Luxembourg's court will look into energy prices in Slovakia

The government changed the law on energy in 2017, making Slovakia's regulatory body less independent.

PM Robert Fico recommended people tear invoices for electricity after the price increase.PM Robert Fico recommended people tear invoices for electricity after the price increase.(Source: TASR)

The Luxembourg-based Court of Justice of the European Union (CJEU) will look into two important changes that impacted the energy prices in Slovakia. This includes the involvement of the Economy and Environment Ministries in the formation of energy prices and a new method for electing the head of the regulatory authority, the Sme daily reported.

These changes were brought by the Robert Fico government. When electricity bills of some households went up rapidly in 2017, the cabinet recalled Jozef Holjenčík, the former head of the Regulatory Office for Network Industries (ÚRSO).

Subsequently, it decided on returning the electricity prices for citizens to the 2016 level, and the ruling Smer pushed through changes to regulate the prices, with the involvement of the Economy and Environment Ministries.

Read also:Regulated electricity prices for households are going up Read more 

Yet, former president Andrej Kiska challenged the new rules for regulation and the new selection of the ÚRSO head at the Constitutional Court.

The court has turned to CJEU, asking it to interpret the law since the questions, which have to be answered, are closely related to the interpretation of the European Union law, Sme wrote.

It has done so for the first time since 2004. Yet, the court in Luxembourg, which began to study the case this May, cannot fine Slovakia.

“The Constitutional Court has understood it cannot resolve the case without the help of the CJEU,” said Ján Mazák, Kiska's former advisor and former president of the Constitutional Court, as quoted by Sme.

Neither the Economy Ministry nor ÚRSO, which has been headed by ex-economy minister Ľubomír Jahnátek since 2017, have commented on the situation.

Law breaching the EU directive

Five years prior to the 2017 changes to the law on energy, when Smer was the only ruling party, the government had withdrawn from being involved in the decisions over the price formation.

Read also:Bills for utilities have a new boss Read more 

The reason was that it had to comply with the EU directive, adopted in 2009, which sets rules for the electricity common market. The European Commission wanted to make energy regulatory bodies more independent.

“By adopting changes to the energy law, the country returned to the legal state valid prior to the directive, which had been in violation of this directive,” Mazák said, as quoted by Sme.

Pavol Poláček of the Poláček & Partners law firm considers the independence of the ÚRSO crucial since the energy business is all about big money, and politicians want to control it, as reported by Sme.

In 2016, the turnover in electricity business itself was €7.8 billion, the Finstat.sk website wrote.

What will CJEU rule?

Read also:New law would reform utility regulator Read more 

It may take two years for the CJEU to decide on the case, lawyer Rastislav Hanulák of the Capitol Legal law firm said.

The court is expected to say whether the government should be or should not be involved in the price formation and how the ÚRSO head should be appointed.

Prior to 2017, the president had appointed the ÚRSO head upon the government's proposal. However, the government picks the head now.

ÚRSO had criticised changes

Read also:Regulator, under pressure, reverses utility price hikes Read more 

Although the ministries and the Slovak energy regulatory body are silent now, the ÚRSO had been critical of the ministry before the changes became effective.

“Involving the Economy Ministry and the Environment Ministry as participants in the pricing procedure goes against the EU directives,” the ÚRSO wrote in March 2017, as quoted by Sme.

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Theme: Energy


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