The Senate has suspended proceedings in two administrative cases and referred questions to the Court of Justice of the European Union for a preliminary ruling in order to apply its interpretation of European Union law to a dispute concerning the right to build a direct electricity line.

The private parties wished to install a direct electricity line and asked the Public Utilities Regulatory Commission to issue an appropriate authorisation. The Commission refused to issue the authorisation. The private parties applied to court. The dispute in both cases pertains as to whether the electricity line envisaged by the private parties is to be considered a direct line within the meaning of the Electricity Market Law.

The Senate took into account that the Electricity Market Law transposes the regulation on direct lines 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 (recast) and that ‘direct lines’ is an autonomous concept of European Union law. Consequently, the Senate referred to the Court of Justice of the European Union for a preliminary ruling on whether an electricity line such as the one intended by the applicants falls within the concept of a direct line within the meaning of the Directive.

According to the Directive, a direct line is either an electricity line linking an isolated generation site with an isolated customer or an electricity line linking a producer and an electricity supply undertaking to supply directly their own premises, subsidiaries and customers.

In one case, the applicant is a trader engaged in the generation and trading of electricity. The authorisation for the installation of a direct line was sought in order to connect the applicant's existing cable line to the user's facility. This would allow the applicant to supply the user with the electricity produced by its cogeneration plant without the intermediation of the distribution system operator's network.

In the second case, the applicant is a passenger transport operator. The applicant planned to purchase hydrogen-powered city buses and to build a hydrogen production plant. The authorisation for the installation of a direct line was requested in order to connect the hydrogen production plant to a biomass cogeneration plant owned by another party. This would allow the applicant to reduce the costs of increasing the connection capacity and to produce hydrogen by electrolysis using the electricity generated via zero-emission production process.

Although the questions raised in the two cases concern the interpretation of the concept of direct line, the factual circumstances are different and therefore the questions raised by the Senate are also different.

Decision of the Senate of 23 October 2024 in Case No SKA-126/2024 (A43003421) and Decision of the Senate of 31 October 2024 in Case No SKA-124/2024 (A43005521)

 

Ilze Butkus, Communication adviser of the Supreme Court

Telephone: +371 67020302; e-mail: ilze.butkus@at.gov.lv