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On returning a petition to the petitioner

 THE CONSTITUTIONAL COURT OF THE REPUBLIC OF LITHUANIA

 DECISION

ON THE PETITION OF A GROUP OF MEMBERS OF THE SEIMAS, THE PETITIONER, REQUESTING AN INVESTIGATION INTO WHETHER A PROVISION OF THE REPUBLIC OF LITHUANIA’S LAW ON ENERGY FROM RENEWABLE SOURCES AND THE LAW AMENDING AND SUPPLEMENTING THIS LAW ARE NOT IN CONFLICT WITH THE CONSTITUTION OF THE REPUBLIC OF LITHUANIA

 18 June 2014, No. KT33-S24/2014
Vilnius

The Constitutional Court of the Republic of Lithuania, composed of the Justices of the Constitutional Court: Elvyra Baltutytė, Vytautas Greičius, Danutė Jočienė, Pranas Kuconis, Gediminas Mesonis, Vytas Milius, Egidijus Šileikis, Algirdas Taminskas, and Dainius Žalimas

The court reporter—Daiva Pitrėnaitė

The Constitutional Court of the Republic of Lithuania considered, at its procedural sitting, the petition (No. 1B-37/2014) of a group of members of the Seimas of the Republic of Lithuania, the petitioner.

The Constitutional Court

has established:

  1. A group of members of the Seimas, the petitioner, requests an investigation into whether:

– the Republic of Lithuania’s Law Amending and Supplementing Articles 2, 11, 13, 14, 16, 20, and 21 of the Law on Energy from Renewable Sources, in view of the procedure of its adoption, is not in conflict with Paragraph 1 of Article 69 and Article 76 of the Constitution of the Republic of Lithuania and the constitutional principle of a state under the rule of law, whilst in view of the procedure of its entry into force—with Paragraph 2 of Article 7 of the Constitution of the Republic of Lithuania and the constitutional principle of a state under the rule of law;

– the provision “revised maximum permitted fixed rates shall apply only to the producers whose power plants have been issued an authorisation for electricity production after the entry into force of the rates” of Paragraph 6 (wording of 17 January 2013) of Article 20 of the Republic of Lithuania’s Law on Energy from Renewable Sources is not in conflict with Paragraph 2 of Article 5 and Paragraphs 1–3 of Article 46 of the Constitution of the Republic of Lithuania and the constitutional principle of a state under the rule of law.

  1. The petition of the petitioner is substantiated by the following arguments.

2.1. According to the impugned provision of Paragraph 6 (wording of 17 January 2013) of Article 20 of the Law on Energy from Renewable Sources, electricity produced from renewable sources is purchased on the grounds of the revised maximum permitted fixed rates established by an authorised institution, where the said rate was valid not on the day of the issuing of the permit to develop the facilities generating electricity, but on the day of the issuing of the permit to produce electricity, however, the rate was established that is smaller than the one established before for the purchase of electricity produced from renewable sources, thus, the legal regulation consolidated in this provision violates the duty arising out of the provisions of Article 46 of the Constitution to support economic efforts and initiative that are useful to society.

In consolidating this legal regulation, the Seimas also disregarded the principles of legal certainty, legal security, the protection of legitimate expectations of producers of electricity from renewable sources of energy, the principle of lex retro non agit, which stem from the constitutional principle of a state under the rule of law, since it partially changed the already established legal relations, it did not provide for any transitional period and failed to take account of the fact that the economic entities that had been issued permits to develop their facilities generating electricity and that had been aware of the rates at which they would have been able to sell the electricity produced in their solar power plants, reasonably expected and were aware of the income that they would receive in the future. Therefore, such economic entities have lost their trust in the State of the Republic of Lithuania and law.

2.2. The other part of the argumentation is virtually the comparison between the content of the impugned legal regulation and the former legal regulation as well as other provisions (the objectives of the law) of the same law. The same part of the argumentation also contains the quoting of provisions of the Constitution, the official constitutional doctrine, the law, a substatutory legal act, and the explanatory note to the law.

The Constitutional Court

holds that:

1. On 12 May 2011, the Seimas adopted the Republic of Lithuania’s Law on Energy from Renewable Sources that came into force on 24 May 2011. Paragraph 7 of Article 20 “Promotion of the Use of Renewable Energy Sources for Electricity Production” of this law prescribed:

“The National Control Commission for Prices and Energy shall, every year, assess the progress in production of electricity from various renewable energy sources having regard to the actual amount of electricity generated over the previous calendar year, the total installed capacity of power plants in operation and the total intended capacity of the power plants under construction. The fixed rates for power plants whose installed capacity does not exceed 30 kW, and the maximum permitted fixed rates shall be revised having regard to the development of production of electricity from renewable energy sources and the compliance of this development with the goals and tasks specified in the National Action Plan for the Development of the Use of Energy from Renewable Sources. The revised fixed rates and the maximum permitted fixed rates shall be applied only to the producers whose power plants have been issued an authorisation for electricity production after the day that these rates were amended.”

On 17 January 2013, the Seimas adopted the Law Amending and Supplementing Articles 2, 11, 13, 14, 16, 20, and 21 of the Law on Energy from Renewable Sources, which, save the exceptions established therein, came into force on 1 February 2013. By means of Article 6 of this law, Article 20 of the Law on Energy from Renewable Sources was amended.Paragraph 6 of Article 20 (wording of 17 January 2013) of the Law on Energy from Renewable Sources prescribes:“The National Control Commission for Prices and Energy shall, not more frequently than on a quarterly basis, assess the progress in production of electricity from various renewable energy sources having regard to the actual amount of electricity generated over the previous calendar year, the total installed capacity of power plants in operation and the total intended capacity of the power plants under construction. The maximum permitted fixed rates shall be revised having regard to the development of production of electricity from renewable energy sources and compliance of this development with the goals and tasks specified in the National Action Plan for the Development of the Use of Energy from Renewable Sources. The revised maximum permitted fixed rates shall apply only to the producers whose power plants have been issued an authorisation for electricity production after the entry into force of the rates.”Thus, if a comparison is drawn between the former and present legal regulation, Paragraph 6 of Article 20 (wording of 17 January 2013) of the Law on Energy from Renewable Sources provides, inter alia, that the beginning of the application of the revised maximum permitted fixed rates is related not to the issuing of an authorisation for the development of facilities generating electricity, but rather to the day of the issuing of an authorisation for electricity production.2. According to Item 8 of Paragraph 1 of Article 66 of the Law on the Constitutional Court, a petition for an investigation into the compliance of a legal act with the Constitution must contain the position of the petitioner concerning the compliance of an appropriate act with the Constitution and the legal support of such a position containing the references to laws, i.e., it must contain the legal arguments of the petitioner regarding the conflict of a relevant legal act with the Constitution.When construing the aforesaid provision of the Law on the Constitutional Court, the Constitutional Court has held on more than one occasion that the position of the petitioner concerning the compliance of a legal act (part thereof) with the Constitution according to the content of the norms and/or the scope of regulation must be indicated clearly and unambiguously, the petition must contain the arguments and reasoning grounding the doubt of the petitioner on whether the legal act (part thereof) is not in conflict with the Constitution. Otherwise, the petition requesting an investigation into the compliance of a legal act (part thereof) with the Constitution in view of the content of norms and/or the scope of regulation must be considered to be not in line with the requirements of Article 66 of the Law on the Constitutional Court (inter alia, the Constitutional Court’s decisions of 16 April 2004, 5 March 2012, and 25 April 2012).

  1. It should be noted that the petitioner did not present any legal arguments substantiating its position on the conflict of the Law Amending and Supplementing Articles 2, 11, 13, 14, 16, 20, and 21 of the Law on Energy from Renewable Sources, in view of the procedure of its adoption and entry into force, with the Constitution. The doubts set forth in the petition are not related to the procedure of the adoption and entry into force of this law. Nor are such doubts related to the compliance of this law, in view of the procedure of its adoption and entry into force, with Paragraph 1 of Article 69, Article 76, and Paragraph 2 of Article 7 of the Constitution.
  2. It should also be noted that the petition does not contain any legal arguments substantiating the position of the petitioner as regards the conflict of the provision “revised maximum permitted fixed rates shall apply only to the producers whose power plants have been issued an authorisation for electricity production after the entry into force of the rates” of Paragraph 6 (wording of 17 January 2013) of Article 20 of the Law on Energy from Renewable Sources with Paragraph 2 of Article 5 and Paragraphs 1–3 of Article 46 of the Constitution and the constitutional principle of a state under the rule of law.

4.1. It has been mentioned that, according to the petitioner, under the impugned provision of Paragraph 6 (wording of 17 January 2013) of Article 20 of the Law on Energy from Renewable Sources, the rate was established that is smaller than the one established before for the purchase of electricity produced from renewable sources.As mentioned before, if a comparison is drawn between the former and present legal regulation, Paragraph 6 of Article 20 (wording of 17 January 2013) of the Law on Energy from Renewable Sources provides, inter alia, that the beginning of the application of the revised maximum permitted fixed rates is related not to the issuing of an authorisation for the development of facilities generating electricity, but rather to the day of the issuing of an authorisation for electricity production.It should be noted that the fact that the beginning of the application of the revised maximum permitted fixed rates is connected not with the issuing of an authorisation for the development of facilities generating electricity, but rather to the day of the issuing of an authorisation for electricity production does not in itself imply the reduction of such rates or the establishment of unfavourable conditions for electricity producers.In this context, it should also be noted that the Law on Energy from Renewable Sources consolidates the general principles of the establishment and application of the purchase rates (revision of the maximum permitted fixed rates) of electricity produced from renewable sources. This law does not establish any concrete sizes of the purchase rates of electricity produced from renewable sources, inter alia, the impugned norm of the law does not provide that these rates are subject to reduction.4.2. It should also be noted that, in its petitioner, the petitioner cites the provisions of Article 46 of the Constitution and the official constitutional doctrine disclosing the content of these provisions, inter alia, the fact that the state, while regulating economic activity, must follow the principle of the coordination of interests of persons and society, that the state may not establish any such legal regulation by which the rights and legitimate interests of a certain economic entity would be limited more than necessary for the ensuring of the public interest, and by which unfavourable and unequal conditions for conducting economic activity would be created for economic entities, the initiative of economic entities would be stifled, and no opportunities would be created for such initiative. However, the petitioner does not substantiate the fact of how the impugned legal regulation violates the requirements arising out of Paragraphs 1–3 of Article 46 of the Constitution, inter alia, the duty of the state to support economic efforts and initiative that are useful to society, also how the principle of the coordination of interests of persons and society is violated, how certain economic activity is limited more than necessary for the ensuring of the public interest, how unfavourable conditions for conducting economic activity are created for economic entities, how the initiative of economic entities is stifled, and in what manner no opportunities are created for such initiative.4.3. It should also be noted that the petitioner did not take into consideration the provisions (formulated in the Constitutional Court’s rulings) of the official constitutional doctrine regarding the disclosing of the principles of the regulation of economic activity, which are important in the context of its petition, inter alia, the fact that:– the economic activity of persons may be subject to limitation, where it is necessary to defend the interests of consumers, to protect fair competition and other values consolidated in the Constitution (the Constitutional Court’s rulings of 6 October 1999, 13 May 2005, 21 January 2008, and 29 September 2010);– the establishment of the limits of prices is one of the ways to defend the interests of consumers, it should also be applied, inter alia, in the sphere of the protection and defence of the rights and interests of electricity consumers (the Constitutional Court’s rulings of 2 March 2009 and 29 September 2010);– as a rule, the regulation of economic activity is linked to the establishment of conditions for economic activity, as well as to certain limitations on and prohibitions against this activity; when a person takes part in an economic activity, special law-established limitations may be imposed on them (inter alia, the Constitutional Court’s rulings of 13 May 2005 and 21 June 2011);– due to a specific character, variety and dynamism of economic activity, the regulation of concrete relations in this sphere cannot be the same all the time, the ratio of prohibitions and permissions is subject to change, inter alia, in an attempt to ensure the public interest (the Constitutional Court’s rulings of 31 May 2006, 26 September 2006, 21 December 2006, and 21 June 2011);– the public interest is dynamic and subject to change; due to this, the state may and, in certain cases, must change (expand, abridge, or otherwise correct) the regulation of economic activity (inter alia, the Constitutional Court’s rulings of 30 June 2008, 6 January 2011, and 2 April 2013); neither the legislative nor executive power, while enjoying respective powers in the sphere of economic activity, may opt out of this constitutional obligation (the Constitutional Court’s rulings of 13 May 2005 and 2 April 2013);– the Seimas, as the institution of the legislative power, and the Government, as an institution of executive power, enjoy a very broad discretion to form and execute the economic policy of the state without violating the Constitution and laws under any circumstances (the Constitutional Court’s rulings of 31 May 2006, 21 December 2006, 30 June 2008, 2 March 2009, and 21 June 2011).4.4. It has been mentioned that, in its petition, the petitioner deems the amendment of the provision of Article 20 of the of the Law on Energy from Renewable Sources to be disregard for the principles of legal certainty, legal security, and the protection of legitimate expectations of producers of electricity from renewable sources of energy.In this context, it should be mentioned that, as the Constitutional Court has held on more than one occasion, the assessment of the content (inter alia, priorities), measures and methods of the state economic policy (no matter who assesses them), inter alia, with regard to their reasonableness and expediency, even if it turns out later that there were better alternatives for choosing its economic policies, also the fact that the legal regulation of certain economic activity is amended as the result of a reaction to changes in the market and the economic (and international) market condition, cannot in itself be the reason to question the compliance of the legal regulation of the economic activity conforming to the economic policy (formed and executed before) with the legislation of higher power, inter alia, with the Constitution (the Constitutional Court’s rulings of 31 May 2006, 26 September 2006, and 21 December 2006, and its decision of 13 November 2007). The same is also applicable to assessment of changes in the legal regulation of economic activity. Thus, it should be noted that, as such, amendments to the legal regulation of economic activity do not imply the violation of the principles of legal certainty, legal security, the protection of legitimate expectations of entities of economic activity, which arise out of the constitutional principle of a state under the rule of law.4.5. It has also been mentioned that, according to the petitioner, in consolidating the impugned legal regulation, the Seimas disregarded the principle of lex retro non agit that arises out of the constitutional principle of a state under the rule of law, because it partially changed the already established legal relations. However, the petitioner did not present any legal arguments substantiating the fact that the legal regulation applicable to the prospective purchase of electricity produced from renewable sources has changed the legal relations that came into being on the grounds of the formerly valid provisions of the law and that such legal regulation has violated the principle of lex retro non agit that arises out of the constitutional principle of a state under the rule of law.5. In view of the foregoing circumstances, there are grounds to assert that the group of members of the Seimas, the petitioner, has not substantiated its petition. Thus, the content of the petition of the group of members of the Seimas does not meet the requirements established in Item 8 of Paragraph 1 of Article 66 of the Law on the Constitutional Court, therefore, under Article 70 of the Law on the Constitutional Court, the petition must be returned to the petitioner. The returning of the petition does not take away the right to apply to the Constitutional Court according to the general procedure after the removal of the deficiencies thereof.

Conforming to Paragraphs 3 and 4 of Article 22, Articles 28 and 70 of the Law on the Constitutional Court of the Republic of Lithuania, the Constitutional Court of the Republic of Lithuania adopts the following

decision:

To return the petition (No. 1B-37/2014) to a group of members of the Seimas of the Republic of Lithuania , the petitioner, requesting an investigation into whether:– the Republic of Lithuania’s Law Amending and Supplementing Articles 2, 11, 13, 14, 16, 20, and 21 of the Law on Energy from Renewable Sources, in view of the procedure of its adoption, is not in conflict with Paragraph 1 of Article 69 and Article 76 of the Constitution of the Republic of Lithuania and the constitutional principle of a state under the rule of law, whilst in view of the procedure of its entry into force—with Paragraph 2 of Article 7 of the Constitution of the Republic of Lithuania and the constitutional principle of a state under the rule of law;– the provision “revised maximum permitted fixed rates shall apply only to the producers whose power plants have been issued an authorisation for electricity production after the entry into force of the rates” of Paragraph 6 (wording of 17 January 2013) of Article 20 of the Republic of Lithuania’s Law on Energy from Renewable Sources is not in conflict with Paragraph 2 of Article 5 and Paragraphs 1–3 of Article 46 of the Constitution of the Republic of Lithuania and the constitutional principle of a state under the rule of law.

This decision of the Constitutional Court is final and not subject to appeal.

Justices of the Constitutional Court:                                      Elvyra Baltutytė
                                                                                                           Vytautas Greičius
                                                                                                           Danutė Jočienė
                                                                                                           Pranas Kuconis
                                                                                                           Gediminas Mesonis
                                                                                                           Vytas Milius
                                                                                                           Egidijus Šileikis
                                                                                                           Algirdas Taminskas
                                                                                                           Dainius Žalimas