The Constitutional Court has terminated proceedings in the case on regulatory framework of electricity market
The Constitutional Court has decided to terminate proceedings in the case No. 2009-14-01 “On Compliance of the First Part of Section 30 of the Electricity Market Law with Article 1 of the Satversme (Constitution) of the Republic of Latvia”.
Article 1 of the Satversme provides that Latvia is an independent democratic republic.
The Contested Norm provides the following: “Producers that use renewable energy sources for producing electricity and have launched their activities before coming into force of this Law shall sell electricity to public trader in accordance with the provisions regarding the regime of activities, purchase terms, and prices that were applicable to them at the moment of coming into force of the Law.”
The applicant – the Department of Administrative Cases of the Senate of the Supreme Court indicates that the contested norm would comply with the principle of legal security only if the notion “price” used therein would denote price calculation mechanism. The Public Utilities Commission, however, was not authorized to determine an average rate for realization of electricity, which is necessary to calculate the price; therefore the contested norm can only be interpreted in a way that the notion “price” mentioned therein denotes a fixed rate at the moment of introducing amendments to the regulatory framework. Consequently, producers are not guaranteed legal security as to the price calculation mechanism for electricity purchase.
The Constitutional Court has indicated that such assumption of the applicant is not grounded. Namely, when interpreting the norm, it was concluded that the Public Utilities Commission is authorized to determine an average rate for realization of electricity, and in this case the notion “price” denotes the mechanism of price calculation rather than a fixed or constant price.
Consequently, it can be concluded that there are no grounds to continue proceedings in the case under review.
The judgment of the Constitutional Court is final and not subject to appeal.
Linked case: 2009-14-01