The third case initiated with respect to norms that defined the compensation that the user of energy paid in the case of infringing the regulations on using natural gas
On 16 December 2019, the 2nd Panel of the Constitutional Court initiated case “On Compliance of Section 423 (1) of Energy Law (in the wording that was in force until 7 March 2016) with Article 64 of the Satversme of the Republic of Latvia, on Compliance of Para 56 and Para 58 of the Cabinet Regulation of 16 December 2008 No. 1048 “Regulation on the Supply and Use of Natural Gas” with Article 64 of the Satversme of the Republic of Latvia and Section 423(1) of the Energy Law (in the wording that was in force until 7 March 2016), as well as Compliance of Para 87 of this Regulation with Article 64 and Article 105 of the Satversme of the Republic of Latvia and Section 423 (1) of Energy Law (in the wording that was in force until 7 March 2016)”.
The Contested Norms
Section 423 (1) of Energy Law (here and hereafter – in the wording that was in force until 7 March 2016):
“If the energy supply merchant detects that the user of energy has violated the Cabinet Regulation on the supply and use of natural gas or the agreement on the supply of natural gas and as the result the amount of consumed natural gas reading has been decreased or the possibility has been created to consume natural gas free of charge the user of energy shall pay to the energy supply operator for the natural gas consumed and compensation. The procedure, in which the energy supply merchant determines the amount of actually consumed natural gas as well as the amount of compensation, shall be established by the Cabinet.”
Para 56 of the Cabinet Regulation of 16 December 2008 No. 1048 “Regulation on the Supply and Use of Natural Gas” (hereinafter – Regulation No. 1048):
“If the system operators detects a violation of this Regulation or the agreement, due to which the result the amount of consumed natural gas reading has been decreased or the possibility has been created for the user to consume natural gas free of charge, the user shall pay to the system operator for the consumed natural gas as well as compensation.”
Para 58 of Regulation No. 1048:
“The system operator shall determine compensation envisaged in Para 56 of this Regulation by multiplying the calculated amount of consumed natural gas by the tariff in double amount.”
Para 87 of Regulation No. 1048:
“The system operators shall calculate the amount of natural gas for a household user consumed as the result of an infringement referred to in Para 56 of this Regulation in accordance with the differentiated consumption norms of natural gas in the procedure of payments approved by the system operator.”
Norms of Higher Legal Force
Article 64 of the Satversme of the Republic of Latvia (hereinafter – the Satversme): “The Saeima, and also the people, have the right to legislate, in accordance with the procedures, and to the extent, provided for by this Constitution.”
Article 105 of the Satversme: “Everyone has the right to own property. Property shall not be used contrary to the interests of the public. Property rights may be restricted only in accordance with law. Expropriation of property for public purposes shall be allowed only in exceptional cases on the basis of a specific law and in return for fair compensation.
Section 423 (1) of Energy Law (quoted above)
The Facts
The case was initiated on the basis of an application by the Riga Regional Court. It is hearing a case, in which a claim has been brought regarding recovery on the basis of the contested norms. It follows from the application that these norms are applicable in the case heard by the Applicant.
The Applicant notes that the authorisation included in Section 423 (1) of the Energy Law has not been defined with sufficient clarity. Moreover, the obligation to pay for natural gas in accordance with the calculation made by the merchant supplying the energy decreases the user’s property; thus, the right to property of the defendant in the case heard by the Applicant is infringed upon. It is maintained that the legitimate aims of this restriction on fundamental rights could be reached by more proportionate measures.
Legal Proceedings
The Constitutional Court has requested the Cabinet to submit to the Constitutional Court a written reply presenting the facts of the case and legal reasoning by 17 February 2020.
The Constitutional Court recognised that it was not necessary to request the Saeima to submit a written reply presenting the facts of the case and legal reasoning because, in 14 June 2019, case No. 2019‑10‑0103 “On Compliance of Section 423 (1) of Energy Law (in the wording that was in force until 7 March 2016) and Para 56 and Para 58 of the Cabinet Regulation of 16 December 2008 No. 1048 “Regulation on the Supply and Use of Natural Gas” with Article 105 of the Satversme of the Republic of Latvia as well as of Para 87 of this Regulation with Article 64 and Article 105 of the Satversme of the Republic of Latvia” was initiated, whereas on 24 September 2019 – case No. 2019‑19‑0103 “On Compliance of Section 423 (1) of Energy Law (in the wording that was in force until 7 March 2016) with Article 64 and Article 105 of the Satversme of the Republic of Latvia and of Para 56 and Para 58 of the Cabinet Regulation of 16 December 2008 No. 1048 “Regulation on the Supply and Use of Natural Gas” with Article 64 and Article 105 of the Satversme of the Republic of Latvia and Section 423 (1) of Energy Law (in the wording that was in force until 7 March 2016)” and the Saeima has already submitted to the Constitutional Court written replies presenting the facts of the case and legal reasoning.
The term for preparing the case is 18 May 2020. The Court will decide on the type of proceedings and the date for hearing the case after the case is prepared.
Linked case: 2019-34-0103