decree-Law 9/2013’), states, in its fifth recital, in the relevant part:
‘This Royal Decree-Law shall also amend the system governing how the costs of the regulated discount are to be borne.
…
On that basis, and in order to contribute to the necessary and urgent reduction in the costs of the system, it is deemed necessary to amend the scheme for the apportionment of costs introduced by Order IET/843/2012 … by requiring, by way of a public service obligation, that the cost of the regulated discount be borne by the parent companies of companies or company groups that carry on electricity production, distribution and retail activities, and which are vertically integrated groups.
The imposition of such a requirement on those parent companies makes it possible, even indirectly, for the burden to be shared between the main commercial activities of the electricity sector. Transmission activities are therefore excluded from such an apportionment, but that exception shall be regarded as justified because it is a regulated activity carried out under a statutory monopoly and exclusivity arrangement, bearing in mind that the single transmission undertaking cannot, unlike the abovementioned companies or company groups, recover from the market any cost it would have to bear in that regard, since that would ultimately frustrate the objective pursued by that amendment.’
9. Real Decreto 968/2014, de 21 de noviembre, por el que se desarrolla la metodología para la fijación de los porcentajes de reparto de las cantidades a financiar relativas al bono social (Royal Decree‑Law 968/2014 of 21 November 2014 laying down the methodology for setting the percentages for apportionment of the sums to be financed for the regulated discount) (‘Royal Decree‑Law 968/2014’), in Articles 2 and 3, sets out the methodology for financing the regulated discount provided for in Article 45(4) of Law 24/2013.
III. Facts, national proceedings and the questions referred
10. Real Decreto-ley 6/2009 (‘Royal Decree-Law 6/2009’) put in place a mechanism to offer certain consumers with particular social, consumption and purchasing power characteristics (‘vulnerable consumers’) a discount on the price of electricity in Spain. Accordingly, eligible consumers receive an automatic reduction in the price of electricity (‘the regulated discount’), which is applied directly to their electricity bill by the supplier of last resort. (4) Those suppliers thus charge eligible consumers a price that is lower than the market price for electricity. (5)
11. Originally, under Royal Decree-Law 6/2009, that system was financed by imposing a tax on all companies owning electricity production facilities. However, on 7 February 2012, the Supreme Court annulled Royal Decree-Law 6/2009 on the ground that its financing system was incompatible with Directive 2009/72 (‘the 2012 judgment’). (6) An appeal for the protection of constitutional rights (‘recurso de amparo’) brought against that judgment before the Constitutional Court was held to be inadmissible.
12. In order to take into account the 2012 judgment of the Supreme Court, and to replace Royal Decree-Law 6/2009, the Spanish legislature adopted Royal Decree-Law 9/2013. That law states, inter alia, that the Supreme Court did not specify a particular method for the allocation of the costs of the regulated discount, allowing the Spanish State Administration to opt for whichever system it deemed most appropriate. The obligation to bear the costs arising from the regulated discount therefore falls on ‘parent companies of groups of companies, or, where applicable, companies which simultaneously carry out production, distribution and retail activities of electricity’.
13. On 26 December 2013, Law 24/2013 was adopted. Article 45(3) of that law states that the regulated discount covers the difference between the price invoiced to eligible vulnerable consumers and the base price for electricity on the Spanish electricity market. Article 45(4) of that law then describes the regulated discount as a ‘public service obligation’. It also states that the financing thereof falls on ‘parent companies of groups of companies, or, where applicable, companies which simultaneously carry out production, distribution and retail activities of electricity’ (‘the mandatory contribution’).
14. On 21 November 2014, Royal Decree‑Law 968/2014 was adopted in order to implement Law 24/2013. It lays down the methodology for setting the percentages for the purposes of apportioning the sums to cover the financing of the system.
15. Orden IET/350/2014, de 7 de marzo, por la que se fijan los porcentajes de reparto de las cantidades a financiar relativas al bono social correspondientes a 2014 (Decree IET/350/2014 of 7 March 2014 fixing the distribution percentages of the amounts to be financed under the regulated discount for 2014 (‘Decree IET/350/2014’)) identifies the entities concerned by the mandatory contribution and fixes the distribution percentages of the amounts to be financed under the system as a whole for 2014. (7)
16. Pursuant to Decree IET/350/2014, four companies are to contribute 96.64131% of the costs of the regulated discount: Endesa, SA (‘Endesa’) (41.612696%), Iberdrola, SA (‘Iberdrola’) (38.474516%), Gas Natural SDG, SA (14.185142%) and E.ON España, SLU (which later became Viesgo Infraestructuras Energéticas, SL (‘Viesgo’)) (2.368956%). By contrast, in accordance with that decree, 23 other companies are allocated significantly reduced coefficients, all below 1%. Those amounts are calculated annually by the National Commission on Markets and Competition and have to be paid into a deposit account specifically designated for that purpose. The National Commission on Markets and Competition is also responsible for settling the payments concerned with the relevant undertakings and remitting to them an amount corresponding to the regulated discount granted by the relevant supplier of last resort to vulnerable consumers.
17. On 18 December 2014, E.ON España, SLU (which later became Viesgo) brought administrative law proceedings before the referring court challenging Royal Decree‑Law 968/2014. It argued that the arrangements for financing the regulated discount, laid down in Article 45(4) of Law 24/2013, as implemented by Articles 2 and 3 of Royal Decree‑Law 968/2014, were incompatible with Directive 2009/72.
18. By judgment of 24 October 2016, the Supreme Court upheld the action. It annulled Articles 2 and 3 of Royal Decree-Law 968/2014 on the ground that they were incompatible with Article 3(2) of Directive 2009/72. That court explains that it reached its conclusion on the basis of the Court’s judgments in Federutility and Others (8) and in ANODE. (9)
19. The Spanish State Administration brought an appeal for the protection of constitutional rights (‘recurso de amparo’) before the Constitutional Court. By judgment of 26 March 2019, the Constitutional Court upheld the State Administration’s constitutional complaint. It found that the Supreme Court had infringed the right to a ‘trial with all the safeguards’, within the meaning of Article 24(2) of the Spanish Constitution, in so far as it declared domestic law incompatible with EU law without first making a request for a preliminary ruling to the Court.
20. According to the order for reference, the Constitutional Court considered, in particular, that the case-law relied on by the referring court to establish incompatibility with Directive 2009/72 did not constitute ‘acte clair’ in relation to the dispute before it. For those reasons, the Supreme Court was not exempt from the obligation to make a reference, with the effect that the judgment under appeal should be overturned and the situation should revert to that which existed prior to delivery of the judgment.
21. It is within this factual and legal context that the Supreme Court decided to stay the proceedings and refer the following questions to the Court of Justice for a preliminary ruling:
‘(1) In accordance with the case-law established by the Court of Justice, in its judgments of 20 April 2010 (Case C‑265/08, Federutility) and of 7 September 2016 (Case C‑121/15, ANODE) amongst others, is national legislation – such as that established in Article 45(4) of [Law 24/2013] and subsequently implemented by Articles 2 and 3 of [Royal Decree‑Law 968/2014] – under which the financing of the [“social discount”] [regulated discount for electricity for certain vulnerable consumers; “the regulated discount”] falls on certain actors in the electricity system, namely the parent companies of company groups or, where applicable, companies that simultaneously carry on electricity production, distribution and retail activities, compatible with the requirements laid down in Article 3(2) of Directive [2009/72], where some of those actors carry very little weight in the sector as a whole, and where, by contrast, other entities or company groups that may be in a better position to bear that cost, either due to their turnover, relative size in a business sector or because they carry on two of those activities simultaneously on an integrated basis, are exempted from that burden?
(2) Is national legislation according to which the obligation to finance the regulated discount is not established on an exceptional basis or limited in time, but indefinitely and with no refund or compensatory measure whatsoever, compatible with the requirement of proportionality established in Article 3(2) of Directive [2009/72]?’
22. Written observations have been submitted by Agri-Energía and Others (‘Agri-Energía’), EDP España, Endesa, Iberdrola, Naturgy Energy Group (‘Naturgy’), Viesgo, the Spanish Government and the European Commission. Those parties also replied to written questions put to them by the Court.
IV. Analysis
23. This Opinion is structured as follows. I shall start with issues of admissibility raised by the interested parties (A). I will then begin my substantive analysis by first discussing what precisely has been designated a ‘public service obligation’ (B.1). Thereafter, I shall consider whether that ‘public service obligation’ falls within the scope of Article 3(2) of Directive 2009/72 and whether it may be considered to be compatible with the conditions of that provision (B.2). Finally, I shall turn to the second question submitted by the referring court concerning the proportionality of the ‘public service obligation’ and whether there is any duty to compensate the bearer of the public service obligation (B.3).
A. Admissibility
24. Viesgo, Iberdrola, and Endesa put forward two lines of argument relating to admissibility.
25. First, they argue that the referring court, as the highest judicial authority competent to decide whether a request for a preliminary ruling was necessary in order to rule on the compatibility of Royal Decree-Law 968/2014 with Article 3(2) of Directive 2009/72, considered that the doctrine of ‘acte clair’ absolved it from the duty to refer. Since that court alone must guarantee the effectiveness of EU law, the Constitutional Court has no authority to review that decision or substitute itself for the referring court in order to assess the existence of ‘acte clair’.
26. Second, the case-law of the Constitutional Court, pursuant to which any Spanish court is obliged to make a reference whenever national legislation is deemed incompatible with EU law, (10) deprives the courts of last instance of the power to assess whether a reference is necessary. The referring court and the parties explain that that case-law is outcome-dependent, in that a similar obligation would not arise if the national court were to find a national law compatible with EU law.
27. Consequently, given that the reasons on the basis of which a request for a preliminary ruling was made in the present case derive from national procedure and case-law which undermines the primacy and effectiveness of EU law, the Court should declare that it has no jurisdiction to rule on the questions referred. Alternatively, it should dismiss the request as inadmissible.
28. In my view, the present case is neither inadmissible nor falls outside the jurisdiction of the Court.
29. First, questions on the interpretation of EU law referred by a national court generally enjoy a presumption of relevance. (11) The referring court alone is responsible for defining the factual and legislative context pursuant to which it seeks guidance from the Court. (12) The same is true even in cases where the discretion of the national court as to whether to make a request for a preliminary ruling is limited in one way or another under national law. Even in such situations, it remains the prerogative of the referring court to formulate the questions to be asked, to set out national law and procedure, and to define effectively the scope of the case that is brought before this Court. Moreover, the referring court also retains the responsibility for the subsequent judicial decision. Consequently, where the questions submitted concern the interpretation of EU law, the Court is, in principle, bound to give a ruling. (13)
30. Second, in the present case, the subject matter relates clearly to a dispute which is in fact pending before the referring court. That court explains that the request for a preliminary ruling is necessary in order to resolve the dispute. It points out that there is disagreement between itself and a higher jurisdiction as to the existence of ‘acte clair’ with regard to the requirement of non-discrimination contained in Article 3(2) of Directive 2009/72. Unlike, for instance, contrived cases, the answer to the questions put before the Court is thus indeed necessary in order for the referring court to resolve its case. (14)
31. Third, even if the case-law on which the referring court relies for its interpretation does in fact constitute ‘acte clair’ (which is far from obvious since the referring court and the Constitutional Court disagree on the applicability of that case-law), the fact remains that a hypothetical finding of ‘acte clair’ for the purposes of the exemption from the duty to refer, within the meaning of CILFIT, (15) does not affect the admissibility of the question(s) referred. Admittedly, a finding of ‘acte clair’ may render a case ‘unnecessary’ within the meaning of Article 267 TFEU. However, such a case is nonetheless clearly admissible if referred to this Court. At most, the Court may deal with a case thus referred by a reasoned order pursuant to Article 99 of the Rules of Procedure of the Court of Justice.
32. In short, the present case is admissible. Moreover, the subject matter of the case is clearly within the jurisdiction of the Court under Article 267 TFEU.
33. That being clarified, I would nonetheless agree that if the duty to refer, stemming from, and autonomously defined by, EU law, were to be ‘adapted’ or rather asymmetrically ‘truncated’ in the manner suggested by the referring court and further elucidated by the parties, that could pose an issue under EU law, but not necessarily one of admissibility. However, since the referring court has not formulated any questions on that issue, I simply conclude with the following general points.
34. First, the fact that a higher national court or constitutional court chooses to penalise the breach of the duty to submit a request for a preliminary ruling laid down in the third paragraph of Article 267 TFEU is certainly not precluded by EU law. In fact, a number of national systems, especially those with individual review of constitutionality of decisions handed down by national courts of last instance, (16) do control the fulfilment of the obligation to make a reference on the part of national courts of last instance. (17)
35. Second, such involvement of a higher or constitutional court may naturally and inevitably have the effect of depriving the courts, whose decision is subject to review, of (part of) their discretion. Such an effect is nonetheless inherent in any form of review of specific decisions. It is true that the Court has stated that any constitutional, legislative, administrative, or judicial practice, including those relating to appeals formulated against orders dismissing the need for a reference, cannot deprive a court of the possibility to submit a request for a preliminary ruling. (18) The Court has even stated that a lower court is entitled to disregard the legal opinion of a higher court if it considers that opinion to be incompatible with EU law. (19)
36. However, the reasoning underpinning that case-law is to prevent higher courts from barring lower courts within their own judicial system from having direct access to the Court through the preliminary rulings procedure, which would clearly be contrary to (the second paragraph of) Article 267 TFEU. (20) In my view, that line of case-law was never meant to bestow on national courts a general and blunt ‘licence to disregard’, more reminiscent of a poor James Bond movie tagline than a rationally organised judicial system. Rather, that case-law puts in place a (limited and discrete) ‘licence to disagree’ or even a ‘licence to deviate’ in specific cases where that decision is duly reasoned and substantiated. The golden rule is thus reasoned engagement with the supposedly incompatible decision. (21)
37. Third, any national obligation to make a reference must nonetheless respect the nature and the scope of Article 267 TFEU itself, as defined by the case-law of the Court. (22)Of course, national law may ‘flesh out’ in specific terms procedurally what EU law states more generally. However, the bottom line is that, where a Member State decides to establish enforcement criteria to ensure the correct application of the duty to refer, it cannot (unilaterally) change the scope of the obligation under Article 267 TFEU itself because, otherwise, the requirements of uniformity and legal certainty, also inherent in that provision, would be undermined. (23)
38. Fourth, whatever reservations one might have about the feasibility of the CILFIT criteria, in particular those relating to the existence of any reasonable doubt as to the correct interpretation of EU law in the case before the national court, (24) it is abundantly clear that those criteria relate to any matter of interpretation of EU law. Those criteria are thus ‘question-dependent’ or ‘subject matter dependent’, but entirely ‘outcome-blind’. Indeed, ‘acte clair’ does not become any clearer depending on whether its outcome is a declaration of incompatibility or compatibility on the part of the national court. The consequence of the assessment is entirely irrelevant to whether there is ‘acte clair’ or not.
39. Moreover, the EU judicial structure clearly and consistently empowers national courts to make a decision on the (in)compatibility of national law with EU law of their own motion. (25) That is part of the EU law mandate bestowed on all courts or tribunals in the Member States. If those courts consider that they need no assistance from the Court on a given EU law matter under the second paragraph of Article 267 TFEU, or if they are of the view that they are under no such obligation under the third paragraph of Article 267 TFEU, then they do not need to turn to the Court with a request for a preliminary ruling. To suggest otherwise is likely not only to contradict the autonomous content of the scope of the duty to refer under EU law, but also to disable the exercise of the independent mandate of national courts in applying and enforcing EU law at national level. (26)
40. Fifth and finally, if the higher national court or constitutional court seised of an extraordinary remedy starts reviewing whether or not the given court of last instance has correctly applied the CILFIT ‘acte clair’ exception, it is rather likely that that review court will itself be interpreting EU law. (27) However, in that moment, that review court becomes a ‘court or tribunal’ within the meaning of Article 267 TFEU. Moreover, since that review court will, by definition, be a court under the third paragraph of Article 267 TFEU, (28) it will inherit all the obligations and responsibilities flowing from that position, including, where appropriate, the obligation to refer a question for a preliminary ruling itself.
B. Substance
1. What precisely is the‘public service obligation’ at issue?
41. From the explanations provided in the court file, I understand that the system put in place by the Spanish legislature functions as follows: the suppliers of last resort apply directly a fixed discount to the electricity bill of certain vulnerable consumers. That is the ‘regulated discount’. The costs of that system are then borne by a number of companies active on the electricity market in Spain (including the parent companies of the suppliers of last resort). That is the ‘mandatory contribution’.
42. Although there appear to have been disagreement on the matter in the initial submissions, in response to a written question put by the Court, all parties take the position that there is only one ‘public service obligation’. That obligation, laid down in Article 45(4) of Law 24/2013, consists of two constituent elements: (i) the regulated discount and (ii) the mandatory contribution. In other words, the ‘public service obligation’ at issue is a ‘bundle’ composed of two elements.
43. One can look at that ‘bundle’ in two ways. Either one accepts the legislature’s designation as it is (even where that implies multiple ‘public service obligations’ in one), or one divides the designated ‘bundle’ into its constituent elements and performs separate compatibility assessments. Whichever way the issue is approached, there needs to be a certain control so that the designated ‘public service obligation’ is not composed of multiple independent measures which only tangentially relate to the same issue.
44. That is not only to control the Member States’ discretion. Indeed, it hardly needs to be pointed out that there are some limits to what might be ‘designated’ by a Member State as falling under the autonomous concept of a ‘public service obligation’, as set out in EU law. Moreover, there is also a very practical reason: as will be demonstrated further in this Opinion, it becomes somewhat logically difficult to assess the compatibility of a ‘bundle’ of multiple and diverse elements in one ‘public service obligation’ with the requirements of Article 3(2) of Directive 2009/72. Which part of the ‘constituent whole’ should be assessed against the yardstick of proportionality? Which part should be subject to regular review by the national authorities? For which part should there be compensation, if at all?
45. The difficulty in answering those questions may also be a reason why ‘bundled’ ‘public service obligations’ have so far appeared only once in the case-law of the Court. In Оvergas Mrezhi and Balgarska gazova asotsiatsia, the case before the Court involved certain natural gas storage obligations in the interest of ensuring the security and regularity of gas supply in Bulgaria, the cost of which was passed on to consumers by fixing the price of that gas pursuant to a methodology set by the government. (29) By contrast, the ‘traditional’ case-law of the Court on the much more common ‘simple’ ‘public service obligation’ has included specific local public transport services in the province of Naples; (30) certain maritime transport services between the islands of Malta and Gozo; (31) some passenger transport services by bus, electric vehicle and mechanical lifts in the city of Lisbon; (32) as well as electricity dispatching services in Italy. (33)
46. In the present case, it appears that the Court is faced with a ‘public service obligation’ composed of two elements which, functionally, may relate to the same issue, but whose aims and means are entirely different.
47. On the one hand, there is the regulated discount, the objective of which is to assist certain vulnerable consumers in Spain with their electricity bill. This is achieved by means of a discount of either 25% or 40% on the market price of electricity. A proportionality assessment of that element could assess whether the group of vulnerable consumers is sufficiently representative and/or whether the discount provided is insufficient to achieve the aim pursued.
48. On the other hand, there is the mandatory contribution, the purpose of which is to finance the system of the regulated discount. This is achieved by means of a financing obligation imposed on certain vertically integrated companies active on the Spanish electricity market. Here, a proportionality analysis could assess the representativeness of the group of companies subject to that financing obligation and/or the amount each company must provide.
49. However, it is very clear that the regulated discount and the mandatory contribution concern different actors, different interests, and different obligations. Those two elements are functionally connected because they are both elements of a larger scheme. However, they can hardly be discussed in the same breath as being one measure, particularly in the context of (or the absence of) discrimination and proportionality.
50. Having full knowledge of national law and the factual background to the present case, the referring court appears to share the collective conclusion of the parties that the wording of Article 45(4) of Law 24/2013 indicates that the entire scheme was classified as a ‘public service obligation’ and that both the regulated discount and the mandatory contribution, are constituent elements thereof. (34) However, at the same time, that court raises its questions solely in relation to the compatibility of the mandatory contribution with Article 3(2) of Directive 2009/72. In other words, despite the apparent existence of a single ‘public service obligation’ (composed of two elements), the referring court appears to accept a certain severability of the mandatory contribution from the ‘public service obligation’ as a whole.
51. In summary, I remain puzzled as to what is required of this Court. However, in the analysis that follows, I shall defer to the starting point as defined by the referring court and treat the mandatory contribution as a self-standing (or severed) element of an overall ‘bundle’ of ‘public service obligations’. That being said, as I will explain throughout this Opinion, that approach will inevitably give rise to additional issues as one analyses the various elements of what is required of a true ‘public service obligation’ under Article 3(2) of Directive 2009/72.
2. Question 1
52. By its first question, the referring court asks, in essence, whether the mandatory contribution, as established by Law 24/2013 and implemented by Royal Decree-Law 968/2014, is compatible with Article 3(2) of Directive 2009/72.
53. In view of the fact that that provision concerns ‘public service obligations’, I will first consider whether the mandatory contribution satisfies the criteria thereof (a). Only if that is established shall I turn to the compatibility of that measure with Article 3(2) of Directive 2009/72 (b).
(a) Does the mandatory contributionfall within the scope of Article 3(2) of Directive 2009/72?
54. The Spanish Government observes that, in the light of the judgment of the Court in Engie Cartagena, (35) the question arises as to whether the mandatory contribution can indeed amount to a ‘public service obligation’ within the meaning of Article 3(2) of Directive 2009/72/EC.
55. With the exception of the Spanish Government, all the interested parties take the view that the judgment in Engie Cartagena (36) does not affect the nature of the mandatory contribution as a ‘public service obligation’. Those parties, in effect, argue that, in contrast to the measure at issue in Engie Cartagena, the ‘public service obligation’ imposed in the present case is not a general measure but rather one that is specifically designated under Article 3(2) of Directive 2009/72. Moreover, the ‘public service obligation’ to apply the regulated discount directly to the electricity bill of eligible consumers is intrinsically linked to the mandatory contribution, the two of them being ‘inseparable facets of a single measure’, since it is through the latter that the former is financed.
56. Given the heavy reliance by the parties on the judgment in Engie Cartagena, (37) I will briefly set out the details of that case (i). Thereafter, I shall reflect on the considerations that arise from that case and their possible impact on the present case, considering, in particular, whether or not the mandatory contribution could be labelled as a parafiscal duty (ii), before concluding that, even if it were considered to be a tax, that would not mean that it would fall completely outside the scope of Directive 2009/72, in particular its Article 3(1) (iii).
(i) Engie Cartagena and the nature of ‘public service obligations’
57. Engie Cartagena was a company active on the electricity market in Spain. It brought an action seeking annulment of an order requiring it to finance certain amounts determined on the basis of Real Decreto‑ley 14/2010 de 23 de diciembre, por el que se establecen medidas urgentes para la corrección del déficit tarifario del sector eléctrico (Royal Decree‑Law 14/2010 of 23 December 2014 establishing urgent measures to correct the tariff deficit in the electricity sector) (‘Royal Decree‑Law 14/2010’). Engie Cartagena was one of 11 undertakings obliged to do so with a view to reducing the tariff deficit in the electricity sector in Spain, which resulted from the launch of a national energy efficiency action plan. (38) The same decree-law classified that financing as a ‘public service obligation’. As such, the question before the Court was, inter alia, whether said financing constituted a ‘public service obligation’ for the purposes of Article 3(2) of Directives 2003/54 and 2009/72. (39)
58. The Court’s reply was in the negative. First, it noted that that concept required an autonomous EU law interpretation. (40) Next, it examined conditions of Article 3(2) of Directive 2009/72, that is to say the existence of a ‘public service obligation’ and its compatibility with Article 106 TFEU. (41) It explained that, since the former authorises a derogation from competition rules, the concept of ‘public service obligation’ must be understood as constituting intervention in the functioning of the market in order to achieve an objective of general interest. That would oblige undertakings operating in the electricity sector to act on the market in a certain way and on the basis of criteria imposed by the public authorities. (42) Such an interpretation would be supported by the definitions of that concept, as it appears in other acts of EU law, and in particular those falling within the competences provided for in Article 4 TFEU. (43)
59. The Court concluded that the freedom of those undertakings to act on that market would thus be limited in that, solely having regard to their own commercial interest, they would not have supplied certain goods or services, or would not have supplied them to the same extent or under the same conditions. (44) However, the sums payable by the undertakings concerned did not impose any requirement on them which would restrict their freedom to act on the electricity market. They merely had to contribute funds to reduce the tariff deficit of the Spanish authorities. Therefore, such a contribution could not come within the concept of ‘public service obligations’ for the purposes of Article 3(2) of Directive 2009/72. (45)
60. The judgment in Engie Cartagena thus demonstrated and affirmed the spirit of the concept of ‘public service obligations’, as inter alia reflected in the list contained in Article 3(2) of Directive 2009/72. The examples in that list correspond to certain public measures, which interfere with the free functioning of a market by requiring selected undertakings active on that market to provide certain goods or services, or to refrain from acting in a manner which deviates from ‘normal’ business behaviour on an otherwise competitive market. (46)
61. However, the common denominator of that list is clear: the examples given concern various types of performance, deviating, in one way or another, in the common interest, from normal economic behaviour. The types of measure envisaged do not concern primarily monetary measures, whereby the State Treasury would simply ask for money for the ‘public purse’. Therefore, funding or other payment obligations would thus fall outside the scope of that concept. (47)
(ii) A public service obligation or a parafiscal tax?
62. Against the background of the judgment in Engie Cartagena, the Spanish Government is right to express doubts as to the nature of the mandatory contribution.
63. As explained by the referring court and the parties, the mandatory contribution takes the form of a financial obligation, imposed by Article 45(4) of Law 24/2013 and implemented through Articles 2 and 3 of Royal Decree‑Law 968/2014. In this manner, the Spanish legislature seeks to cover the costs arising from the regulated discount, without it being borne by the consumers or the electricity system as a whole. That financial obligation is personalised by means of an annual order, setting out the companies concerned and the percentage of the overall revenue required. The payment of those sums is not linked to any performance obligation. They do not have to supply certain goods or services which they would not have supplied, or which they would not have supplied to the same extent or under the same conditions, if they were considering only their own commercial interest. Indeed, from the perspective of assessing the ‘freedom to act on the electricity market’, the activities of the undertakings concerned are not affected at all. Their business operations are affected as much as they would be for any other tax or fiscal payment.
64. Based on that information, it appears possible to argue that the mandatory contribution merely finances, but does not itself constitute, public intervention in the functioning of the Spanish electricity market in order to achieve a recognised ‘public service obligation’, within the meaning of Article 3(2) of Directive 2009/72. As such, it could be distinguished from the obligation at issue in Оvergas Mrezhi and Balgarska gazova asotsiatsia, – the only other ‘bundle’ of ‘public service obligations’ featured thus far in the case-law of the Court – since, in that case, the Bulgarian Government appears to have actually limited the freedom of operators on the Bulgarian gas market by fixing the price of gas that could be charged to consumers. (48)
65. Following the approach of the Court in Engie Cartagena, and subject to verification, it could indeed be argued that the mandatory contribution imposed by the Spanish legislature in Article 45(4) of Law 24/2013, and implemented by means of Articles 2 and 3 of Royal Decree‑Law 968/2014, would not satisfy the conditions for a ‘public service obligation’ within the meaning of Article 3(2) of Directive 2009/72.
66. If that is the case, however, what then is the precise nature of the mandatory contribution?
67. The parties have described the mandatory contribution to the Court as amounting to a financial obligation, imposed by the State on a certain number of companies, to pay a certain amount of money that is used to finance a particular service required by the State.
68. In my view, much like the Shakespearian reference ‘a rose by any other name would smell as sweet’, that description is akin to a parafiscal tax. In the present case, that determination gains in importance because Directive 2009/72 does not constitute a measure of EU law designed to bring about the approximation of the Member States’ fiscal provisions. In fact, the legal basis pursuant to which that directive was passed, Article 95(1) EC (now Article 114 TFEU), in its second subparagraph, specifically explains that it does not apply to taxes. (49)
69. In reply to a written question put to the parties, EDP España, Iberdrola and the Commission observe that the nature of the mandatory obligation is not such as to amount to a tax. They observe that the funds collected by means of that measure become part of the Spanish State’s revenue. From that perspective, the mandatory contribution is more akin to a regulatory measure than to a tax, and thus falls clearly within the scope of Directive 2009/72.
70. I am not convinced by those explanations.
71. For the purposes of EU law, the determination of the nature of a tax is an autonomous assessment carried out by the Court according to the objective characteristics by which it is levied and is irrespective of its classification under national law. (50)
72. Granted, similar to what appeared to be the case in Engie Cartagena, the information contained in the request for a preliminary ruling does not enable the Court to determine (with certainty) whether that mandatory contribution is of such a nature. (51) However, from the limited information in the court file, it appears that the mandatory contribution does satisfy the main characteristics of a tax.
73. First, it is apparent from the order for reference that the methodology for apportioning costs arising from the regulated discount is laid down in Spanish law, in particular Royal Decree‑Law 9/2013. That order for reference also explains that successive ministerial orders (Order No IET/350 of 7 March 2014 and Order No IET/1451 of 8 September 2016), issued pursuant to Decree-Law 9/2013 and Decree-Law 968/2014, apportion the precise costs among the undertakings concerned.
74. Second, it appears that the undertakings identified pursuant to those decrees are characterised as (collective) payers of the mandatory contribution. It also appears that that amount cannot be passed on to another person. (52) In addition, it would seem that payment of that amount is mandatory by law, since the National Commission on Markets and Competition is charged with settling those contributions. That also implies, in my view, that the companies concerned would be pursued by that authority or potentially other Member State bodies for non-payment of their contribution. (53)
75. Third, it is clear from the order for reference that the mandatory contribution is intended to finance the costs arising from the regulated discount. (54) Thus, by its structure, the mandatory contribution is a measure introduced in the general interest, in accordance with the allocation criteria laid down by Law 24/2013, as implemented by Royal Decree‑Law 9/2013. It seeks to raise funds in order to close the ‘tariff deficit’ arising from the policy decision to offer lower electricity prices to vulnerable consumers in Spain. Contrary to the arguments of Agri-Energía, EDP España, Viesgo and the Commission in their reply to a written question put to them by the Court, the fact that that contribution is not intended for the general national budget, but is instead earmarked for a specific purpose, plays no role in that assessment. (55)
(iii) The baseline of Article 3(1) of Directive 2009/72: a competitive market that does not discriminate between undertakings
76. If the referring court were to confirm the above, would that mean that the mandatory contribution falls outside the scope of Directive 2009/72, as the Spanish Government argues? (56)
77. I do not consider that to be the case.
78. The reason for the fiscal nature of a measure, and the related hesitation to interfere with the internal taxation of the Member States, do not mean that a review of the effects of those measures, against EU law, cannot take place. That is particularly so, as Agri-Energía, EDP España, Endesa, Iberdrola, Naturgy and Viesgo point out, where the method of financing a ‘public service obligation’ may have an impact on the functioning of the internal market for electricity. (57)
79. In the present case, the Spanish legislature intervenes in the electricity market in Spain by shifting the cost of the regulated discount onto only a handful of undertakings active thereon. Such an arrangement is not in itself precluded, (58) particularly since Directive 2009/72, in its current form, does not seek to achieve full harmonisation of the market for electricity in the European Union.
80. However, despite the lack of full harmonisation, as EDP España, Endesa, Iberdrola and Naturgy observe, in essence, in reply to a written question put by the Court, that does not absolve the mandatory contribution from itself complying with the ‘common rules’ of Directive 2009/72, and in particular Article 3(1) thereof. That provision requires Member States to ensure, on the basis of their institutional organisation and with due regard to the principle of subsidiarity, that electricity undertakings are managed in accordance with the aim, inter alia, of achieving a competitive market in electricity and in a way that there is no discrimination between undertakings. (59)
81. For the reasons set out above, relying in particular on the Court’s directions in its judgment in Engie Cartagena, it might still be open to debate whether the mandatory contribution satisfies the conditions of a ‘public service obligation’ within the meaning of Article 3(2) of Directive 2009/72. In fact, I believe there are indications that the mandatory contribution may be a parafiscal tax for the purposes of EU law.
82. However, if the national court were to reach that conclusion, that does not mean that such a tax would entirely escape the scope of Directive 2009/72, as suggested, in essence, by the Spanish Government. The examination would simply shift from Article 3(2) to Article 3(1) of that directive. Moreover, while the specific criteria for the assessment under each of these provisions are different, the baseline for both is the same, tied to Article 3(1) of the directive: generally, there shall be no distortion of competition on the electricity market by the Member States. Should interferences be necessary, they must be kept to a minimum (and therefore proportionate) and adopted on a non-discriminatory basis, maintaining the maximum possible equality in terms of rights and obligations for all undertakings on the market.
83. In conclusion, I do not mean to suggest that the regulated discount, viewed in isolation, cannot satisfy the conditions of Article 3(2) of Directive 2009/72, or even that it amounts to a tax. That question has not been put to the Court, and does not appear to be contested by the parties. The point is rather that the mere fact that the final destination of the revenue from a (mandatory) financial contribution may assist in the pursuit of a ‘real’ ‘public service obligation’ is not sufficient to make that contribution itself relevant to the achievement of that objective (and thus compliant with Article 3(2) of Directive 2009/72). (60)
84. The contrary would entirely distort the concept of ‘public service obligations’ by presupposing that the mere allocation of funds derived from any financial contribution could determine its nature and treatment under EU law. (61) That, in turn, would also allow the financing of a ‘public service obligation’ to become a ‘public service obligation’ in its own right, as opposed to a mere mechanism to accumulate the necessary funds to compensate the providers of the actual ‘public service obligation’ for their activity. (62)
(b) Compatibility withArticle 3(2) of Directive 2009/72
85. Should the mandatory contribution be deemed to fall within the scope of Article 3(2) of Directive 2009/72, a compatibility assessment of that contribution becomes necessary.
86. Article 3(2) of Directive 2009/72 requires that measures adopted as ‘public service obligations’ be ‘clearly defined, transparent, non-discriminatory, verifiable and shall guarantee equality of access for electricity undertakings of the [Union] to national consumers’. (63)
87. At the outset, I must once again refer to the issues I raised in points 42 to 50 of this Opinion. My tentative assessment will naturally be carried out under the assumption that the mandatory contribution is capable of forming part of a larger ‘public service obligation’ but can still be severable for any assessment against the conditions of Article 3(2) of Directive 2009/72, despite the fact that that directive appears to be drafted with a view to assessing single ‘public service obligations’ and not bundled or severed parts of ‘public service obligations’.
88. Having clarified that assumption, I note that all parties, with the exception of the Spanish Government, claim that the mandatory contribution, in its current form, is discriminatory. Those parties point to the wording of Article 45(4) of Law 24/2013, which states that the financing of the regulated discount is assumed by those vertically integrated companies which simultaneously produce, distribute, and sell electricity (‘qualifying characteristics’). Despite not identifying any companies by name, that provision establishes clear and identifiable characteristics of certain entities active in the electricity market in Spain. At the same time, it excludes from the mandatory contribution those vertically integrated companies which satisfy two or less of the qualifying characteristics in the electricity sector in Spain. In practice, Article 45(4) of Law 24/2013 thus places the burden of financing the regulated discount almost exclusively on four groups of undertakings active on the Spanish electricity market. That treatment renders it discriminatory.
89. For its part, the Spanish Government submits that the measure is not discriminatory and, in any event, is objectively justified. The recitals of Royal Decree‑Law 9/2013 state that the companies that meet the qualifying characteristics are in a ‘unique position’ to better cover the cost of the regulated discount, since they are able to shoulder the burden as part of their main business activities in the electricity market.
90. It should be recalled that the objective of the condition of non-discrimination, as laid down in Article 3(2) of Directive 2009/72, is that the ‘public service obligation’ at issue binds all of the undertakings operating in the same sector equally so as not to adversely affect competition in that sector. (64) The obligations arising from Article 3(2) of Directive 2009/72 must thus be imposed generally, and not on certain undertakings specifically. (65) Although Article 3(2) of Directive 2009/72 lays down no provision for the possibility to provide objective justification for discriminatory treatment, the requirement flowing therefrom is a specific expression of the general principle of equality. (66) Thus, in practical terms, it is of limited relevance whether the same types of considerations are raised at the level of the assessment of comparability or ‘downstream’ at the level of justifications. (67) The bottom line is that any such objective justification must relate to, and be appropriate for, securing the objective of general economic interest, which the legislation in question pursues, (68) and be proportionate to that aim. (69)
91. In the light of those conditions, I consider that the following problems could arise in connection with the mandatory contribution.
92. First, it appears true that the mandatory contribution, in the manner that it is imposed, is capable of hindering competition on the Spanish market for electricity by creating inequality among the undertakings active in that sector. (70) That inequality follows from the imposition of the mandatory contribution solely on those companies which satisfy the qualifying characteristics, while, at the same time, excluding from that obligation other companies operating on the same market, namely, those vertically integrated companies which carry out two or less of the qualifying characteristics (that is to say, direct competitors). (71)
93. Second, the objective justifying (and leading to) that inequality in treatment appears unsatisfactory. Indeed, even if the objective of the mandatory contribution (as opposed to the regulated discount) were that of offering subsidised tariffs of electricity to vulnerable groups of consumers – something which has not been claimed in the present case – the difference in treatment would still not be justified. As all parties, with the exception of the Spanish Government observe, the ‘qualifying characteristics’ for the mandatory contribution bear no relation to the objective of offering the regulated discount to vulnerable groups of consumers with particular social, consumption, and purchasing power characteristics. Indeed, that objective is not at all affected by the type or number of undertakings which cover the costs arising from that system. In fact, vulnerable consumer groups remain eligible for that system irrespective of who contributes to covering of the costs arising from that system.
94. Third, even if one were to suppose that the objective of the mandatory contribution was not that of offering subsidised electricity prices, but was instead somehow aligned with a redistributive policy vision whereby ‘richer’ companies are, it would appear, asked to contribute more than ‘poorer’ companies, I would still question whether that objective is, in fact, satisfied. That would especially be the case where the qualifying characteristics and their explanation lead to a difference in treatment on the basis of their potential financial capacity. Indeed, the referring court explains that some of the undertakings required to pay the mandatory contribution carry little weight in the sector as a whole, whilst, at the same time, there are other undertakings which appear more able to bear the costs of the regulated discount (either because they hold a larger share of the electricity market, benefit from a higher turnover, or carry out one or two of the activities used to determine the contributing entities). That detachment from the economic reality of the market also appears to have been understood by the Spanish State Administration which, as the referring court explains during the main proceedings, accepted that synergy and economies of scale may also exist for companies not satisfying the qualifying characteristics.
95. In summary, there is a clear issue of discrimination between the undertakings for which no reasonable justification appears to exist. Only a handful of companies active on the market are asked to pay the final bill, on the basis of criteria that do not relate directly to the general economic interest as stated. In this manner, those companies not only pay for the social policy of a Member State, but also indirectly sponsor their direct competitors active on the very same market.
96. All these issues have apparently already been considered by the referring court, culminating in a declaration of incompatibility of the national rules with Article 3(2) of Directive 2009/72. As outlined earlier in this section, there could indeed be a discussion about the exact classification of the mandatory contribution, particularly if, as done by the referring court in its questions, that contribution were effectively ‘severed’ from the regulated discount. However, that taxonomic dispute aside, it is also clear that the logic and the bottom line of both subparagraphs (1) and (2) of Article 3 of Directive 2009/72 are essentially similar. Thus, pragmatically speaking, the assessment of a national measure is likely to turn out the same under either provision, with the reasons set out by the referring court rendering it incompatible if approached under either of the two headings.
97. Consequently, I consider it best to defer the issue of classification of the mandatory contribution to the referring court, with that court maintaining full knowledge of the national law and facts of which I may be unaware. With regard to the specific question raised by that court, which indeed relates to a ‘public service obligation’ within the meaning of Article 3(2) of Directive 2009/72, I would suggest that the Court reply to the first question as follows:
Article 3(2) of Directive 2009/72 must be interpreted as precluding a national law that imposes, without objective justification which clearly flows from the nature of the general economic interest pursued, a mandatory financial contribution solely on certain electricity undertakings performing production, distribution, and retail activities for the purposes of financing a system, which applies regulated discounts on the price of electricity directly to the electricity bill of eligible consumers.
3. Question 2
98. By its second question, the referring court seeks essentially to know whether the mandatory contribution is compatible with the requirement of proportionality, as laid down in Article 3(2) of Directive 2009/72, in that it is not limited in time and does not provide compensation to the contributing undertakings.
99. In the light of the answer proposed to the first question, this question need not be answered.
100. However, to the extent that the substance underlying that question may nonetheless be of use to the referring court, I shall discuss whether, in general, Article 3(2) of Directive 2009/72 allows for the existence of a ‘public service obligation’ without a time limit or compensation structure. That assessment must of course take place subject to the same proviso I set out in points 42 to 50 and 87 of this Opinion. In accordance with that proviso, I propose that the second question referred to the Court be assessed by first discussing the proportionality of the measure (a), before considering the need to compensate the suppliers of last resort for performing a ‘public service obligation’ (b).
(a) Compliance with the principle of proportionality
101. Article 3(2) of Directive 2009/72 does not directly mention, in its wording, the requirement of proportionality that is attached to any ‘public service obligations’ imposed pursuant to that provision.
102. That article nonetheless requires that ‘full regard’ be had, in particular, to Article 86 EC Treaty (now Article 106 TFEU). (72) In addition to Article 14 TFEU, Protocol (No 26) on services of general interest, and Article 36 of the Charter of Fundamental Rights of the European Union (‘the Charter’), that provision concerns the compliance of ‘services of general economic interest’ with the Treaty. (73) In other words, Article 106(2) TFEU is aimed at reconciling the Member States’ interest in using certain undertakings as an instrument of economic or social policy with the European Union’s interest in ensuring compliance with the rules on competition and preserving the unity of the internal market. (74)
103. It is through this cross-reference to the wording of Article 106 TFEU that any interference with the rules on competition and the unity of the internal market may occur ‘only in so far as is necessary to achieve the objective of general economic interest which they pursue and, consequently, for a period that is necessarily limited in time’. (75)
104. Thus, any interference with the conditions of competition on the electricity market in a Member State, and thereby the unity of the internal market in electricity, even if arising pursuant to a ‘public service obligation’, within the meaning of Article 3(2) of Directive 2009/72, must respect the principle of proportionality. (76)
105. The principle of proportionality has been interpreted in similar contexts, in relation to other directives seeking to establish common rules for the internal market, to require a clear connection between (i) the achievement of the objective pursued by the Member State concerned, (ii) the element of time, and (iii) the ‘ratione personae’ of the measure in question. (77)
106. The referring court points to the second of those requirements and questions whether a valid invoking of a ‘public service obligation’, within the meaning of Article 3(2) of Directive 2009/72, should not be limited in time.
107. It is recalled that the concept of ‘public service obligation’, within the meaning of Article 3(2) of Directive 2009/72, corresponds to public intervention measures on the functioning of the electricity market. (78) That intervention necessarily restricts the freedom of certain undertakings to act on the electricity market. (79) In turn, such a restriction has an impact on the general objective of Directive 2009/72, which is to pursue the achievement of an internal market in electricity that is entirely and effectively open and competitive, in which all consumers may freely choose their suppliers, and in which all suppliers may freely supply their products to their customers. (80)
108. That is where the relationship with Article 106 TFEU comes into play. As interpreted in Federutility, that provision requires that any intervention with the forces of supply and demand ‘must be limited in duration to what is strictly necessary in order to achieve its objective, in order, in particular, not to render permanent a measure which, by its very nature, constitutes an obstacle to the realisation of an operational internal market’ in electricity. (81) In reviewing compliance with Article 106 TFEU, the national court should thus examine whether, and to what extent, the relevant national law requires a ‘periodic re-examination, at close intervals, of the need for [the government] to intervene in the [electricity] sector and the manner of its doing so, having regard to the development of that sector’. (82)
109. Naturally, it falls to the national court to apply those principles. However, assuming that the analysis were to focus exclusively on the mandatory contribution, (83) in view of what has been submitted to the Court on this issue, it appears that periodic review of the ratione personae (namely, the payers) of the mandatory compensation is not required by Law 24/2013 or Royal Decree‑Law 968/2014. Instead, the parties explain that the only element of that system that appears to be subject to regular review is the distribution percentages of the amounts to be financed by means of the mandatory contribution, which are adjusted on a yearly basis.
110. If those observations hold true, the requirement of proportionality referred to above would not be complied with if the mandatory contribution, arising from Law 24/2013, and as implemented by Royal Decree‑Law 968/2014, were open-ended and not subject to any review mechanism. After all, the principle of proportionality requires that there be a reflection of the evolution of costs. (84) Subject to confirmation by the referring court, that requirement does not appear to be satisfied in the present case.
111. I should point out that these principles should not be understood as questioning the power of the Member States to define what is ‘worthy’ of a ‘public service obligation’. With regard to the electricity sector, recitals 47 and 50 of Directive 2009/72 expressly recognise the autonomy of the Member States to define and designate ‘public service obligations’ at national level, taking into account national circumstances. (85) Thus, when acting in accordance with Article 3(2) of Directive 2009/72 to establish the scope and organisation of such services, the Member States enjoy a reasonable degree of discretion. (86)
112. It is only at the level of its implementation that EU law imposes certain conditions. Those relate, first, to the question of whether the designation by the Member States actually falls within the autonomous concept of EU law of ‘public service obligation’, as laid down in Article 3(2) of Directive 2009/72. (87) Where that is the case, the conditions set out in Article 3(2) of that directive must apply. (88) The need to review the obligation in the light of the conditions set out in that provision arises only when the alleged ‘public service compensation’ satisfies the requirements attached to a true ‘public service obligation’, within the meaning of Article 3(2) of Directive 2009/72.
(b) Compensation and‘public service obligations’
113. As the previous section of this Opinion has demonstrated, it is not always easy to assess whether the ‘public service obligation’ is proportionate, if approached as a bundle. However, if the mandatory contribution were to be seen as a stand-alone (or a ‘severed’ element of a larger) ‘public service obligation’, which were to be therefore examined separately and in its own right, then it is with regard to the existence of the potential duty to compensate that this discussion goes from being ‘challenging’ to ‘bizarre’.
114. That is because the question then becomes one of whether the applicants are able to claim compensation for paying the compulsory contribution. In other words, does Directive 2009/72 impose on the Member States the duty to pay money for the payment of money? In my view, that is yet another reason why it is difficult to treat the mandatory contribution, in and of itself, as a ‘public service obligation’. (89)
115. However, be that as it may, if the second question raised by the referring court were to be addressed in the abstract, where a true ‘public service obligation’ arises, within the meaning of Article 3(2) of Directive 2009/72, does that provision mandate a compensation structure?
116. The Spanish Government and the Commission explain that there is no automatic obligation to provide compensation in circumstances where there is a ‘public service obligation’ within the meaning of Article 3(2) of Directive 2009/72.
117. In general and in the abstract, I indeed agree with that position: it is clear that no such requirement arises from Article 3(2) of Directive 2009/72. Nor does such an obligation derive from Article 106 TFEU, to which that provision relates, or other EU law instruments on services of general economic interest. (90) Indeed, as has consistently been recognised in the case-law of the Court, the Member States have a wide discretion to decide whether or not to award compensation, (91) subject to the principles deriving from the judgment in Altmark. (92)
118. Although opposed by all parties, with the exception of the Spanish Government and the Commission, that same conclusion should be extended to Article 3(6) of Directive 2009/72. That provision concerns a situation where compensation has been granted, and makes the granting of such compensation subject to the condition of non-discrimination.
119. Indeed, any reasonable reading of Article 3(6) of Directive 2009/72 leads to the conclusion that that provision, in and of itself, does not contain an obligation, for the specific case of the electricity sector, to award compensation for the fulfilment of a ‘public service obligation’. (93) Nor can such an obligation be construed from the general objective pursued by Directive 2009/72. That leads me to the finding that a measure, which does not provide for compensation for the fulfilment of a (true) ‘public service obligation’ is not in itself incompatible with Article 3(6) of Directive 2009/72.
120. Rather, the principles arising from a combined reading of the provisions of Article 3(2) and (6) of Directive 2009/72 are such that all undertakings on the electricity market be treated equally in relation to both the cost of performing that ‘public service obligation’ and any compensation that a Member State may grant. In this way, no distortion of the market concerned arises and the objective of Directive 2009/72 is maintained.
121. I make those observations subject to two caveats.
122. First, and again, as explained in points 117 to 119 of this Opinion, the directive may accept a certain limitation of the freedom to operate on the internal market in electricity in the general interest of performing a ‘public service obligation’. However, it does so only with regard to true ‘public service obligations’ and not with respect to ‘bundles’ of distantly connected measures which include (what looks a lot like) a parafiscal tax. Otherwise, as I have explained in points 113 and 114 of this Opinion, the entire assessment of proportionality becomes circular: does a proportional measure really require monetary compensation for taking away money?
123. Second, the cost of fulfilling the ‘public service obligation’ must be reasonable. Naturally, the Member States cannot force an undertaking that is active on a certain market to, de facto, part with its property under the guise of implementing a ‘public service obligation’ simply because the specific legal framework of Article 106 TFEU and Directive 2009/72 per se require compensation in return for the fulfilment of such an obligation. (94)
124. In other words, it is conceivable that, even if treating all undertakings on the market equally and making them subject to the same burden, that burden itself would simply be too onerous. It is conceivable that only in exceptional cases, where there would no longer be any ‘fair balance’ between the general interest and the individual interest, an interference with the essence of the right to property could arise, in breach of Article 17 of the Charter and Article 1 of Protocol No 1 to the European Convention on Human Rights. (95)
V. Conclusion
125. I propose that the Court answer the first question referred for a preliminary ruling by the Tribunal Supremo (Supreme Court, Spain) as follows:
Article 3(2) of Directive 2009/72/EC of the European Parliament and of the Council of 13 July 2009 concerning common rules for the internal market in electricity and repealing Directive 2003/54/EC must be interpreted as precluding a national law that imposes, without objective justification which clearly flows from the nature of the general economic interest pursued, a mandatory financial contribution solely on certain electricity undertakings performing production, distribution, and retail activities for the purposes of financing a system, which applies regulated discounts on the price of electricity directly to the electricity bill of eligible consumers.
1 Original language: English.
2 Directive of the European Parliament and of the Council of 13 July 2009 concerning common rules for the internal market in electricity and repealing Directive 2003/54/EC (OJ 2009 L 211, p. 55).
3 Directive of the European Parliament and of the Council of 26 June 2003 concerning common rules for the internal market in electricity and repealing Directive 96/92/EC – Statements made with regard to decommissioning and waste management activities (OJ 2003 L 176, p. 37).
4 In the context of ‘public service obligations’ under Directive 2009/72, the concept of ‘supplier of last resort’ refers to a company, appointed by a Member State, which ensures the continuity of supply for energy consumers (including household consumers), at ‘reasonable prices’ (so-called ‘tariffs of last resort’). See recital 47, Article 3(3) and Article 37(6) of Directive 2009/72.
5 Pursuant to Article 6 of Real Decreto 897/2017 (Royal Decree-Law 897/2017), that price reflects a 25% discount on the market price for electricity in Spain for ‘vulnerable’ consumers, and a discount of 40% on the same for ‘extremely vulnerable’ consumers.
6 STS 1425/2012 of 7 February 2012 (ECLI:ES:TS:2012:1425).
7 Similar decrees exist for the following years, such as Orden IET/2182/2015 (for 2015) and Orden IET/1451/2016 (for 2016).
8 Judgment of 20 April 2010 (C‑265/08, EU:C:2010:205).
9 Judgment of 7 September 2016 (C‑121/15, EU:C:2016:637).
10 EDP España notes that that practice is also reflected, inter alia, in judgments 46/2019 of 8 April 2019 (ECLI:ES:TC:2019:46); 54/2019 of 6 May 2019 (ECLI:ES:TC:2019:54); 58/2019 of 6 May 2019 (ECLI:ES:TC:2019:58); 59/2019 of 6 May 2019 (ECLI:ES:TC:2019:59); 67/2019 of 20 May 2019 (ECLI:ES:TC:2019:67); 71/2019 of 20 May 2019 (ECLI:ES:TC:2019:71); and 81/2019 of 17 June 2019 (ECLI:ES:TC:2019:81).
11 Judgment of 10 December 2018, Wightman and Others(C‑621/18, EU:C:2018:999, paragraph 27).
12 Judgment of 12 December 2019, Slovenské elektrárne (C‑376/18, EU:C:2019:1068, paragraph 24). For the rather limited circumstances in which the Court may refuse to provide a ruling on a question referred; see, for instance, judgment of 26 March 2020, Miasto Łowicz and Prokurator Generalny (C‑558/18 and C‑563/18, EU:C:2020:234, paragraph 44).
13 Judgment of 16 July 2020, Facebook Ireland and Schrems (C‑311/18, EU:C:2020:559, paragraph 73 and the case-law cited).
14 See, in that regard, judgments of 11 March 1980, Foglia (104/79, EU:C:1980:73, paragraph 11); of 16 December 1981, Foglia(244/80, EU:C:1981:302, paragraphs 17 and 18); and of 26 March 2020, Miasto Łowicz and Prokurator Generalny(C‑558/18 and C‑563/18, EU:C:2020:234, paragraph 53).
15 Judgment of 6 October 1982, CILFIT and Others (283/81, EU:C:1982:335, paragraphs 16 to 20).
16 For illustrations of different systems other than Spain, see, for example, decisions of constitutional courts in Germany, Bundesverfassungsgericht, order of 9 May 2018 – 2 BvR 37/18; in the Czech Republic, Ústavní soud, 8 January 2009, No II. ÚS 1009/08; in Croatia, Ustavni sud Republike Hrvatske, decision No U-III-2521/2015 of 13 December 2016; in Slovakia, Ústavný súd, judgment of 18 April 2012, No II. ÚS 140/2010; in Slovenia, Ustavno sodišče, decision No Up-1056/11 of 21 November 2013, ECLI:SI:USRS:2013:Up.1056.11.
17 For a comparative overview, see already, Solar, N., Vorlagepflichtverletzung mitgliedstaatlicher Gerichte und ihre Sanierung, Neuer Wissenschaftlicher Verlag, Vienna, 2004. More recently, for example, see the individual country reports in Coutron, L. (dir.), L’obligation de renvoi préjudiciel à la Cour de justice: une obligation sanctionnée?, Bruylant, Brussels, 2014, or the individual contributions in the special issue of 2015, German Law Journal, vol. 16/6, in particular Lacchi, C., ‘Review by Constitutional Courts of the Obligation of National Courts of Last Instance to Refer a Preliminary Question to the Court of Justice of the EU’, p. 1663.
18 See, for instance, judgments of 16 December 2008, Cartesio (C‑210/06, EU:C:2008:723, paragraphs 94 and 95 and the case-law cited); of 5 April 2016, PFE (C‑689/13, EU:C:2016:199, paragraph 32 and the case-law cited); and of 4 December 2018, The Minister for Justice and Equality and Commissioner of the Garda Síochána (C‑378/17, EU:C:2018:979, paragraphs 35, 36 and 49 and the case-law cited).
19 As reflected, inter alia, in judgments of 5 October 2010, Elchinov(C‑173/09, EU:C:2010:581, paragraph 27 and the case-law cited), and of 15 January 2013, Križan and Others (C‑416/10, EU:C:2013:8, paragraph 68 and the case-law cited).
20 Starting already with the judgment of 16 January 1974, Rheinmühlen-Düsseldorf (166/73, EU:C:1974:3).
21 See in greater detail my Opinion in Ministerul Public - Parchetul de pe lângă Înalta Curte de Casaţie şi Justiţie – Direcţia Naţională Anticorupţie and Others (C‑357/19 and C‑547/19, EU:C:2021:170, points 235 to 243).
22 See, by analogy, judgment of 21 December 2016, Gutiérrez Naranjo and Others(C‑154/15, C‑307/15 and C‑308/15, EU:C:2016:980, paragraph 65).
23 Judgment of 22 October 1987, Foto-Frost (314/85, EU:C:1987:452, paragraph 15).
24 Critically see, for example, Opinion of Advocate General Jacobs in Wiener SI (C‑338/95, EU:C:1997:352); of Advocate General Ruiz-Jarabo Colomer in Gaston Schul Douane expediteur (C‑461/03, EU:C:2005:415); or of Advocate General Wahl in Joined Cases X and van Dijk (C‑72/14 and C‑197/14, EU:C:2015:319).
25 Judgments of 19 January 2010, Kücükdeveci(C‑555/07, EU:C:2010:21, paragraphs 53 to 55); of 5 October 2010, Elchinov(C‑173/09, EU:C:2010:581, paragraph 28); and order of 3 September 2020, Vikingo Fővállalkozó (C‑610/19, EU:C:2020:673, paragraph 75).
26 See already judgment of 9 March 1978, Simmenthal (106/77, EU:C:1978:49, paragraph 22). See also, more recently for example, judgment of 4 December 2018, The Minister for Justice and Equality and Commissioner of the Garda Síochána (C‑378/17, EU:C:2018:979, paragraphs 36 and 37 and the case-law cited).
27 It could certainly be suggested that a national constitutional court is only concerned with national constitutional law. Thus, it interprets national constitutional rules only, and does not interpret either ‘mere’ national law or, a fortiori, ‘mere’ EU law, both of which may be equated with facts. Doctrinal comfort as such an idea might provide, the case-law practice frequently demonstrates how untenable that fiction is. Moreover, in the specific context of reviewing whether or not there was an acte clair before a court of last instance in a specific case, one cannot but admire the skill to review substance without ever engaging with and interpreting that substance. It is like Schrödinger’s dream finally coming true: being able to say clearly whether the (CILFIT) cat is dead or alive without ever having to open the (EU law) box.
28 See, by analogy, judgments of 4 November 1997, Parfums Christian Dior(C‑337/95, EU:C:1997:517, paragraphs 24 to 26); of 4 June 2002, Lyckeskog(C‑99/00, EU:C:2002:329, paragraphs 14 and 15); and of 15 September 2005, Intermodal Transports (C‑495/03, EU:C:2005:552, paragraph 30).
29 Judgment of 30 April 2020 (C‑5/19, EU:C:2020:343, paragraphs 55, 56, 69, and 88).
30 Judgment of 3 April 2014, CTP(C‑516/12 to C‑518/12, EU:C:2014:220, paragraph 12). However, compare with, Opinion of Advocate General Cruz Villalón in CTP(C‑516/12, EU:C:2014:63, points 36 to 38).
31 Judgment of 28 October 2010, Commission v Malta (C‑508/08, EU:C:2010:643 paragraph 6)
32 Judgment of 7 May 2009, Antrop and Others (C‑504/07, EU:C:2009:290, paragraph 9),
33 Judgment of 21 December 2011, ENEL (C‑242/10, EU:C:2011:861, paragraphs 51 to 52, 55 and 81).
34 See, however, the wording of the fifth recital of Royal Decree‑Law 9/2013 which appears to designate the financing element of the regulated discount, presumably the mandatory contribution, as a ‘public service obligation’.
35 Judgment of 19 December 2019 (C‑523/18, EU:C:2019:1129).
36 Ibid.
37 Ibid.
38 Ibid., paragraph 22.
39 Ibid., paragraphs 28 to 29.
40 Ibid., paragraphs 33 to 34.
41 See, to that effect, judgment of 20 April 2010, Federutility and Others (C‑265/08, EU:C:2010:205, paragraph 26).
42 Judgment of 19 December 2019, Engie Cartagena(C‑523/18, EU:C:2019:1129, paragraph 42). See also paragraphs 45 and 48 thereof.
43 Ibid., paragraph 43.
44 Ibid., paragraph 45.
45 Ibid., paragraph 51.
46 Ibid., paragraphs 40 to 45.
47 Ibid., paragraph 54.
48 Judgment of 30 April 2020 (C‑5/19, EU:C:2020:343, paragraphs 55, 56 and 88).
49 Judgments of 7 November 2019, UNESA and Others (C‑80/18 to C‑83/18, EU:C:2019:934, paragraph 56); of 7 November 2019, UNESA and Others (C‑105/18 to C‑113/18, EU:C:2019:935, paragraph 53); and of 19 December 2019, Engie Cartagena (C‑523/18, EU:C:2019:1129, paragraph 50).
50 See judgment of 18 January 2017, IRCCS – Fondazione Santa Lucia (C‑189/15, EU:C:2017:17, paragraph 29 and the case-law cited).
51 Judgment of 19 December 2019, Engie Cartagena (C‑523/18, EU:C:2019:1129, paragraph 32).
52 See, to that effect, judgment of 14 January 2016, Commission v Belgium (C‑163/14, EU:C:2016:4, paragraph 44).
53 See judgment of 18 January 2017, IRCCS – Fondazione Santa Lucia (C‑189/15, EU:C:2017:17, paragraph 32 and the case-law cited).
54 Ibid., paragraph 34.
55 Ibid., paragraph 35 and the case-law cited.
56 Similarly, judgment of 19 December 2019, Engie Cartagena (C‑523/18, EU:C:2019:1129, paragraph 32 and the case-law cited).
57 See, as regards the objective that Directive 2009/72 pursues with respect to the internal market for electricity, judgment of 19 December 2019, Engie Cartagena (C‑523/18, EU:C:2019:1129, paragraph 47).
58 Judgment of 19 December 2019 (C‑523/18, EU:C:2019:1129, paragraph 55).
59 Judgment of 12 December 2019, Slovenské elektrárne(C‑376/18, EU:C:2019:1068, paragraph 34).
60 Judgment of 19 December 2019, Engie Cartagena (C‑523/18, EU:C:2019:1129, paragraphs 52 and 53).
61 See, to that effect, judgment of 19 December 2019, Engie Cartagena (C‑523/18, EU:C:2019:1129, paragraph 54).
62 See Opinion of Advocate General Hogan in Engie Cartagena (C‑523/18, EU:C:2019:769, point 54). My emphasis.
63 Judgment of 19 December 2019, Engie Cartagena (C‑523/18, EU:C:2019:1129, paragraph 48 and the case-law cited).
64 See, to that effect, Opinion of Advocate General Mengozzi in ANODE(C‑121/15, EU:C:2016:248, point 82).
65 See, to that effect, of 30 April 2020, Оvergas Mrezhi and Balgarska gazova asotsiatsia (C‑5/19, EU:C:2020:343, paragraph 80).
66 See, to that effect, judgment of 29 September 2016, Essent Belgium (C‑492/14, EU:C:2016:732, paragraphs 79 to 81 and the case-law cited).
67 On the transitivity of such arguments, see my Opinion in Hornbach-Baumarkt (C‑382/16, EU:C:2017:974).
68 Judgment of 7 September 2016, ANODE (C‑121/15, EU:C:2016:637, paragraph 55 and the case-law cited).
69 Judgment of 29 September 2016, Essent Belgium (C‑492/14, EU:C:2016:732, paragraph 81 and the case-law cited).
70 To that effect, ibid, paragraph 97.
71 See judgment of 7 September 2016, ANODE (C‑121/15, EU:C:2016:637, paragraph 71).
72 See, by analogy, judgment of 30 April 2020, Оvergas Mrezhi and Balgarska gazova asotsiatsia (C‑5/19, EU:C:2020:343, paragraph 57 and the case-law cited).
73 Ibid., paragraph 58 and the case-law cited.
74 Ibid., paragraph 60 and the case-law cited.
75 Judgment of 7 September 2016, ANODE(C‑121/15, EU:C:2016:637, paragraph 53 and the case-law cited).
76 See, by analogy, judgment of 7 September 2016, ANODE(C‑121/15, EU:C:2016:637, paragraph 36).
77 See, to that effect, judgment of 11 April 2019, Repsol Butano and DISA Gas (C‑473/17 and C‑546/17, EU:C:2019:308, paragraphs 55, 56 and 62 and the case-law cited).
78 Judgment of 19 December 2019, Engie Cartagena (C‑523/18, EU:C:2019:1129, paragraph 45).
79 Ibid., paragraph 51.
80 Ibid., paragraph 47 and the case-law cited.
81 Judgment of 20 April 2010, Federutility and Others (C‑265/08, EU:C:2010:205, paragraph 35).
82 Judgment of 20 April 2010, Federutility and Others (C‑265/08, EU:C:2010:205, paragraph 35). See also judgment of 11 April 2019, Repsol Butano and DISA Gas (C‑473/17 and C‑546/17, EU:C:2019:308, paragraph 56).
83 Leaving completely aside the temporal review and proportionality of the regulated discount, which would again require a very different type of assessment, involving different actors and different considerations.
84 Judgment of 11 April 2019, Repsol Butano and DISA Gas (C‑473/17 and C‑546/17, EU:C:2019:308, paragraph 59 and the case-law cited).
85 In line with Protocol (No 26) on services of general interest, annexed to the EU Treaty. See, to that effect, judgment of 7 September 2016, ANODE(C‑121/15, EU:C:2016:637, paragraphs 40 to 42).
86 Judgment of 19 December 2019, Engie Cartagena (C‑523/18, EU:C:2019:1129, paragraphs 35 to 36). See also, to that effect, judgments of 20 April 2010, Federutility and Others (C‑265/08, EU:C:2010:205, paragraphs 28 and 29), and of 21 December 2011, ENEL (C‑242/10, EU:C:2011:861, paragraph 50).
87 Judgment of 19 December 2019, Engie Cartagena (C‑523/18, EU:C:2019:1129, paragraph 34 and the case-law cited).
88 Ibid., paragraph 48.
89 See above, points 44 and 48 to 49 of this Opinion.
90 Such as the Green Paper on services of general interest (COM(2003) 270 final); Communication from the Commission on the application of the European Union State aid rules to compensation granted for the provision of services of general economic interest (OJ 2012 C 8, p. 4); Communication from the Commission – European Union framework for State aid in the form of public service compensation (2011) (OJ 2012 C 8, p. 15); or Commission Decision of 20 December 2011 on the application of Article 106(2) of the Treaty on the Functioning of the European Union to State aid in the form of public service compensation granted to certain undertakings entrusted with the operation of services of general economic interest (OJ 2012 L 7, p. 3).
91 Judgments of 12 February 2008, BUPA and Others v Commission (T‑289/03, EU:T:2008:29, paragraph 214 and the case-law cited); of 7 November 2012, CBI v Commission (T‑137/10, EU:T:2012:584, paragraph 191); of 16 July 2014, Germany v Commission (T‑295/12, not published, EU:T:2014:675, paragraph 87); and of 16 July 2014, Zweckverband Tierkörperbeseitigung v Commission(T‑309/12, not published, EU:T:2014:676, paragraph 148).
92 Judgment of 24 July 2003, Altmark Trans and Regierungspräsidium Magdeburg (C‑280/00, EU:C:2003:415, paragraph 95).
93 See also Article 9(3) of Directive (EU) 2019/944 of the European Parliament and of the Council of 5 June 2019 on common rules for the internal market for electricity and amending Directive 2012/27/EU (OJ 2019 L 158, p. 125), which contains virtually the same wording.
94 See Article 6(2) of Regulation (EEC) No 1191/69 of the Council of 26 June 1969 on action by Member States concerning the obligations inherent in the concept of a public service in transport by rail, road and inland waterway (OJ, English Special Edition 1969(I), p. 276), which contained such a ‘right’ to compensation. See judgment of 3 April 2014, CTP (C‑516/12 to C‑518/12, EU:C:2014:220, paragraph 34).
95 See, ECtHR, 22 September 1994, Hentrich v. France (ECLI:CE:ECHR:1994:0922JUD001361688, § 49 and the case-law cited), and ECtHR, 19 June 2006, Hutten-Czapska v. Poland (ECLI:CE:ECHR:2006:0619JUD003501497, § 167 and the case-law cited). See also, for instance, ECtHR, 5 November 2002, Pincová and Pinc v. the Czech Republic (ECLI:CE:ECHR:2002:1105JUD003654897, § 53).
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