EU Commission Illegal Power Grab Press Release

Dec 18 2013 Published by under European and German energy law

The EU Commission today decided to go through with their attempt to dictate German renewable power policy, a competence that the EU does not have under the Treaties.

The whole decision is not yet available since the Commission was unable to resolve “confidentiality issues”. The only thing we have now is a press release.

It has this to say:

The Commission has examined the EEG-Act 2012 during a preliminary investigation triggered by numerous complaints received from consumers and competitors. In 2012, the EEG-Act was substantially amended. The amendments have changed the structure of the German support mechanism to electricity from renewable sources in such a way that it constitutes state aid in the meaning of EU rules, because it is financed by a resource under the control of the state. The EEG-Act 2012 provides for a surcharge to be imposed on the consumption of electricity. The surcharge is to be managed by the four German transmission system operators according to detailed rules established in the EEG-Act 2012 and implementing regulations. The regulator is in charge of the monitoring of the management of the surcharge. By contrast, the previous system introduced in 1998 was based on a purchase obligation and was found by the Court of Justice not to constitute state aid (Case V-379/98PreussenElektra).

The Commission has found that the public support to producers of renewable electricity granted under the EEG-Act 2012 in the form of feed-in tariffs and market premia constitutes aid but is in line with the Commission’s 2008 guidelines on state aid for environmental protection.

Reading this, it seems that the Commission does not want to challenge the PreussenElektra decision, but instead thinks that the present system is different from the one of 1998. The press release points out two important differences.

For one, it says that the 2012 system provides for a surcharge to be imposed on the consumption of electricity.

That is correct. However, the 1998 system was of course also based on a surcharge. That’s the reason the Court of Justice said that it is not state aid. Only advantages granted directly or indirectly through State resources are to be considered aid. The surcharge was not a “State resource” in 1998, and it is not one now.

The second change, in the view of the Commission, is that the system in place in 1998 was based on a purchase obligation.

The system in place now is based on a purchase obligation. I fail to see what exactly has changed here.

It will be interesting to see if the complete decision makes more sense, once it is published.

The press release also mentions that this is only a preliminary step that mainly has the purpose of giving third parties the chance to comment on the issue.

I’m a third party, and I have a comment:

The EU Commission should stop this crazy and reckless move immediately. It is not compatible with basic values of democracy. The competence to decide about these issues lies firmly with the German legislator. It is none of the Commission’s business.

It may be too early for Germany to completely leave the European Union because of this power grab. I am not sure that I would support such a move. But I am rather angry about this, and I understand that a lot of other people in Germany are angry as well.

For the very least I expect some party or other to bring this matter to the German Federal Constitutional Court. That Court has said in 2009 that it will watch very closely if the EU oversteps its competences. To cite from that decision (translation left out on purpose):

Das Bundesverfassungsgericht prüft, ob Rechtsakte der europäischen Organe und Einrichtungen sich unter Wahrung des gemeinschafts- und unionsrechtlichen Subsidiaritätsprinzips (Art. 5 Abs. 2 EGV; Art. 5 Abs. 1 Satz 2 und Abs. 3 des Vertrags über die Europäische Union in der Fassung des Vertrags von Lissabon <EUV-Lissabon>) in den Grenzen der ihnen im Wege der begrenzten Einzelermächtigung eingeräumten Hoheitsrechte halten (vgl. BVerfGE 58, 1 <30 f.>;75, 223 <235, 242>; 89, 155 <188>: dort zum ausbrechenden Rechtsakt).

I think this clear case of overstepping the EU competences would be an excellent test to see if the German Federal Constitutional Court actually meant that, or if that was just an empty promise.

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