On 18 December, the Department of Administrative Cases of the Senate suspended proceedings in the case initiated on the basis of an application of SIA “DOBELES HES” regarding the decision of the Public Utilities Commission not to compensate the Applicant for losses incurred in the result of the sale of produced electricity. Having examined the cassation complaint of the Public Utilities Commission (hereinafter – the Regulator) and the Applicant's counterclaim against the judgment of the Administrative Regional Court, the Senate had doubts about the interpretation of European Union law, therefore the Senate suspended the proceedings and referred questions to the Court of Justice of the European Union for a preliminary ruling. The proceedings are suspended until the ruling of the Court of Justice of the European Union enters into force.

In the opinion of the Applicant SIA “DOBELES HES” it has incurred losses due to the fact that in the period from March 1, 2006 to November 30, 2007 the Regulator had not set a tariff for the sale of electricity. The losses consist of the difference between the price paid to the Applicant by the public trader and the price at which the public trader would have had to purchase electricity if the average sales tariff for electricity had been set during that period. The Applicant seeks compensation for the damage in the amount of EUR 3406.63.

In the present case, the Applicant is in fact seeking compensation for the part of the aid not received but provided for by law, and not for any other losses. The amount of the losses claimed by the Applicant corresponds to the amount of money that the Applicant would have received but did not receive by selling the surplus electricity produced to the public trader at the relevant time at a price corresponding to twice the average electricity sales tariff.

In the opinion of the Senate, the claim of the Applicant may have to be considered in the context of the legal and factual circumstances of the past as a claim for the payment of aid not previously received in full. During the examination of the case, the Senate had doubts as to whether the provision of historical support to electricity producers constitutes State aid, therefore the Court of Justice of the European Union has been asked to decide the question in the form of a preliminary ruling. In the event that such a type of aid generally corresponds to State aid within the meaning of Article 107 (1) of the Treaty on the Functioning of the European Union, there are doubts as to how this assessment is affected by the process of electricity market liberalization in Latvia.

The Senate has doubts as to whether an indemnification procedure such as that at issue in the present case is compatible with the sectors governed by European Union law, including Article 12 of Directive 2002/20/EC in conjunction with recital 30 of the preamble, and whether the State should ensure that in this situation losses are covered by the funds of the public trader or from the state budget as a whole.

Case No SKA-625/2020; A43007011


Information prepared by Baiba Kataja, the Press Secretary of the Supreme Court

Tel.: +371 67020396; e-mail: baiba.kataja@at.gov.lv