A case initiated regarding the suspension of mandatory electricity procurement
On 23 January 2015 the 1st Panel of the Constitutional Court initiated case “On Compliance of Para 100 of the Cabinet Regulation No. 262 of 16 March 2010 “Regulations Regarding the Production of Electricity Using Renewable Energy Sources and the Procedures for the Determination of the Price” with Article 64 of the Satversme of the Republic of Latvia.”
The Contested Norm
The contested norm of the Cabinet Regulation provides: “From 26 May 2011 until 1 January 2016 the Ministry [of Economics] shall not organise tenders for the acquisition of the right to sell electricity produced in biomass, biogas, solar or wind power plants within the scope of mandatory procurement, and the producer may not qualify for selling electricity within the scope of mandatory procurement and for acquisition of the right to receive a guaranteed payment for the installed electric capacity.”
The Norm of Higher Legal Form
Article 64 of 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.”
The Facts
The case has been initiated with regard to the application submitted by the Department of Administrative Cases of the Supreme Court (SC). The Department of Administrative Cases is examining a case, where a company, which produces electricity in hydroelectric stations and sells it in the framework of mandatory procurement, requested issuing of an administrative act on increasing the amount of mandatory procurement. Prior to that the company had submitted this request to the Ministry of Economics; however, the Ministry informed it that the contested norm prohibited increasing the determined amount of electricity procurement until 1 April 2014 (in the wording currently in force – until 1 January 2016).
The SC Department of Administrative Cases holds that in the adoption of the contested norm the authorisation defined by the legislator had not been complied with. The Electricity Market Law defines that a producer that produces electricity by using renewable energy resources may receive the right to sell the produced electricity in the form of the amount of mandatory electricity procurement. The fourth part of Section 29 of the aforementioned Law imposes the obligation of the Cabinet to specify the procedure for implementing and monitoring the mandatory procurement, as well as the procedure for determining the amount and for covering the expenses. I.e., the Cabinet should define the way in which the rights of electricity producers should be implemented, but not whether such rights should be granted to the producers. Therefore the opinion that the contested norm is incompatible with Section 64 of the Satversme is expressed in the application.
Legal Proceedings
The Constitutional Court has requested the Cabinet of Ministers to submit a written reply on the facts of the case and legal substantiation by 23 March 2015.
The term for preparing the case is 23 June 2015. The Court shall decide upon the type of procedure and the date for hearing the case after the case has been prepared.
Linked case: 2015-05-01