Lt

On public interest services in the electricity sector

Case No. 13/2013-34/2014

 

 

THE CONSTITUTIONAL COURT OF THE REPUBLIC OF LITHUANIA

IN THE NAME OF THE REPUBLIC OF LITHUANIA

 

RULING

ON THE COMPLIANCE OF THE PROVISIONS OF THE RESOLUTIONS OF THE GOVERNMENT OF THE REPUBLIC OF LITHUANIA REGULATING THE PROVISION AND FINANCIAL ADMINISTRATION OF PUBLIC INTEREST SERVICES IN THE ELECTRICITY SECTOR WITH THE CONSTITUTION OF THE REPUBLIC OF LITHUANIA, WITH THE REPUBLIC OF LITHUANIA’S LAW ON ELECTRICITY, AND WITH THE REPUBLIC OF LITHUANIA’S LAW ON ENERGY FROM RENEWABLE SOURCES

 

29 October 2015, No. KT28-N17/2015

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, pursuant to Articles 102 and 105 of the Constitution of the Republic of Lithuania and Articles 1 and 531 of the Law on the Constitutional Court of the Republic of Lithuania, at the Court’s hearing, on 6 October 2015, considered under written procedure constitutional justice case No. 13/2013-34/2014 subsequent to:

1) the petition (No. 1B-18/2013) of the Vilnius Regional Administrative Court, the petitioner, requesting an investigation into whether Item 7.1 of the Description of the Procedure for Rendering Public Interest Services in the Electricity Sector insofar as it provides that public interest services include electricity balancing as well as Items 7.8 and 7.9 of the same Description, as approved by the Resolution of the Government of the Republic of Lithuania (No. 916) “On the Approval of the Description of the Procedure for Rendering Public Interest Services in the Electricity Sector” of 18 July 2012, are (were) in conflict with Paragraph 2 of Article 5 and Item 7 of Article 94 of the Constitution of the Republic of Lithuania, with the constitutional principle of a state under the rule of law, with Paragraphs 1 and 2 of Article 74 of the Republic of Lithuania’s Law on Electricity (wording of 17 January 2012), and with Paragraph 1 of Article 20 of the Republic of Lithuania’s Law on Renewable Energy Sources;

2) the petition (No. 1B-39/2014) of the Vilnius Regional Administrative Court, the petitioner, requesting an investigation into:

whether Items 7.8 and 7.9 of the Description of the Procedure for Rendering Public Interest Services in the Electricity Sector, as approved by the Resolution of the Government of the Republic of Lithuania (No. 916) “On the Approval of the Description of the Procedure for Rendering Public Interest Services in the Electricity Sector” of 18 July 2012, are in conflict with Items 2 and 7 of Article 94 of the Constitution of the Republic of Lithuania, with the constitutional principles of the separation of powers and a state under the rule of law, and with Paragraphs 1 and 2 of Article 74 of the Republic of Lithuania’s Law on Electricity (wording of 17 January 2012);

whether Items 16.3, 16.4, and 17 of the Description of the Procedure for the Administration of Funds Raised from Public Interest Services in the Electricity Sector, as approved by the Resolution of the Government of the Republic of Lithuania (No. 1157) “On the Approval of the Description of the Procedure for the Administration of Funds Raised from Public Interest Services in the Electricity Sector” of 19 September 2012, are in conflict with Items 2 and 7 of Article 94 of the Constitution of the Republic of Lithuania, with the constitutional principles of the separation of powers and a state under the rule of law, as well as with Paragraph 48 of Article 2 and Paragraphs 5 and 6 of Article 48 of the Republic of Lithuania’s Law on Electricity (wording of 17 January 2012).

By the Constitutional Court’s decision of 29 September 2015, the aforesaid petitions were joined into one case and it was given reference No. 13/2013-34/2014.

The Constitutional Court

has established:

I

1. The Vilnius Regional Administrative Court, the petitioner, was considering the administrative cases in which the parties contested the provisions of the decisions adopted by the National Commission for Energy Control and Prices (hereinafter—the Commission) by which the funds of and prices for public interest services had been established for 2013 and 2014 respectively. Contesting the decisions of the Commission, the electricity producers who hold permits to generate electricity in combined heat and power plants and who use generated electricity for their economic needs or supply it for the needs of legal persons situated on their territory had applied to the Vilnius Regional Administrative Court; the claimants in the said administrative cases are also free customers (customers who are entitled under procedure established by law to choose the electricity supplier) who purchase the required electricity from independent electricity suppliers. In the opinion of the claimants in the administrative cases, they are not consumers but rather producers of electricity generated in combined heat and power plants, therefore, they had unlawfully been obligated by the impugned decisions of the Commission to pay for public interest services and for the electricity that they generate themselves and use for their own economic needs.

Having held that there are reasonable grounds for doubting the compliance of the legal regulation that is relevant for the said administrative cases and governs public interest services in the electricity sector with the Constitution and laws, where the said legal regulation is laid down in the Description of the Procedure for Rendering Public Interest Services in the Electricity Sector (hereinafter—the Description of the Procedure for Rendering PISs), as approved by the Government Resolution (No. 916) “On the Approval of the Description of the Procedure for Rendering Public Interest Services in the Electricity Sector” of 18 July 2012, and in the Description of the Procedure for the Administration of Funds Raised from Public Interest Services in the Electricity Sector (hereinafter—the Description of the Procedure for the Administration of Funds Raised from PISs), as approved by the Government Resolution (No. 1157) “On the Approval of the Description of the Procedure for the Administration of Funds Raised from Public Interest Services in the Electricity Sector” of 19 September 2012, the Vilnius Regional Administrative Court suspended the consideration of the administrative cases and applied to the Constitutional Court, requesting an investigation into the compliance of the said legal regulation with the Constitution and laws.

2. The petitions of the Vilnius Regional Administrative Court, the petitioner, contain the following main arguments regarding the compliance of the Description of the Procedure for Rendering PISs with the Constitution and laws.

In violation of the provisions of the Law on Electricity (wording of 17 January 2012), the legal regulation laid down in Items 7.1, 7.8, and 7.9 of the Description of the Procedure for Rendering PISs supplemented the list of public interest services established in the said law: under Paragraph 2 of Article 74 of the Law on Electricity, the Government must approve the list of public interest services in the electricity sector solely in accordance with the provisions of Paragraph 1 of this article; the said paragraph, however, does not categorise the services specified in the impugned items of the Description of the Procedure for Rendering PISs as public interest services. According to the petitioner, there are virtually no grounds for interpreting the legal regulation laid down in Item 1 of Paragraph 1 of Article 74 of the Law on Electricity (wording of 17 January 2012) as meaning that the public interest service (electricity generation from renewable sources) specified in the said item also includes the services pointed out in the provisions of the Description of the Procedure for Rendering PISs (the balancing of electricity generated from renewable sources (Item 7.1), the connection of renewable power plants to electricity grids (Item 7.8), the optimisation, development, and/or reconstruction of electricity grids carried out by the electricity grid operator in order to ensure the development of electricity generation from renewable sources (Item 7.9)). According to the petitioner, Item 7.1 of the Description of the Procedure for Rendering PISs, compared to Paragraph 1 of Article 74 of the Law on Electricity (wording of 17 January 2012) that contains the list of public interest services, lays down an additional public interest service—the balancing of electricity generated from renewable sources. No such public interest service was provided in Paragraph 1 (wording valid prior to 1 February 2013) of Article 20 of the Law on Energy from Renewable Sources which used to prescribe that only electricity generation from renewable energy sources was categorised as a public interest service.

According to its competence defined in the Constitution and laws, in formulating and pursuing the economic policy of the state and regulating economic activity in a respective manner, inter alia, by adopting resolutions, the Government must not act ultra vires; it must observe the Constitution and laws.

Thus, according to the petitioner, after the legal regulation laid down in Items 7.1, 7.8, and 7.9 of the Description of the Procedure for Rendering PISs had categorised as public interest services the additional services not provided for in Paragraph 1 of Article 74 of the Law on Electricity (wording of 17 January 2012) and not provided for, to the specified extent, in Paragraph 1 of Article 20 of the Law on Energy from Renewable Sources, there was a violation of the provisions (pointed out by the petitioner) of the Constitution and laws.

3. In its petition No. 1B-39/2014, the Vilnius Regional Administrative Court, the petitioner, also presents its arguments regarding the compliance of Items 16.3, 16.4, and 17 of the Description of the Procedure for the Administration of Funds Raised from PISs with the Constitution and laws.

In view of the provisions of the Law on Electricity (wording of 17 January 2012) by which electricity customers (understood as subjects who purchase electricity for consumption (Paragraph 48 of Article 2)) must pay for public interest services (Paragraphs 5 and 6 of Article 46, Paragraph 7 of Article 69), the petitioner doubts whether the Government, by approving the Description of the Procedure for the Administration of Funds Raised from PISs, has also reasonably imposed the duty to pay for such services on electricity producers who themselves render the public interest services specified in Items 2 and 3 of Paragraph 1 of Article 74 of the same law. Thus, doubts have arisen over the legal regulation laid down in Items 16.3, 16.4, and 17 of the Description of the Procedure for the Administration of Funds Raised from PISs whereby, according to the petitioner, a certain part of electricity producers are obligated to pay for public interest services while consuming the electricity which they themselves produce and which they do not purchase.

II

1. In the course of the preparation of the case for the hearing of the Constitutional Court, explanations regarding the compliance of the provisions of the Description of the Procedure for Rendering PISs with the Constitution and laws were received from the representatives of the Government, the party concerned—Žana Mekšraitė, chief specialist of the Law Division of the Ministry of Energy of the Republic of Lithuania, and Egidijus Purlys, Head of the Electricity Generation Division of the same ministry (in the part of the case subsequent to petition No. 1B-18/2013), as well as from the representatives of the Government, the party concerned—Ramunė Mikalauskienė, Deputy Head of the Law Division of the Ministry of Energy, Egidijus Purlys, Head of the Electricity Sector Division of the same ministry, and Mindaugas Mikalonis, chief specialist of the same division. It is maintained in the explanations that the impugned legal regulation laid down in the Description of the Procedure for Rendering PISs is (was) not in conflict with the Constitution and with the provisions of the laws as indicated by the petitioner.

1.1. The position of the representatives of the Government, the party concerned—Žana Mekšraitė, chief specialist of the Law Division of the Ministry of Energy, and Egidijus Purlys, Head of the Electricity Generation Division of the same ministry—regarding the compliance of the Description of the Procedure for Rendering PISs with the Constitution and laws (in the part of the case subsequent to petition No. 1B-18/2013) is substantiated by the following main arguments.

1.1.1. The legal regulation valid in the Republic of Lithuania and governing public interest services in the electricity sector is based, among other things, on the requirements of EU law and is subject to continuous development with regard to changes in the EU’s common energy policy and energy law, taking into consideration national interests in the sphere of energy, and upon assessing the good practice of other Member States of the European Union in introducing a similar legal regulation. The legal grounds of public interests in the electricity sector are consolidated at the EU level by Directive 2009/72/EC of the European Parliament and of the Council of 13 July 2009 concerning common rules for the internal market in electricity and repealing Directive 2003/54/EC (hereinafter—also Directive 2009/72/EC), the provisions of which have been transposed respectively to the Republic of Lithuania’s Law on Energy (wording of 22 December 2011), the Law on Electricity (wording of 17 January 2012), and the Law on Renewable Energy Sources.

1.1.2. The Law on Electricity (wording of 17 January 2012) does not contain any final list of public interests in the electricity sector or that of public interest services in the electricity sector. If the relevant provisions of the Law on Electricity (wording of 17 January 2012) (Paragraph 53 (wording of 23 December 2014) of Article 2, Paragraph 1 of Article 74) and those of other laws governing the legal framework for the operation of other energy sectors are interpreted in a systemic manner, the conclusion should be drawn that the Government, while pursuing the objectives and observing the principles and requirements specified in the laws, has the right to define which services are categorised as public interest services.

Paragraph 1 (wording valid prior to 1 February 2013) of Article 20 of the Law on Energy from Renewable Sources provides that electricity generation from renewable energy sources is a public interest service; under Paragraph 2 of Article 20 (wording of 17 January 2013) of the Law on Energy from Renewable Sources, electricity generation from renewable energy sources is promoted by paying, in accordance with the procedure for providing public interest services as laid down by the Government, the difference between the fixed rate established for the respective producer and the price of electricity sold by the same producer in accordance with the procedure laid down by the Government; according to Item 14 of Paragraph 4 of Article 20 (wording of 17 January 2013) of the same law, when the Commission approves the methods of determining the maximum permitted fixed rates and determines these rates for each group of the producers, the costs of balancing the production of electricity, if such costs are provided for, must be assessed in a compulsory manner in addition to other indicators specified by the Commission; Paragraph 1 (wording of 17 January 2013, valid since 1 February 2013) of Article 20 of the Law on Energy from Renewable Sources clearly states that the balancing of electricity generated from renewable energy sources is a public interest service. Thus, in promoting electricity generation from renewable energy sources, and while considering it to be a public interest service, the costs of balancing the production of electricity are unreservedly recognised as justified costs of promoting electricity generation from renewable energy sources and as an inseparable constituent part of the public interest service—electricity generation from renewable energy sources. Therefore, while enjoying the competence, conferred on it by the Law on Electricity (wording of 17 January 2013) and by the Law on Energy from Renewable Sources, to establish the procedure for rendering public interest services, and in order to ensure legal certainty and legal clarity, the Government categorised the service of the balancing of electricity generated from renewable energy sources as part of electricity generation from renewable energy sources.

Since Paragraph 1 of Article 21 of the Law on Energy from Renewable Sources provides that the connection of power plants to the electricity grids is a public interest service, and as Paragraph 9 of the same article provides that the costs of the electricity grid operator related to the optimisation, development, and/or reconstruction of electricity grids are considered a public interest service, the law established the grounds for categorising, as public interest services, the connection of renewable power plants to electricity grids as specified in Item 7.8 of the Description of the Procedure for Rendering PISs, and the optimisation, development, and/or reconstruction of electricity grids carried out by the electricity grid operator in order to ensure the development of electricity generation from renewable sources as pointed out in Item 7.9 of the same Description.

Thus, by approving the list of public interest services by means of the impugned legal regulation, the Government was acting according to the powers conferred on it by laws, within its competence, and without acting ultra vires, therefore, there are no grounds for stating that the provisions of the impugned resolutions are in conflict with the provisions (indicated by the petitioner) of the Constitution and laws.

1.2. In their written explanations in the part of the case subsequent to petition No. 1B-18/2013, the representatives of the Government, the party concerned—Ramunė Mikalauskienė, Deputy Head of the Law Division of the Ministry of Energy, Egidijus Purlys, Head of the Electricity Sector Division of the same ministry, and Mindaugas Mikalonis, chief specialist of the same division—in principle, supported the position set out in the written explanations of the representatives of the Government, the party concerned—Žana Mekšraitė, chief specialist of the Law Division of the Ministry of Energy, and Egidijus Purlys, Head of the Electricity Generation Division of the same ministry—and pointed out that they had set out their additional arguments in the written explanations submitted regarding petition No. 1B-39/2014. The position of the representatives of the Government is substantiated by the following additional arguments.

1.2.1. According to Directive 2009/72/EC, the security of energy supply is an essential element of public security, whilst functioning electricity markets and, in particular, the networks and other assets associated with electricity supply are essential for public security, for the competitiveness of the economy and for the well-being of citizens, therefore, safeguards are necessary regarding the preservation of the security of supply of energy. The objective of guaranteeing adequate investment in the electricity and gas distribution systems is designed to ensure, inter alia, the security of energy supply, an objective which the Court of Justice of the European Union has also recognised as being an overriding reason in the public interest (Paragraph 59 of the judgment of the Court of Justice (Grand Chamber) of 22 October 2013 in case C-105/12–C-107/12 Essent and Others), whereas, according to the distribution of powers established in national law, the national, regional and local authorities of Member States enjoy a broad discretion for defining what they regard as services of general economic interest (Paragraph 215 of the judgment of the Court of First Instance (now known as the General Court) of 15 June 2005 in case T-17/02 Fred Olsen, SA v. the Commission of the European Communities; Paragraph 101 of the judgment of 22 October 2008 in case T-309/04, T-317/04, T 329/04 and T-336/04 TV 2 / Danmark A/S and Others v. the Commission).

1.2.2. Under the Constitution, the Government executes laws (Item 2 of Article 94), therefore, the Government is not allowed to choose which provisions of certain laws must be applied and which may be ignored. On the other hand, Paragraphs 1 and 9 of Article 21, Paragraph 1 of Article 30, Paragraph 3 of Article 32, and Paragraph 7 of Article 36 of the Law on Renewable Energy Sources provide for the public interest services in the electricity sector, however, such services are not stipulated in Paragraph 1 of Article 74 of the Law on Electricity (wording of 17 January 2012).

2. The representatives of the Government, the party concerned—Ramunė Mikalauskienė, Deputy Head of the Law Division of the Ministry of Energy, Egidijus Purlys, Head of the Electricity Sector Division of the same ministry, and Mindaugas Mikalonis, chief specialist of the same division—also presented their explanations (in the part of the case subsequent to petition No. 1B-39/2014) on the compliance of the Description of the Procedure for the Administration of Funds Raised from PISs with the Constitution and laws. It is maintained in the explanations that the impugned legal regulation laid down in the Description of the Procedure for the Administration of Funds Raised from PISs is not in conflict with the Constitution and with the provisions of the laws indicated by the petitioner. The position of the representatives of the party concerned is substantiated by the following main arguments.

2.1. Since the costs of rendering public interest services are included into the public electricity price, therefore, in cases where a certain group of consumers is singled out and excluded from the participation, any attempt to ensure public interest services would entail an additional financial burden, inter alia, for household consumers. If the obligation to pay for public interest services were imposed solely on consumers, but electricity producers who generate electricity and use it on their territory for the economic needs of their own enterprises were released from such an obligation, there would be a noticeable reduction in the amount of the funds collected for public interest services.

2.2. According to the definition of “customer” as consolidated in Paragraph 48 of Article 2 of the Law on Electricity (wording of 17 January 2012), any person, including an electricity producer, who has a technical possibility of purchasing and who purchases electricity from independent electricity suppliers, who uses electricity transmission/distribution grids and/or consumes electricity for his/her needs, is regarded as an electricity customer and must pay the state-regulated price for consumed electricity. In addition, according to the provisions of Paragraphs 1 and 2 of Article 70 of the Law on Electricity (wording of 17 January 2012), both electricity producers and electricity customers, in cases where the latter are connected to neither the transmission system nor distribution grids, i.e. they are persons who receive electricity through a direct line, must pay for public interest services. Thus, the requirement for paying for consumed electricity is applied to all participants of the electricity market.

According to their purpose and their significance for the energy system, public interest services are rendered for the benefit of all economic subjects whose electricity equipment is connected to electricity grids regardless of the actual consumption of electricity from the grids during the relevant period. Public interest services are based on public interests in the electricity sector and on the common good in order to ensure the safe, reliable and smooth functioning of the national energy system. Therefore, in accordance with the principles consolidated in the Law on Energy (wording of 22 December 2011) and the Law on Electricity (wording of 17 January 2012), where the said principles are devised to ensure not the interests of individual groups concerned, but rather public interests in the sphere of energy consumption, the costs of rendering public interest services are distributed, under procedure established by legal acts, among all the subjects consuming electricity.

Thus, the Government has approved the Description of the Procedure for the Administration of Funds Raised from PISs, without violating the competence granted to it—the impugned legal regulation consolidated in the said Description merely sets out in more detail the respective regulation laid down in the law.

III

In the course of the preparation of the case for the hearing of the Constitutional Court, Vygantas Vaitkus, Acting Chair of the National Commission for Energy Control and Prices, submitted his written opinion about certain relevant questions considered in the constitutional justice case at issue.

The Constitutional Court

holds that:

I

1. In its petition No. 1B-18/2013, the Vilnius Regional Administrative Court, the petitioner, requests the Constitutional Court to investigate, among other things, the compliance of Item 7.1 of the Description of the Procedure for Rendering PISs insofar as it provides that public interest services include the balancing of electricity, as well as the compliance of Items 7.8 and 7.9 of the said Description, with, inter alia, Paragraph 1 of Article 20 of the Law on Renewable Energy Sources.

1.1. Item 7 of the Description of the Procedure for Rendering PISs, among other things, prescribes:

7. Public interest services shall include:

7.1. electricity generation from renewable energy sources and balancing such electricity; […]

7.8. the connection of renewable power plants to electricity grids;

7.9. the optimisation, development, and/or reconstruction of electricity grids carried out by the electricity grid operator in order to ensure the development of electricity generation from renewable sources.”

Thus, the legal regulation laid down in Items 7.1, 7.8, and 7.9 of the Description of the Procedure for Rendering PISs has categorised certain services as public interest services in the electricity sector.

1.2. Paragraph 1 (wording valid prior to 1 February 2013) of Article 20 of the Law on Energy from Renewable Sources used to prescribe: “Electricity generation from renewable energy sources shall be a public interest service. The general principles of, procedure for and conditions of the payment of fixed rates applied in accordance with the procedure laid down by this Law and the Government shall be specified by the Government by approving the Description of the Procedure for Rendering Public Interest Services. Electricity generated from renewable energy sources shall be traded under procedure and in the manner provided for in the Rules for Trading Electricity, with the exception of electricity generated in power plants whose installed capacity does not exceed 30 kW where such electricity is purchased for the rate fixed in the manner and procedure prescribed by the Government.”

Thus, Paragraph 1 of Article 20 of the Law on Energy from Renewable Sources, among other things, categorised electricity generation from renewable energy sources as a public interest service.

1.3. When expressing doubts about the compliance, to the specified extent, of the impugned legal regulation consolidated in the Description of the Procedure for Rendering PISs with Paragraph 1 of Article 20 of the Law on Energy from Renewable Sources, the petitioner points out that the said legal regulation lays down an additional public interest service—the balancing of electricity generated from renewable sources, however, such public interest service was provided neither in Paragraph 1 of Article 74 of the Law on Electricity (wording of 17 January 2012), nor in Paragraph 1 (wording valid prior to 1 February 2013) of Article 20 of the Law on Energy from Renewable Sources that used to prescribe that only electricity generation from renewable energy sources was a public interest service.

1.4. In this context, it should be noted that Paragraph 1 of Article 20 of the Law on Energy from Renewable Sources categorised electricity generation from renewable energy sources as a public interest service, however, Item 7.1 of the Description of the Procedure for Rendering PISs categorised, as a public interest service, not only electricity generation from renewable energy sources, but also the balancing of electricity generated from renewable energy sources. The legal regulation laid down in Paragraph 1 of Article 20 of the Law on Energy from Renewable Sources is not devised to regulate the issues related to the services categorised as public interest services by the other impugned items—Items 7.8 and 7.9—of the Description of the Procedure for Rendering PISs.

1.5. Thus, although the petitioner has doubts, to the specified extent, about the compliance of all the specified items—Items 7.1, 7.8, and 7.9—of the Description of the Procedure for Rendering PISs with Paragraph 1 of Article 20 of the Law on Energy from Renewable Sources, the entirety of the arguments submitted by the petitioner makes it clear that it actually only doubts whether Item 7.1 of the Description of the Procedure for Rendering PISs is in compliance to the specified extent with the said paragraph.

It should also be noted that, even though the petitioner has doubts, to the specified extent, about the compliance of Item 7.1 of the Description of the Procedure for Rendering PISs with the entire Paragraph 1 of Article 20 of the Law on Energy from Renewable Sources, however, it actually doubts whether the specified legal regulation is in conflict with the provision “Electricity generation from renewable energy sources shall be a public interest service” of the same paragraph.

1.6. Consequently, taking into consideration the arguments of the petitioner, the Constitutional Court will investigate only the compliance of Item 7.1 of the Description of the Procedure for Rendering PISs insofar as it prescribes that the balancing of electricity generated from renewable sources is a public interest service with the provision “Electricity generation from renewable energy sources shall be a public interest service” of Paragraph 1 of Article 20 of the Law on Energy from Renewable Sources.

2. In its petition No. 1B-39/2014, the Vilnius Regional Administrative Court, the petitioner, requests an investigation into, inter alia, the compliance of Items 16.3, 16.4, and 17 of the Description of the Procedure for the Administration of Funds Raised from PISs with the provisions (specified by the petitioner) of the Constitution and laws.

2.1. Item 16 of the Description of the Procedure for the Administration of Funds Raised from PISs lays down the procedure for collecting funds for public interest services. The said item, among other things, prescribed:

16.3. The persons who use the electricity produced by them for their economic needs, except for persons specified in Item 16.4 of the Description, shall pay the operator of the electricity grids to which their electricity generation equipment is connected for the services specified in Items 7.1–7.9 of the Description for the Procedure for Rendering Services for the actual amount of the electricity used for economic needs both by them and by persons who receive electricity from the aforesaid persons through a direct line.

16.4. The persons who, for their economic needs, use the electricity produced by them through the use of cogeneration (in combined power and heat generation plants) shall pay the operator of the electricity grids to which their electricity generation equipment is connected for the services specified in Items 7.1 and 7.4–7.9 of the Description for the Procedure for Rendering Services for the actual amount of the electricity generated through the use of cogeneration (in combined power and heat generation plants) and used for economic needs both by them and by persons who receive electricity from the former persons through a direct line.”

Thus, Item 16.3 of the Description of the Procedure for the Administration of Funds Raised from PISs lays down a legal regulation of general scope whereby all the persons who use the electricity produced by them for their economic needs must pay for public interest services, whereas Item 16.4 of the said Description consolidates special provisions governing the procedure of paying the funds for public interest services where such provisions apply only to the persons who, for their economic needs, use the electricity produced by them through the use of cogeneration (in combined power and heat generation plants) .

2.1.1. It is clear from the petition submitted by the Vilnius Regional Administrative Court and the attached material of the administrative case considered by it, the claimants in the said administrative case are persons who, for their economic needs, use the electricity produced by them in combined power and heat generation plants. Therefore, the procedure established in Item 16.4 of the Description of the Procedure for the Administration of Funds Raised from PISs applies precisely to the said persons.

Thus, although the petitioner also requests an investigation into the compliance of the legal regulation laid down in Item 16.3 of the Description of the Procedure for the Administration of Funds Raised from PISs with the Constitution and laws, it is clear both from the arguments given by the Vilnius Regional Administrative Court and from the entirety of the attached material of the administrative case considered by it that the petitioner impugns only the legal regulation that governs the payment for public interest services and is applied only to the persons who, for their economic needs, use the electricity produced by them through the use of cogeneration (in combined power and heat generation plants), i.e. it impugns the compliance of the legal regulation laid down in Item 16.4 of the Description of the Procedure for the Administration of Funds Raised from PISs with the Constitution and laws.

2.1.2. It is also clear from the petition submitted by the Vilnius Regional Administrative Court and the attached material of the administrative case considered by it that the claimants in the said administrative case, who are electricity producers operating in the Republic of Lithuania, not only hold permits to produce electricity in combined heat and power plants, use the electricity produced by them for their economic needs, or supply it for the economic needs of legal persons situated on their territory, but also, as free customers (i.e. customers entitled under procedure established by law to freely choose the electricity supplier), the said claimants purchase the required electricity from independent electricity suppliers.

Article 2 “Definitions” of the Law on Electricity (wording of 17 January 2012) defines an independent supplier as a person supplying electricity to customers and entitled to engage in an independent electricity supply activity (Paragraph 28). The same article defines a customer as a person whose equipment is connected to either the transmission or distribution grids, or to a direct line, and who purchases electricity for consumption (Paragraph 48).

Thus, the claimants in the aforementioned administrative case are producers of electricity. However, from the standpoint of both rendering public interest services in the electricity sector and administering the funds for such services, in view of the fact that their equipment is connected either to a certain grid and, as a result of this, they have the possibility of purchasing electricity on a stable basis from an independent supplier, they are also customers.

As mentioned before, the special provisions governing the procedure of paying the funds for public interest services laid down in Item 16.4 of the Description of the Procedure for the Administration of Funds Raised from PISs apply only to the persons who, for their economic needs, use the electricity produced by them namely through the use of cogeneration (in combined power and heat generation plants).

The claimants in the administrative case considered by the Vilnius Regional Administrative Court, the petitioner, are persons who fall within the scope of Item 16.4 of the Description of the Procedure for the Administration of Funds Raised from PISs. The respective equipment of the said persons is connected to the grid of an independent supplier when they produce electricity through the use of cogeneration (in combined power and heat generation plants), required for their economic needs. The said persons have the possibility of purchasing electricity on a stable basis from an independent supplier, i.e. they are customers at the same time. Therefore, subsequent to the petition of the petitioner, the Constitutional Court will investigate the compliance of Item 16.4 of the Description of the Procedure for the Administration of Funds Raised from PISs with the Constitution and laws insofar as the funds for the specified public interest services must be paid by those persons who, for their economic needs, use the electricity produced by them through the use of cogeneration (in combined heat and power generation plants) and, at the same time, are electricity customers.

2.2. In this context, it should be noted that the Government Resolution (No. 1002) “On Amending the Resolution of the Government of the Republic of Lithuania (No. 1157) ‘On the Approval of the Description of the Procedure for the Administration of Funds Raised from Public Interest Services in the Electricity Sector’ of 19 September 2012” of 16 September 2015 amended the Government Resolution (No. 1157) “On the Approval of the Description of the Procedure for the Administration of Funds Raised from Public Interest Services in the Electricity Sector” of 19 September 2012, inter alia, it amended Item 16 (a certain part whereof is impugned in the constitutional justice case at issue; the amendments came into force on 1 October 2015) of the Description of the Procedure for the Administration of Funds Raised from PISs approved by the latter government resolution.

The legal regulation laid down in Item 16 (wording of 16 September 2015) of the Description of the Procedure for the Administration of Funds Raised from PISs is not a matter for an investigation in the constitutional justice case at issue, even though the said legal regulation, compared with that established in the impugned Item 16 of the Description of the Procedure for the Administration of Funds Raised from PISs, has virtually remained intact from the aspect relevant for the constitutional justice case at issue (i.e. insofar as the funds for the specified public interest services must be paid by those persons who, for their economic needs, use the electricity produced by them through the use of cogeneration (in combined heat and power generation plants) and, at the same time, are electricity customers).

2.3. Item 17 of the Description of the Procedure for the Administration of Funds Raised from PISs prescribed: “Persons who use electricity for their economic needs shall pay the price, set by the Commission, for public interest services on the basis of both the amount of electricity used from the electricity grids and the amount of electricity that is produced by such persons themselves and is used for either their economic needs or for the economic needs of the persons connected to their local (internal) grids by a direct line where the said amount is calculated either on the basis of the readings of electricity meters or under procedure established in Item 15 of the Description.”

Thus, Item 17 of the Description of the Procedure for the Administration of Funds Raised from PISs establishes the procedure of calculating the funds to be paid for public interest services by persons who use electricity for economic needs.

As mentioned before, the petitioner impugns the compliance of the provisions of the Description of the Procedure for the Administration of Funds Raised from PISs, inter alia, the compliance of Item 17 thereof, with the Constitution and laws due to the fact that, according to the petitioner, the duty to pay for public interest services is also imposed on electricity producers. The petitioner maintains that electricity producers must pay for the electricity which they themselves produce and which they do not purchase.

It should be noted that the legal regulation laid down in Item 17 of the Description of the Procedure for the Administration of Funds Raised from PISs does not impose any concrete obligations on persons who, for their economic needs, use the electricity produced by them, inter alia, produced by them through the use of cogeneration (in combined heat and power generation plants), to pay for public interest services: the said legal regulation merely sets out in more detail the calculation of the funds to be paid for public interest services, inter alia, according to the provisions of Item 16.4 of the said Description, by persons who use electricity for their economic needs.

Thus, although the petitioner also requests an investigation into the compliance, with the Constitution and laws, of Item 17 of the Description of the Procedure for the Administration of Funds Raised from PISs which consolidates the procedure of paying the funds for public interest services that is applied to all the persons who use electricity for their economic needs, it is clear from the arguments presented in the petition and from the entirety of the material of the administrative case considered by the Vilnius Regional Administrative Court that, while disagreeing that the persons who, for their economic needs, use the electricity produced by them through the use of cogeneration (in combined heat and power generation plants) should be obligated to pay for public interest services, the petitioner impugns not the procedure of calculating the funds to be paid for public interest services, where the said procedure is established in Item 17 of the Description of the Procedure for the Administration of Funds Raised from PISs, but rather the special provisions which are laid down in Item 16.4 of the same Description and govern the procedure of paying the funds for public interest services and which obligate the aforesaid persons to pay for the said services.

2.4. Thus, the entirety of the arguments presented in the petition and the material of the administrative case considered by the Vilnius Regional Administrative Court make it clear that, although the petitioner requests an investigation into the compliance of Items 16.3, 16.4, and 17 of the Description of the Procedure for the Administration of Funds Raised from PISs with the Constitution and laws, the petitioner actually doubts whether Item 16.4 of the said Description is in compliance with the Constitution and laws insofar as the funds for the specified public interest services must be paid by those persons who, for their economic needs, use the electricity produced by them through the use of cogeneration (in combined heat and power generation plants) and, at the same time, are electricity customers.

3. The Vilnius Regional Administrative Court, the petitioner, among other things, requests (petition No. 1B-39/2014) an investigation into the compliance of the specified items of the Description of the Procedure for Rendering PISs and the Description of the Procedure for Rendering PISs with the constitutional principle of the separation of powers.

The arguments presented in the petitions make it clear that the petitioner virtually substantiates its request by the fact that the Government, when laying down the impugned legal regulation, allegedly failed to execute laws.

Paragraph 2 of Article 5 of the Constitution prescribes: “The scope of power shall be limited by the Constitution.”

When interpreting this provision, the Constitutional Court has noted that it also reflects, inter alia, the constitutional principle of the separation of powers. The Constitutional Court has held on more than one occasion that, if the legal regulation laid down in government resolutions competed with that laid down in laws or were not based on laws, there would be a violation of Paragraph 2 of Article 5 of the Constitution which provides that the scope of power is limited by the Constitution.

Thus, the petition requesting an investigation into the compliance of the specified items of the Description of the Procedure for Rendering PISs and the Description of the Procedure for the Administration of Funds Raised from PISs with the constitutional principle of the separation of powers should be treated as a petition requesting an investigation into the compliance of the respective impugned legal regulation with Paragraph 2 of Article 5 of the Constitution.

4. The Vilnius Regional Administrative Court, the petitioner, also requests an investigation into the compliance of the specified items of both the Description of the Procedure for Rendering PISs and the Description of the Procedure for the Administration of Funds Raised from PISs with Item 2 (request contained only in petition No. 1B-39/2014) and Item 7 of Article 94 of the Constitution.

Article 94 of the Constitution prescribes, inter alia, that the Government of the Republic of Lithuania shall execute laws, the resolutions of the Seimas on the implementation of laws, as well as the decrees of the President of the Republic (Item 2), and shall discharge other duties prescribed to the Government by the Constitution and other laws (Item 7).

The doubts of the petitioner about the compliance of the impugned legal regulation with the Constitution and laws are based exclusively on the fact that, when exercising its competence to establish a list of public interest services and to define the persons who must pay for public interest services, the Government has failed to observe the respective provisions of laws. Thus, the petitioner virtually states that the Government has failed to execute laws or executed them in an improper manner, i.e. that it has violated the requirements arising from Item 2 of Article 94 of the Constitution, but not from Item 7 of the same article.

Therefore, the petition requesting an investigation into the compliance of the specified items of both the Description of the Procedure for Rendering PISs and the Description of the Procedure for the Administration of Funds Raised from PISs with Items 2 and 7 of Article 94 of the Constitution should be treated as a petition requesting an investigation into their compliance with only Item 2 of the same article.

5. Consequently, taking account of the petitions of the Vilnius Regional Administrative Court, the petitioner, in the constitutional justice case at issue, the Constitutional Court will investigate:

whether Item 7.1 of the Description of the Procedure for Rendering PISs insofar as it prescribes that the balancing of electricity generated from renewable sources is a public interest service, as well as whether Items 7.8 and 7.9 of the same Description, are in conflict with Paragraph 2 of Article 5 and Item 2 of Article 94 of the Constitution, with the constitutional principle of a state under the rule of law, as well as with Paragraphs 1 and 2 of Article 74 of the Law on Electricity (wording of 17 January 2012), and whether, to the specified extent, Item 7.1 of the same Description was in conflict with the provision “Electricity generation from renewable energy sources shall be a public interest service” of Paragraph 1 of Article 20 of the Law on Energy from Renewable Sources;

whether Item 16.4 of the Description of the Procedure for the Administration of Funds Raised from PISs insofar as the funds for the specified public interest services must be paid by those persons who, for their economic needs, use the electricity produced by them through the use of cogeneration (in combined heat and power generation plants) and, at the same time, are electricity customers was in conflict with Paragraph 2 of Article 5 and Item 2 of Article 94 of the Constitution, with the constitutional principle of a state under the rule of law, and with Paragraph 48 of Article 2 and Paragraphs 5 and 6 of Article 46 of the Law on Electricity (wording of 17 January 2012).

II

1. It has been mentioned that, in the constitutional justice case at issue, the Constitutional Court, inter alia, is investigating, to the specified extent, the compliance of Items 7.1, 7.8, and 7.9 of the Description of the Procedure for Rendering PISs with the Constitution and laws where the said items categorise certain services as public interest services in the electricity sector.

2. In this context, it is first of all important to reveal the legal regulation consolidated in the Law on Electricity (wording of 17 January 2012) from the aspect relevant in the constitutional justice case at issue, insofar as the said regulation is related to the powers to establish a list of public interest services in the electricity sector.

2.1. In the context of the constitutional justice case at issue, mention should be made of the following provisions of the Law on Electricity (wording of 17 January 2012) which consolidate, among other things, the requirements to be followed in establishing a list of public interest services in the electricity sector:

this law establishes the legislative framework for the organisation of public management, regulation, supervision and control of activities in the electricity sector of the Republic of Lithuania and for the organisation of activities in the electricity sector (Paragraph 1 of Article 1); the main aims of this law are, among other things, to ensure safe and reliable operation of the electricity system, electricity generation, transmission, distribution and supply, as well as to establish the legal framework for public interest services and reasonable, clear and transparent requirements and obligations in the electricity sector (Items 1 and 9 of Article 3);

the Government approves a list of public interest services and determines the procedure for their provision (Item 5 of Paragraph 1 of Article 6);

– “public interest services” means services provided by enterprises, where the list, providers, and provision procedure whereof are approved by the Government or an institution authorised by it, taking account of the general requirements established in Article 74 of this law and public interests in the electricity sector (Paragraph 53 (wording of 23 December 2014) of Article 2);

in order to implement the strategic objectives of the energy, economic and environmental protection policies of the state in the electricity sector and to ensure the implementation of the interests of the public, the Government, pursuant to the provisions of the laws governing the legal framework for the operation of this and other energy sectors, may stipulate that the following is categorised as public interest services in the electricity sector: electricity generation from renewable energy sources; electricity generation through the use of cogeneration in combined power and heat generation plants when these power plants supply heat to heat supply systems and where such amount of primary energy is saved that combined heat and power generation may be considered to be effective; electricity generation in the specified power plants where electricity generation is necessary in order to ensure the security of the supply of electricity; the ensuring of reserves in the electricity system in the specified power plants, the operation of which is necessary in order to ensure national energy security; the expansion of electricity generation capacities which are strategically important in order to ensure the security and reliability of the operation of the electricity system or national energy independence; the implementation of strategic projects in the electricity sector which are related to the enhancement of energy security, by providing interconnections with the electricity systems of other states and/or by connecting the electricity systems of the Republic of Lithuania with the electricity systems of other Member States; the activities of ensuring the security of the operation of energy installations and the activities of radioactive waste management (Paragraph 1 of Article 74); the Government approves, solely in accordance with the provisions of Paragraph 1 of this article, a list of public interest services in the electricity sector and establishes the procedure for providing these services (Paragraph 2 of Article 74); when approving the list of public interest services in the electricity sector and establishing the obligations to provide public interest services, the criteria of economic rationale and the lowest cost and impact on the price of electricity for end-users must be followed (Paragraph 5 of Article 74);

– “public interests in the electricity sector” means any act or inaction in the electricity sector, directly or indirectly related to national energy security and/or public security, to the security and reliability of the operation of the electricity system, to the reduction of the negative environmental impact caused by the electricity sector, to the diversification of energy resources, or to other objectives of the sustainable development of the electricity sector which are provided for in this law (Paragraph 52 (wording of 23 December 2014) of Article 2).

2.2. Thus, the legal regulation laid down in Item 5 of Paragraph 1 of Article 6 as well as in Paragraphs 1 and 2 of Article 74 of the Law on Electricity (wording of 17 January 2012) grants the powers to the Government to establish, inter alia, a list of public interest services and the procedure for providing such services. In addition, the same law (Paragraph 53 (wording of 23 December 2014) of Article 2, Paragraphs 1, 2, and 5 of Article 74) consolidates the requirements to be followed by the Government when it implements the powers conferred on it by law to establish, inter alia, a list of public interests, i.e. it contains the stipulation that, while establishing the said list, the Government should comply with the general requirements laid down in the law and should act in view of public interests in the electricity sector.

The aforesaid general requirements laid down in Article 74 of the Law on Electricity (wording of 17 January 2012) which must be complied with in the course of establishing a list of public interest services in the electricity sector are as follows:

the requirement that, in the course of establishing the said list the aims defined in the law—the pursuit of implementing the strategic objectives of the energy, economic and environmental protection policies of the state in the electricity sector—should be fulfilled;

the requirement that a list of public interest services should be established only on the basis of the provisions of the legal acts—the Law on Electricity and the other laws governing the legal framework for activities in the energy sectors—as specified in the law;

the requirement that, when the Government categorises certain services as public interest services in the electricity sector, it should follow the criteria (defined in the law) of economic rationale and the lowest cost and impact on the price of electricity for end-users.

As mentioned before, Paragraph 53 (wording of 23 December 2014) of Article 2 of the Law on Electricity (wording of 17 January 2012) also contains the requirement for acting in view of public interests in the electricity sector in the course of establishing a list of public interest services in the same sector; this means that, when establishing the said list, the Government is under the obligation to take into consideration the fact whether the respective act or inaction in the electricity sector is directly or indirectly related to national energy security and/or public security, to the security and reliability of the operation of the electricity system, to the reduction of the negative environmental impact caused by the electricity sector, to the diversification of energy resources, or to other objectives of the sustainable development of the electricity sector which are provided for in this law.

2.3. Paragraph 1 of Article 74 of the Law on Electricity (wording of 17 January 2012) also points out the services which, when the Government establishes a list of public interest services in the electricity sector in conformity with the aforesaid general requirements and in view of public interests in the electricity sector, inter alia, might be categorised as public interest services.

2.4. In this context, it should be noted that, even though the legal regulation on organising the activity in the electricity sector as laid down in the Law on Electricity (wording of 17 January 2012) has been amended and/or supplemented on more than one occasion, there have been no changes, inter alia, in the legal regulation that is relevant in the constitutional justice case at issue and governs public interest services in the electricity sector insofar as the said legal regulation granted the powers to the Government to establish a list of public interest services and consolidated the requirements to be followed in the course of establishing such a list.

3. On 18 July 2012, the Government adopted the Resolution No. 916 “On the Approval of the Description of the Procedure for Rendering Public Interest Services in the Electricity Sector” (hereinafter—also Resolution No. 916) whereby it approved the Description of the Procedure for Rendering PISs, inter alia, the provisions whereof which are impugned in the constitutional justice case at issue.

It is clear from the Preamble (wording of 16 September 2015) to Resolution No. 916 that this resolution was adopted by invoking, inter alia, Item 5 of Paragraph 1 of Article 6 and Paragraph 2 of Article 74 of the Law on Electricity (wording of 17 January 2012); the Description approved by the said resolution establishes a list of public interest services in the electricity sector, the procedure for rendering such services, the obligations to provide such services, and the procedure for compensating the rendition of such services (Item 1 of the Description of the Procedure for Rendering PISs).

Item 7 of the Description of the Procedure for Rendering PISs, the compliance of which with the Constitution and laws, among other things, to the specified extent, is being investigated in the constitutional justice case at issue, prescribes:

7. Public interest services shall include:

7.1. electricity generation from renewable energy sources and balancing such electricity;

7.2. electricity generation through the use of cogeneration in combined power and heat generation plants when these power plants supply heat to heat supply systems and where such amount of primary energy is saved that combined heat and power generation may be considered to be effective;

7.3. electricity generation in the specified power plants where electricity generation is necessary in order to ensure the security of the supply of electricity;

7.4. the ensuring of reserves in the electricity system in the specified power plants, the operation of which is necessary in order to ensure national energy security;

7.5. the expansion of electricity generation capacities which are strategically important in order to ensure the security and reliability of the operation of the electricity system or national energy independence;

7.6. the implementation of strategic projects in the electricity sector which are related to the enhancement of energy security, by providing interconnections with the electricity systems of other states and/or by connecting the electricity systems of the Republic of Lithuania with the electricity systems of other Member States;

7.7. the activities of ensuring the security of the operation of energy installations and the activities of radioactive waste management;

7.8. the connection of renewable power plants to electricity grids;

7.9. the optimisation, development, and/or reconstruction of electricity grids carried out by the electricity grid operator in order to ensure the development of electricity generation from renewable sources.”

Thus, the aforesaid legal regulation establishes the list of public interest services in the electricity sector.

3.1. In the context of the constitutional justice case at issue, it should be noted that the list of public interest services in the electricity sector as established in Item 7 of the Description of the Procedure for Rendering PISs differs from that established in Paragraph 1 of Article 74 of the Law on Electricity (wording of 17 January 2012). The Description of the Procedure for Rendering PISs, compared with the respective legal regulation laid down in the said law, established additional services categorised as public interest services in the electricity sector: Item 7.1 of the same Description categorises not only electricity generation from renewable sources, but also balancing such electricity as a public interest service; Item 7.8 thereof categorises the connection of renewable power plants to electricity grids as a public interest service, and Item 7.9 thereof indicates that the optimisation, development, and/or reconstruction of electricity grids carried out by the electricity grid operator in order to ensure the development of electricity generation from renewable sources is also categorised as a public interest service.

3.2. In this context, it should be noted that, as mentioned before, the list of public interest services may be established only while observing the provisions of the Law on Electricity (wording of 17 January 2012) and the other laws governing the legal framework for the operation of energy sectors.

It should also be noted that the concepts used in the Description of the Procedure for Rendering PISs are defined in the Law on Electricity (wording of 17 January 2012), in the Law on Renewable Energy Sources, and in the legal acts implementing the said laws (Item 6 (wording of 16 September 2015) of the Description of the Procedure for Rendering PISs).

Therefore, when investigating, in the constitutional justice case at issue, the compliance of the impugned legal regulation laid down in the individual items of the Description of the Procedure for Rendering PISs with the Constitution and laws, the Constitutional Court must also additionally mention the related relevant provisions of the Law on Electricity (wording of 17 January 2012) and those of the Law on Renewable Energy Sources.

3.2.1. In view of the fact that the impugned legal regulation categorises, inter alia, the balancing of electricity generated from renewable energy sources (Item 7.1 of the Description of the Procedure for Rendering PISs) as a public interest service, the following provisions of legal acts should be mentioned (such provisions are related, among other things, with the balancing of electricity generated, inter alia, from renewable energy sources):

– “national balancing function” means ensuring the balance between electricity generation and consumption according to the criteria of system safety and reliability, as well as the qualitative criteria of electricity at the electricity system level (Paragraph 27 (wording of 23 December 2014) of Article 2 of the Law on Electricity (wording of 17 January 2012));

– “balancing energy” means electricity which is consumed/not consumed or generated/not generated in derogation from the quantities of electricity planned in the schedules drawn up by the suppliers of balancing energy while adhering to the procedure and conditions of the Rules for Trading Electricity approved by the Ministry of Energy of the Republic of Lithuania (Paragraph 1 of Article 2 of the Law on Electricity (wording of 17 January 2012)).

Thus, according to the established legal regulation, ensuring the balancing between electricity supply and demand, inter alia, the balancing of electricity generated from renewable energy sources, is a part of the national balancing function which, among other things, is aimed at ensuring the balance between electricity supply and demand according to the criteria of system safety and reliability at the electricity system level; therefore, at the electricity system level, the balancing of electricity generated, inter alia, from renewable energy sources is inseparably related, inter alia, to the production of electricity.

3.2.2. In view of the fact that the impugned legal regulation categorises, among other things, the connection of renewable power plants to electricity grids as a public interest service (Item 7.8 of the Description of the Procedure for Rendering PISs), the following provisions of the Law on Renewable Energy Sources should be mentioned:

this law establishes the legislative framework for the organisation of public management, regulation, supervision and control of the renewable energy sector of the Republic of Lithuania and for the organisation of activities in the renewable energy sector (Paragraph 1 of Article 1);

– “power plant” means an energy facility managed by the electricity producer by right of ownership or another right where such a facility is intended for the production of either electricity or electricity and heat by cogeneration from renewable sources, consists of one or more technologically interconnected installations for electricity production, and is connected to electricity grids (Paragraph 14 of Article 2);

the connection of power plants to electricity grids is a public interest service (Paragraph 1 of Article 21).

Thus, according to the aforesaid legal regulation, the Law on Renewable Energy Sources consolidates the connection of renewable power plants to electricity grids as a public interest service.

3.2.3. In view of the fact that the impugned legal regulation, among other things, categorises, as a public interest service, the optimisation, development, and/or reconstruction of electricity grids carried out by the electricity grid operator in order to ensure the development of electricity generation from renewable sources (Item 7.9 of the Description of the Procedure for Rendering PISs), the following provisions of legal acts should be mentioned (such provisions are related, among other things, to promoting the development of renewable energy sources, inter alia, to the use of such sources for electricity generation):

the development of the use of renewable energy sources for electricity production is one of the strategic goals of state energy policy (Paragraph 1 of Article 13 of the Law on Renewable Energy Sources); the promotion of the development of the use of effective smart grid technologies and renewable sources in the electricity sector is among the general principles of public management, regulation, supervision and control of activities in the electricity sector (Item 6 of Article 4 of the Law on Electricity (wording of 17 January 2012));

the use of renewable energy sources is promoted in accordance with the procedure and under the terms and conditions specified by the Law on Renewable Energy Sources and other legal acts, inter alia, by reimbursing the costs of connecting installations that use renewable energy to energy grids or systems, and by ensuring the reservation of the capacity and transfer capability or other relevant technical parameters of energy grids or systems in order to connect installations that use renewable energy (Paragraph 1 and Items 3 and 4 of Paragraph 2 of Article 3 of the Law on Renewable Energy Sources); the use of renewable energy sources is promoted in accordance with the procedure and under the terms and conditions specified by the Law on Renewable Energy Sources and by other legal acts (Paragraph 2 of Article 13 of the Law on Renewable Energy Sources);

the electricity grid operator must also connect the producer’s power plant to electricity grids, among other things, in cases where such connection is possible only upon upgrading the electricity grids, optimising them, expanding the electricity grids, increasing the capacity of the electricity grids or reconstructing them otherwise (Paragraph 2 of Article 14 of the Law on Renewable Energy Sources); the connection of power plants to electricity grids is a public interest service (Paragraph 1 of Article 21 of the Law on Renewable Energy Sources); the reimbursable costs incurred by the electricity grid operator due to the optimisation, development, and/or reconstruction of electricity grids are considered a public interest service in the part which is necessary in order to ensure the development of renewable energy sources and is approved by the National Commission for Energy Control and Prices in accordance with the procedure laid down by legal acts (Paragraphs 8 and 9 of Article 21 of the Law on Renewable Energy Sources).

To sum up the aforesaid legal regulation consolidated, inter alia, in the provisions of the laws governing the legal framework for activities in the energy sectors, it should be noted that the development of the use of renewable energy sources for electricity production is among the strategic aims of state energy policy. Such an aim is fulfilled, among other things, by reimbursing the costs of connecting installations that use renewable energy to energy grids, and by establishing the duty of the electricity grid operator to connect the equipment specified in the law to electricity grids, inter alia, in cases where such connection is possible only upon upgrading the electricity grids, optimising them, expanding the electricity grids, increasing the capacity of the electricity grids or reconstructing them otherwise; the connection of power plants to electricity grids and the reimbursable costs incurred by the electricity grid operator due to the optimisation, development, and/or reconstruction of electricity grids in the part which is necessary in order to ensure the development of renewable energy sources and is approved by the established procedure are public interest services.

4. As mentioned before, in the constitutional justice case at issue, the Constitutional Court is investigating the compliance of Item 7.1 of the Description of the Procedure for Rendering PISs, among other things, with the provision “Electricity generation from renewable energy sources shall be a public interest service” of Paragraph 1 of Article 20 of the Law on Energy from Renewable Sources.

4.1. The Law on Energy from Renewable Sources, which was adopted by the Seimas on 12 May 2011 and came into force (with certain exceptions) on 24 May 2011, laid down the legislative framework for the organisation of public management, regulation, supervision and control of the renewable energy sector, and for the organisation of activities in the renewable energy sector, as well as stipulated the state regulation and supervision of operations of energy grid operators, producers of energy from renewable sources and their relations with controlling authorities (Paragraph 1 of Article 1).

Paragraph 1 of Article 20 “The Promotion of the Use of Renewable Energy Sources for the Production of Electricity” of the Law on Energy from Renewable Sources, among other things, prescribed: “Electricity generation from renewable energy sources shall be a public interest service.”

Thus, this legal regulation categorised only electricity generation from renewable energy sources as a public interest service.

4.2. The Law on Energy from Renewable Sources has been amended and/or supplemented on more than one occasion, inter alia, by the Law Amending and Supplementing Articles 2, 11, 13, 14, 16, 20, and 21 of the Law on Energy from Renewable Sources, which was adopted by the Seimas on 17 January 2013 and came into force (with a certain exception) on 1 February 2013.

By Article 6 of the latter law, Article 20 of the Law on Energy from Renewable Sources was amended and reworded. Paragraph 1 of said Article 20, among other things, prescribes: “Electricity generation from renewable energy sources together with balancing such electricity shall be a public interest service.”

Thus, Paragraph 1 of Article 20 (wording of 17 January 2013) of the Law on Energy from Renewable Sources categorised as a public interest service not only electricity generation from renewable energy sources, but also the balancing of electricity generated from renewable energy sources.

In this context, it should be noted that, although the Law on Energy from Renewable Sources, as well as Article 20 (wording of 17 January 2013) thereof, has been amended and/or supplemented on more than one occasion, the legal regulation insofar as it categorised balancing such electricity as a public interest service has remained unchanged.

5. It has been mentioned that, in the constitutional justice case at issue, the Constitutional Court is also investigating the compliance of Item 16.4 of the Description of the Procedure for the Administration of Funds Raised from PISs with the Constitution and laws.

6. In this context, first of all, mention should be made of the provisions of Item 7 of Paragraph 1 of Article 6 “The Functions of the Government or an Institution Authorised by It in the Electricity Sector” of the Law on Electricity (wording of 17 January 2012), according to which the Government must approve the Description of the Procedure for the Administration of Funds Raised from Public Interest Services.

Thus, by this legal regulation, the Government is granted the powers to approve the Description of the Procedure for the Administration of Funds Raised from Public Interest Services.

7. When implementing, inter alia, the aforesaid provisions of the Law on Electricity (wording of 17 January 2012), by its Resolution (No. 1157) “On the Approval of the Description of the Procedure for the Administration of Funds Raised from Public Interest Services in the Electricity Sector” of 19 September 2012, the Government approved the Description of the Procedure for the Administration of Funds Raised from PISs, which came into force on 30 September 2012.

7.1. The said Description lays down the procedure for the administration of funds raised from public interest services in the electricity sector, the procedure for submitting data and bills to be paid for public interest services, the requirements for collecting, paying, and accounting for funds paid for public interest services, and the procedure for appointing the administrator of funds raised from public interest services (Item 1). The provisions of this Description apply to the administrator of funds raised from public interest services, the operator of the transmission system, the operators of distribution grids, the recipients of funds for public interest services, and persons who use electricity for private needs, for the needs of their family and/or for economic-commercial needs (Item 2 (wording of 19 December 2012)).

7.2. In order to regulate the procedure for raising funds for public interest services, Item 16.4 of the Description of the Procedure for the Administration of Funds Raised from PISs, the compliance of which with the Constitution and laws is being investigated in the constitutional justice case at issue, prescribed: “The persons who, for their economic needs, use the electricity produced by them through the use of cogeneration (in combined power and heat generation plants) shall pay the operator of the electricity grids to which their electricity generation equipment is connected for the services specified in Items 7.1 and 7.4–7.9 of the Description for the Procedure for Rendering Services for the actual amount of the electricity generated through the use of cogeneration (in combined power and heat generation plants) and used for economic needs both by them and by persons who receive electricity from the former persons through a direct line.”

Thus, Item 16.4 of the Description of the Procedure for the Administration of Funds Raised from PISs laid down the procedure of paying the funds for public interest services applicable to the persons who, for their economic needs, use the electricity produced by them through the use of cogeneration (in combined power and heat generation plants) and whose electricity generation equipment is connected to the respective electricity grids. According to the said procedure, funds for the respective public interest services are paid to the operator of the electricity grids to which the electricity generation equipment of the respective persons is connected.

Under Item 17 of the Description of the Procedure for the Administration of Funds Raised from PISs, persons who use electricity for their economic needs pay the price, set by the Commission, for public interest services on the basis of the amount of the electricity that is produced by such persons themselves and is used for either their economic needs or for the economic needs of the persons connected to their local (internal) grids by a direct line.

7.3. When interpreting the provisions of Item 16.4 of the Description of the Procedure for the Administration of Funds Raised from PISs, and when taking into consideration the legal regulation laid down in Item 7 of the Description of the Procedure for the Administration of Funds Raised from PISs, it should also be noted that funds are collected under procedure established in the impugned Item 16.4 of the Description of the Procedure for the Administration of Funds Raised from PISs for all the public interest services as specified in the Description of the Procedure for Rendering PISs with the exception of electricity generation through the use of cogeneration in combined power and heat generation plants when these power plants supply heat to heat supply systems and where such amount of primary energy is saved that combined heat and power generation may be considered to be effective (the service laid down in Item 7.2 of the Description of the Procedure for Rendering PISs) and electricity generation in the specified power plants where electricity generation is necessary in order to ensure the security of the supply of electricity (the service laid down in Item 7.3 of the Description of the Procedure for Rendering PISs).

According to Item 21 of the Description of the Procedure for Rendering PISs, no funds for compensating the public interest services specified in Items 7.2 and 7.3 of this Description are collected from persons for electricity generated by them through the use of cogeneration (in combined power and heat generation plants) and for such electricity used by the said persons (including electricity used by persons who receive it by a direct line).

Thus, the legal regulation laid down in Item 16.4 of the Description of the Procedure for the Administration of Funds Raised from PISs does not impose the duty of paying for all the public interest services on the persons who, for their economic needs, use the electricity produced by them through the use of cogeneration (in combined power and heat generation plants) and whose electricity generation equipment is connected to the respective electricity grids: inter alia, taking into account the amount of electricity used by such persons where such electricity is produced by them through the use of the aforesaid method, no funds are collected from them in order to reimburse such public interest services as electricity generation through the use of cogeneration in combined power and heat generation plants when these power plants supply heat to heat supply systems and where such amount of primary energy is saved that combined heat and power generation may be considered to be effective, and no such funds are collected for electricity generation in the specified power plants where electricity generation is necessary in order to ensure the security of the supply of electricity.

7.4. As mentioned before, Item 16 of the Description of the Procedure for the Administration of Funds Raised from PISs, a part of which is impugned in the constitutional justice case at issue, has been amended (the amendments came into force as from 1 October 2015); the legal regulation laid down in Item 16 (wording of 16 September 2015) of the Description of the Procedure for the Administration of Funds Raised from PISs is not a matter for an investigation in the constitutional justice case at issue.

8. In this context, when investigating the compliance of the legal regulation laid down in the Description of the Procedure for the Administration of Funds Raised from PISs with the specified provisions of the Law on Electricity (wording of 17 January 2012), it should be pointed out that the said provisions are as follows:

– “customer” means a person whose equipment is connected to the transmission or distribution grids or a direct line and who purchases electricity for consumption (Paragraph 48 of Article 2);

when purchasing electricity from the independent supplier, customers whose equipment is connected to the distribution grids must pay to the distribution system operator for electricity transmission through transmission and distribution grids as well as for system services and public interest services; having received the consent of the distribution grid operator and the independent supplier and remaining accountable to the distribution grid operator, the customer may delegate his/her financial obligations, referred to in this paragraph, to the independent supplier for fulfilment (Paragraph 5 of Article 46);

when purchasing electricity from the independent supplier, customers whose equipment is connected to the transmission grid must pay to the transmission system operator for electricity transmission through transmission grids as well as for system services and public interest services; having received the consent of the transmission system operator and the independent supplier and remaining accountable to the transmission system operator, the customer may delegate his/her financial obligations, referred to in this paragraph, to the independent supplier for fulfilment (Paragraph 6 of Article 46).

Thus, to sum up the legal regulation consolidated in the Law on Electricity (wording of 17 January 2012) from the aspect relevant in the constitutional justice case at issue, it should be noted that:

the duty to pay for public interest services to the operator of distribution and/or transmission grids is imposed only on the customers whose equipment is connected respectively to distribution and/or transmission grids;

in order that a person could be deemed a customer, i.e. that he/she could have, inter alia, the possibility of purchasing electricity for consumption, his/her equipment must be connected either to the respective grids or a direct line;

the amount of money payable for public interest services is only one of the elements of the electricity price paid by customers.

In this context, it should be noted that the Republic of Lithuania’s Law on Amending Articles 2, 9 and 67 of the Law on Electricity (No. VIII-1881), which was adopted by the Seimas on 23 December 2014, changed, among other things, the numbering of Paragraphs 9–54 of Article 2 of the Law on Electricity (wording of 17 January 2012); since 2 March 2015, the definition of the concept “customer” has been provided in Paragraph 49 (wording of 23 December 2014) of Article 2 of the Law on Electricity (wording of 17 January 2012).

9. In the context of the constitutional justice case at issue, mention should also be made of the relevant provisions of EU legislation, inter alia, on the common rules for the internal market in electricity and on the promotion of the use of renewable energy sources.

9.1. In this context, it should be noted that the Annex “Legislative Acts of the European Union Implemented by This Law” to the Law on Electricity (wording of 17 January 2012) points out, among other things, Directive 2009/72/EC of the European Parliament and of the Council of 13 July 2009 concerning common rules for the internal market in electricity and repealing Directive 2003/54/EC (hereinafter—Directive 2009/72/EC); Directive 2009/72/EC is also pointed out in the Annex “Legislative Acts of the European Union Implemented by This Law” to the Law on Renewable Energy Sources.

Directive 2009/72/EC, inter alia, prescribes:

a secure supply of electricity is of vital importance for the development of European society, the implementation of a sustainable climate change policy, and the fostering of competitiveness within the internal market (Recital 5); the security of energy supply is an essential element of public security and is therefore inherently connected to the efficient functioning of the internal market in electricity and the integration of the isolated electricity markets of Member States (Recital 25);

respect for the public service requirements is a fundamental requirement of this Directive, and it is important that common minimum standards, respected by all Member States, are specified in this Directive, which take into account the objectives of consumer protection, security of supply, environmental protection and equivalent levels of competition in all Member States; it is important that the public service requirements can be interpreted on a national basis, taking into account national circumstances and subject to the respect of Community law (Recital 46); the public service requirements should be defined at national level, taking into account national circumstances; Community law should, however, be respected by the Member States (Recital 50);

– “producer” means a natural or legal person generating electricity (Article 2(2)); “customer” means a wholesale or final customer of electricity (Article 2(7)); “wholesale customer” means a natural or legal person purchasing electricity for the purpose of resale inside or outside the system where he/she is established (Article 2(8)); “final customer” means a customer purchasing electricity for his/her own use (Article 2(9)); “household customer” means a customer purchasing electricity for his own household consumption, excluding commercial or professional activities (Article 2(10)); “non-household customer” means a natural or legal persons purchasing electricity which is not for their own household use and includes producers and wholesale customers (Article 2(11));

having full regard to the relevant provisions of the Treaty of the Functioning of the European Union, in particular Article 106 thereof (ex Article 86 of the Treaty Establishing the European Community), Member States may impose on undertakings operating in the electricity sector, in the general economic interest, public service obligations which may relate to security, including security of supply, regularity, quality and price of supplies and environmental protection, including energy efficiency, energy from renewable sources and climate protection (Paragraph 2 of Article 3).

Thus, in order to sum up the aforementioned legal regulation consolidated in EU legislation from the aspect relevant to the constitutional justice at issue, it should be noted that:

public service obligations in the general economic interest may be related to the objective of ensuring both the security of, inter alia, electricity supply as an essential element of public security and environmental protection;

taking account of the particularities existing in the respective Member States, the legal regulation governing public interest services should be established by every Member State; in the course of establishing such legal regulation, the requirements laid down in EU law must be respected.

In the context of the constitutional justice case at issue, it should also be noted that, according to Directive 2009/72/EC, customers are also understood as legal persons who generate electricity themselves and purchase it for other than household consumption.

9.2. It should be noted that the Annex “Legislative Acts of the European Union Implemented by This Law” to the Law on Renewable Energy Sources also points out Directive 2009/28/EC of the European Parliament and of the Council of 23 April 2009 on the promotion of the use of energy from renewable sources and amending and subsequently repealing Directives 2001/77/EC and 2003/30/EC (hereinafter—also Directive 2009/28/EC).

Directive 2009/28/EC, among other things, prescribes that, inter alia, the control of European energy consumption and the increased use of energy from renewable sources, together with energy savings and increased energy efficiency, constitute important parts of the package of measures needed to reduce greenhouse gas emissions; those factors also have an important part to play in promoting the security of energy supply, promoting technological development and innovation and providing opportunities for employment and regional development, especially in rural and isolated areas (Recital 1). The same Directive points out that there is a need to support the integration of energy from renewable sources into the transmission and distribution grid and the use of energy storage systems (Recital 57); in addition, priority access and guaranteed access for electricity from renewable energy sources are important for integrating renewable energy sources into the internal market in electricity (Recital 60).

10. In this context, mention should also be made of the provisions, relevant in the constitutional justice case at issue, of certain legal acts of the Republic of Lithuania where such provisions additionally explain, inter alia, within the context of membership of the Republic of Lithuania in the European Union, the national circumstances related to the establishment of public services in the electricity sector.

10.1. By its Resolution (No. XI-2133) “On the Approval of the National Energy Independence Strategy” of 26 June 2012 (hereinafter—also Resolution No. XI-2133), the Seimas approved the National Energy Independence Strategy, which came into force on 11 July 2012.

The said Strategy was adopted having considered, among other things, the necessity to ensure the energy independence of Lithuania from external energy systems and monopolistic primary energy supply, the competitiveness and sustainability of the energy sector, and taking into consideration, inter alia, the fact that energy independence and energy security is an integral part of national security (Preamble to Resolution No. XI-2133).

In the context of the constitutional justice case at issue, it should be mentioned that one of the strategic initiatives in the energy sector is increase in electricity generation from renewable energy sources (Section I of Chapter II of the National Energy Independence Strategy); electricity generation from renewable energy sources is one of the most important priorities in the national energy policy (Item 60 of the National Energy Independence Strategy).

10.2. By its Resolution (No. 789) “On Approving the National Strategy for the Development of Energy from Renewable Sources” of 21 June 2010, among other this, while implementing the provisions of Directive 2009/28/EC, the Government approved the National Strategy for the Development of Energy from Renewable Sources; the strategic aim of the said Strategy is to increase the share of renewable energy in the energy balance sheet of this country so as to best meet the energy demand by using domestic resources in the electricity, thermal power, and transport sectors of this country, to phase out imported polluting fossil fuels in order to strengthen the security of energy supply, and to contribute to international efforts to reduce greenhouse gas emissions (Section I of the National Strategy for the Development of Energy from Renewable Sources).

III

1. In the constitutional justice case at issue, the Constitutional Court is investigating, to the specified extent, the compliance of the legal regulation governing public interest services in the electricity sector with, inter alia, Paragraph 2 of Article 5 and Item 2 of Article 94 of the Constitution, as well as with the constitutional principle of a state under the rule of law.

2. Under Item 2 of Article 94 of the Constitution, the Government executes laws, the resolutions of the Seimas on the implementation of laws, as well as the decrees of the President of the Republic.

The Constitutional Court has held that the duty of the Government to adopt substatutory acts that are necessary for the implementation of laws stems directly from the Constitution and, in cases where there is the commissioning by the legislature to do so, it also stems from laws and the resolutions of the Seimas concerning the implementation of laws; it is important that the Government adopts substatutory legal acts without exceeding its powers and that these legal acts are not in conflict with the Constitution and laws (inter alia, the Constitutional Court’s rulings of 18 December 2001, 31 May 2006, 13 August 2007, and 24 October 2012).

In interpreting the provisions of Item 2 of Article 94 of the Constitution, the Constitutional Court has also held on more than one occasion that, under the Constitution, the Government, when passing legal acts, must follow the existing laws and, when executing certain laws, it may not violate other laws. Legal acts of the Government may contain neither any legal norms that establish a legal regulation different from that laid down in laws, nor any legal norms competing with the norms of laws (inter alia, the Constitutional Court’s rulings of 18 December 2001, 31 May 2006, 13 August 2007, 24 October 2012, and 9 May 2013).

3. The provision of Item 2 of Article 94 of the Constitution, according to which the Government executes laws, should be interpreted, inter alia, in the context of the constitutional principle of a state under the rule of law. This principle should apply both in law-making and in the implementation of law (inter alia, the Constitutional Court’s rulings of 6 December 2000, 16 January 2006, and 13 August 2007). The constitutional principle of a state under the rule of law is especially broad and it comprises a wide range of various interrelated imperatives.

Certain imperatives that are relevant for the constitutional justice case at issue and which arise, inter alia, from the constitutional principle of a state under the rule of law should also be mentioned:

the principle of a state under the rule of law entrenched in the Constitution implies the hierarchy of legal acts, inter alia, it implies that substatutory legal acts may not be in conflict with laws, with constitutional laws, and with the Constitution, that substatutory legal acts must be adopted on the basis of laws, that a substatutory legal act is an act of the application of the norms of a law irrespective of whether that act is of one-off (ad hoc) application or of permanent validity (inter alia, the Constitutional Court’s rulings of 4 December 2008, 20 February 2013, and 9 May 2014);

the constitutional principle of a state under the rule of law implies that the legislature and other law-making subjects are subject to various requirements, inter alia, it implies that law-making subjects are allowed to pass legal acts only without exceeding their powers (inter alia, the Constitutional Court’s rulings of 16 January 2006, 22 March 2010, 9 November 2010, 2 April 2013, and 16 June 2015).

4. The constitutional principle of a state under the rule of law is also reflected in Paragraph 2 of Article 5 of the Constitution which provides that the scope of power is limited by the Constitution (inter alia, the Constitutional Court’s ruling of 13 May 2004).

In this context, it should be noted that, as it has been held by the Constitutional Court on more than one occasion, the constitutional principle of the separation of powers means that that the legislative, executive, and judicial powers must be separated and must be sufficiently independent, however, there must also be a balance among them; that every institution of power is granted the competence corresponding to its purpose; that the concrete content of the competence of an institution depends on the branch of state power to which this institution belongs and on the place of the said institution in the overall system of the branches of state power, as well as on the place of the said institution among other institutions of power and on the relation of the powers of the said institution with the powers of other institutions.

If the legal regulation laid down in government resolutions competed with the legal regulation established in laws or were not based on laws, there would be not only a violation of both the constitutional principle of a state under the rule of law and Item 2 of Article 94 of the Constitution, but also a violation of Paragraph 2 of Article 5 of the Constitution which provides that the scope of power is limited by the Constitution (inter alia, the Constitutional Court’s rulings of 31 May 2006, 13 August 2007, and 24 October 2012).

5. The constitutional principle of a state under the rule of law is also closely related to the constitutional values upon which the national economy is based (the Constitutional Court’s rulings of 4 December 2008 and 2 March 2009).

In the context of the constitutional justice case at issue, mention should be made of the provisions of the official constitutional doctrine which disclose the requirements, stemming from the Constitution, inter alia, Article 46 thereof, for the legislator when it regulates the economic activity, among other things, in the electricity sector:

the main criterion of regulating economic activity is the general welfare of the nation; the legal regulation governing economic activity is not an objective in itself but rather a means of social engineering and a way to achieve the welfare of the nation through law (inter alia, the Constitutional Court’s rulings of 13 May 1995, 30 June 2008, and 4 December 2008); when regulating economic activity, the state must comply with the principle of the reconciliation of the interests of the person and society, must ensure the interests of both a private person (a subject of economic activity) and society, and must seek not the welfare of individual persons, but precisely the general welfare of the nation, which can be opposed to the welfare, rights, and legitimate interests of neither the economic subject whose activity falls under the regulation, nor the persons that have established, have control over, or are otherwise connected with the said economic subject (the Constitutional Court’s ruling of 29 April 2009); the duty of the state consolidated in Paragraph 3 of Article 46 of the Constitution to regulate (by taking account of the resources of the state, its material and financial possibilities and other important factors) the economic activity so that it would serve the general welfare of the nation implies the requirement for the legislature to balance various constitutional values in regulating such activity (the Constitutional Court’s rulings of 2 March 2009 and 5 March 2015), inter alia, to find a balance among freedom of individual economic activity and initiative, freedom of fair competition, and the protection of consumers’ interests (the Constitutional Court’s ruling of 3 April 2015);

Paragraph 5 of Article 46 of the Constitution lays down the duty of the state to defend the interests of consumers; this constitutional provision implies that various measures of the protection of consumers’ interests must be established by means of legal norms and that state institutions must exercise control over how economic subjects comply with established requirements etc. (the Constitutional Court’s ruling of 18 October 2000); the specific features of the relations in certain spheres of economic activity are typical of the said spheres only; such specific features may imply, inter alia, the particularities of the regulation governing the relations of the protection and defence of the rights and interests of consumers in certain fields of economic activity; namely the content of the economic activity, its specific features, and the particularities in certain fields of economy may determine the necessity and need for a special regulation governing the legal relations of the protection and defence of the rights and interests of consumers in a certain sphere of economic activity; thus, the measures of the protection and defence of the rights and interests of the consumers in certain spheres of economic activity may differ depending on the specific features of the relations of a concrete economic activity (the Constitutional Court’s ruling of 2 March 2009); the legislature, while regulating the relations of a certain sector of economy in which a specific legal situation of certain economic subjects is consolidated, and while providing for in other laws the exceptions to the regulation governing the said relations, must also establish additional legal measures that would ensure the protection of the rights and legitimate interests of consumers (the Constitutional Court’s ruling of 17 March 2003);

the economic activity conducted in the sphere of energy, inter alia, the provision of all consumers with energy resources, is a specific economic activity; such an activity is characterised, among other things, by the fact that conducting this activity has a direct influence on the entire national economy (the Constitutional Court’s ruling of 3 April 2015); the options of the legislature to establish the measures in order to ensure the general welfare of the nation in the electricity sector are determined by the particularities of electricity, inter alia, by limited resources of electricity as well as by material, financial and other important factors (the Constitutional Court’s ruling of 2 March 2009); the security and reliability of the energy system is a constitutionally important objective that justifies a particular differentiated legal regulation of economic activity in this sphere on the grounds of the public interest; while regulating, in accordance with the Constitution, inter alia, Paragraph 3 of Article 46 thereof, the economic activity in the sphere of energy so that it would serve the general welfare of the nation, the legislature is obliged to establish such legal regulation that would ensure the security, stability, and reliability of the energy system, inter alia, the opportunity to receive energy supplies from multiple sources (suppliers) under non-discriminatory conditions and at fair prices (the Constitutional Court’s ruling of 3 April 2015); the imperative of the guarantee of an efficient protection of the rights and interests of consumers which stems from the Constitution, inter alia, Paragraph 5 of Article 46 thereof, also implies that the legislature must establish such legal regulation that would create the preconditions for each consumer to receive electricity under non-discriminatory conditions and would ensure the supply of electricity to all consumers in a safe and reliable manner (the Constitutional Court’s rulings of 2 March 2009, 29 September 2010, and 3 April 2015);

the state must regulate economic activity so that it would also ensure, inter alia, the public interest consolidated in Article 54 of the Constitution—the protection of the natural environment, wildlife and plants, individual objects of nature, areas of particular value, as well as the sustainable use of natural resources, their restoration and increase; the state has the constitutional duty to guarantee the said public interest (inter alia, the Constitutional Court’s rulings of 13 May 2005 and 29 April 2009).

6. In the context of the constitutional justice case at issue, it should be noted that the specific character of the economic activity conducted in the energy sphere, inter alia, the supply of all consumers with energy resources, also the necessity (arising, inter alia, from the obligations of the membership of the Republic of Lithuania in the European Union) to ensure the security and reliability of the energy system, as well as the objective to ensure environmental protection by promoting, in various ways, the use of renewable energy sources, determine the particularities of the legal regulation governing the public interest services that are provided with a view to achieving the said objectives. Having regard to the Constitution, inter alia, the principle of the reconciliation of the interests of the person and society, and ensuring the possibility of obtaining energy resources from various sources, it is possible to establish such a legal regulation of public services in the electricity sphere that lays down the duty for all persons consuming electricity to pay for these services once they are ensured the opportunity to receive electricity required for satisfying their needs.

IV

On the compliance of Items 7.1, 7.8, and 7.9 of the Description of the Procedure for Rendering Public Interest Services in the Electricity Sector, as approved by government resolution (No. 916) of 18 July 2012, with Paragraph 2 of Article 5 and Item 2 of Article 94 of the Constitution, with the constitutional principle of a state under the rule of law, with Paragraphs 1 and 2 of Article 74 of the Law on Electricity, and with the provision “Electricity generation from renewable energy sources shall be a public interest service” of Paragraph 1 of Article 20 of the Law on Energy from Renewable Sources

1. It has been mentioned that, in the constitutional justice case at issue, subsequent to the received petition, the Constitutional Court is investigating whether Item 7.1 of the Description of the Procedure for Rendering PISs insofar as it prescribes that the balancing of electricity generated from renewable sources is a public interest service, as well as whether Items 7.8 and 7.9 of the same Description, are in conflict with Paragraph 2 of Article 5 and Item 2 of Article 94 of the Constitution, with the constitutional principle of a state under the rule of law, as well as with Paragraphs 1 and 2 of Article 74 of the Law on Electricity (wording of 17 January 2012), and whether, to the specified extent, Item 7.1 of the same Description was in conflict with the provision “Electricity generation from renewable energy sources shall be a public interest service” of Paragraph 1 of Article 20 of the Law on Energy from Renewable Sources.

2. As mentioned before, Item 7 of the Description of the Procedure for Rendering PISs, among other things, prescribes:

7. Public interest services shall include:

7.1. electricity generation from renewable energy sources and balancing such electricity; […]

7.8. the connection of renewable power plants to electricity grids;

7.9. the optimisation, development, and/or reconstruction of electricity grids carried out by the electricity grid operator in order to ensure the development of electricity generation from renewable sources.”

3. It has also been mentioned that the petitioner has doubts, to the specified extent, about the compliance of Items 7.1, 7.8, and 7.9 of the Description of the Procedure for Rendering PISs with the Constitution and laws due to the fact that, in the opinion of the petitioner, by the impugned legal regulation, exceeding the competence granted to it, the Government categorised as public interest services the additional services not provided for in Paragraph 1 of Article 74 of the Law on Electricity (wording of 17 January 2012).

4. When deciding on the compliance of Item 7.1 (to the specified extent) as well as that of Items 7.8 and 7.9 of the Description of the Procedure for Rendering PISs with the Constitution and with the provisions of the laws pointed out by the petitioner, it should first be noted that, under the Constitution, the duty of the Government to adopt substatutory acts that are necessary for the implementation of laws stems directly from the Constitution and, in cases where there is the commissioning by the legislature to do so, it also stems from laws and the resolutions of the Seimas concerning the implementation of laws.

4.1. It has been mentioned that one of the objectives set in the Law on Electricity (wording of 17 January 2012) is to establish the legal framework for public interest services and objectively reasonable, clear, as well as transparent requirements and obligations in the electricity sector; the legal regulation laid down in Item 5 of Paragraph 1 of Article 6 as well as in Paragraphs 1 and 2 of Article 74 of the Law on Electricity (wording of 17 January 2012) grants the powers to the Government to establish, inter alia, a list of public interest services and the procedure for providing such services.

As mentioned before, government resolution No. 916 approving the Description of the Procedure for Rendering PISs was adopted by invoking, inter alia, Item 5 of Paragraph 1 of Article 6 and Paragraph 2 of Article 74 of the Law on Electricity (wording of 17 January 2012); the Description approved by the said government resolution establishes a list of public interest services in the electricity sector, the procedure for rendering such services, the obligations to provide such services, and the procedure for compensating the rendition of such services (Item 1 of the Description of the Procedure for Rendering PISs).

4.2. Thus, by adopting this resolution, the Government, among other things, implemented the powers granted to it by the Law on Electricity (wording of 17 January 2012) to establish a list of public interest services and the procedure for providing such services.

Since the Government enjoyed the powers to establish, in the Description of the Procedure for Rendering PISs, the procedure for implementing the legal regulation laid down in the Law on Electricity (wording of 17 January 2012) relevant in this context and governing public interest services in the electricity sector, i.e., it enjoyed the powers to establish, inter alia, a list of public interest services in the electricity sector, therefore, from this aspect, the requirements arising from the Constitution for the Government regarding the adoption of substatutory acts required for the implementation of laws have not been deviated from.

5. When assessing whether the Government, without exceeding the powers granted to it, has properly implemented the commissioning by the legislature to establish, inter alia, a list of public interest services, it should be noted that:

the economic activity conducted in the sphere of energy, inter alia, the provision of all consumers with energy resources, is a specific economic activity; such an activity is characterised, among other things, by the fact that conducting this activity has a direct influence on the entire national economy; the options of the legislature to establish the measures in order to ensure the general welfare of the nation in the electricity sector are determined by the particularities of electricity, inter alia, by limited resources of electricity as well as by material, financial and other important factors; the security and reliability of the energy system is a constitutionally important objective that justifies a particular differentiated legal regulation of economic activity in this sphere on the grounds of the public interest; while regulating, in accordance with the Constitution, inter alia, Paragraph 3 of Article 46 thereof, the economic activity in the sphere of energy so that it would serve the general welfare of the nation, the legislature is obliged to establish such legal regulation that would ensure the security, stability, and reliability of the energy system, inter alia, the opportunity to receive energy supplies from multiple sources (suppliers) under non-discriminatory conditions and at fair prices; the imperative (which stems from the Constitution, inter alia, Paragraph 5 of Article 46 thereof) of the guarantee of an efficient protection of the rights and interests of consumers also implies that the legislature must establish such legal regulation that would create the preconditions for each consumer to receive electricity under non-discriminatory conditions and would ensure the supply of electricity to all consumers in a safe and reliable manner;

under the Constitution, inter alia, Item 2 of Article 94 thereof, the Government, when passing legal acts, must follow the existing laws and, when executing certain laws, it may not violate other laws;

the principle of a state under the rule of law entrenched in the Constitution also implies the hierarchy of legal acts, inter alia, it implies that substatutory legal acts may not be in conflict with laws, with constitutional laws, and with the Constitution, and that substatutory legal acts must be adopted on the basis of laws; law-making subjects are allowed to pass legal acts only without exceeding their powers;

if the legal regulation laid down in government resolutions competed with the legal regulation established in laws or were not based on laws, there would be not only a violation of both the constitutional principle of a state under the rule of law and Item 2 of Article 94 of the Constitution, but also a violation of Paragraph 2 of Article 5 of the Constitution which provides that the scope of power is limited by the Constitution.

5.1. It has been mentioned that Paragraph 53 (wording of 23 December 2014) of Article 2, and Paragraphs 1, 2, and 5 of Article 74 the Law on Electricity (wording of 12 January 2012) consolidate the requirements to be followed by the Government when it implements the powers conferred on it by law to establish a list of public interests, i.e. the requirement that, when establishing the said list, the Government should comply with the general requirements laid down in the law and should act in view of public interests in the electricity sector. The aforesaid general requirements that must be complied with in the course of establishing a list of public interest services in the electricity sector are as follows: the requirement that in the course of establishing the said list the aims laid down in the law—the pursuit of implementing the strategic objectives of the energy, economic and environmental protection policies of the state in the electricity sector—should be fulfilled; the requirement that a list of public interest services should be established only on the basis of the provisions of the legal acts—the Law on Electricity and the other laws governing the legal framework for activities in the energy sectors—as specified in the law; the requirement that, when the Government categorises certain services as public interest services in the electricity sector, it should follow the criteria (defined in the law) of economic rationale and the lowest cost and impact on the price of electricity for end-users. The imposed requirement to act in view of public interests in the electricity sector in the course of establishing a list of public interest services in the same sector means that, when establishing the said list, the Government is under the obligation to take into consideration the fact whether the respective act or inaction in the electricity sector is directly or indirectly related to national energy security and/or public security, to the security and reliability of the operation of the electricity system, to the reduction of the negative environmental impact caused by the electricity sector, to the diversification of energy resources, or to other objectives of the sustainable development of the electricity sector which are provided for in this law.

It has also been mentioned that Paragraph 1 of Article 74 of the Law on Electricity (wording of 17 January 2012) points out the services which, when the Government establishes a list of public interest services in the electricity sector in conformity with the aforesaid general requirements and in view of public interests in the electricity sector, inter alia, might be categorised as public interest services.

In this context, it should be noted that the requirement, consolidated in Paragraph 2 of Article 74 of the Electricity Law (wording of 17 January 2012), that the Government, when establishing a list of public interest services, must exceptionally follow the provisions of Paragraph 1 of this article does not mean that only the services specified in this paragraph could be categorised by the Government as public interest services; under Paragraph 1 of Article 74 of the Electricity Law (wording of 17 January 2012), based on the aforesaid general requirements and in view of public interests in the electricity sector, the Government may also categorise other services, in addition to those directly listed in this paragraph, as public interest services in the electricity sector.

As mentioned before, the list of public interest services in the electricity sector as established in Item 7 of the Description of the Procedure for Rendering PISs differs from that established in Paragraph 1 of Article 74 of the Law on Electricity (wording of 17 January 2012)—the Description of the Procedure for Rendering PISs established additional services categorised as public interest services in the electricity sector, whereas the respective legal regulation laid down in the said law did not categorise the said services as public interest services: Item 7.1 of the same Description categorises not only electricity generation from renewable sources, but also balancing such electricity as a public interest service; Item 7.8 thereof categorises the connection of renewable power plants to electricity grids as a public interest service, and Item 7.9 thereof indicates that the optimisation, development, and/or reconstruction of electricity grids carried out by the electricity grid operator in order to ensure the development of electricity generation from renewable sources is also categorised as a public interest service.

5.1.1. When investigating whether the balancing of electricity generated from renewable energy sources was categorised in Item 7.1 of the Description of the Procedure for Rendering PISs as a public interest service, without violating, among other things, the requirements laid down in the Law on Electricity (wording of 17 January 2012), it should be noted that, as mentioned before, both Paragraph 1 of Article 74 of the Law on Electricity (wording of 17 January 2012) and Paragraph 1 (wording valid prior to 1 February 74) of Article 20 of the Law on Energy from Renewable Sources categorised only electricity generation from renewable sources as a public interest service.

It has been mentioned that, according to the established legal regulation, ensuring the balancing between electricity supply and demand, inter alia, the balancing of electricity generated from renewable energy sources, are a part of the national balancing function which, among other things, is aimed at ensuring the balance between electricity supply and demand according to the criteria of system safety and reliability at the electricity system level; therefore, at the electricity system level, the balancing of electricity generated, inter alia, from renewable energy sources is inseparably related, inter alia, to the production of electricity.

Thus, the balancing of electricity generated from renewable energy sources should be related, among other things, to such activity in the electricity sector which is connected, inter alia, with the security and reliability of the electricity system, i.e. which serves the public interest in the electricity sector.

It should be noted that categorising the balancing of electricity generated from renewable energy sources as a public interest service also meets the general requirements that are consolidated in the Law on Electricity (wording of 17 January 2012) and must be complied with when establishing a list of public interest services in the electricity sector. In addition, balancing such electricity fulfils, inter alia, one of the purposes of this law—to achieve the strategic goals of state energy policy and to ensure the implementation of the interests of society.

Consequently, when categorising, in Item 7.1 of the Description of the Procedure for Rendering PISs, the balancing of electricity generated from renewable energy sources as a public interest service in the situation where the Law on Electricity (wording of 17 January 2012), the Law on Energy from Renewable Sources, or any other laws did not categorise expressis verbis such a service as a public interest service, the Government implemented its powers to establish a list of public services acting in view of public interests in the electricity sector and in conformity with the general requirements consolidated in the Law on Electricity (wording of 17 January 2012), i.e., without violating Paragraphs 1 and 2 of Article 74 of the said law or the provision “Electricity generation from renewable energy sources shall be a public interest service” of Paragraph 1 of Article 20 of the Law on Energy from Renewable Sources; thus, the Government has consolidated the impugned legal regulation laid down in Item 7.1 of the Description of the Procedure for Rendering PISs, without violating the requirement, arising from the Constitution, for law-making subjects to pass legal acts by not exceeding the powers conferred on them.

In this context, it should also be noted that Paragraph 1 (which came into force on 1 February 2013) of Article 20 (wording of 17 January 2013) of the Law on Energy from Renewable Sources categorised as a public interest service not only electricity generation from renewable energy sources, but also the balancing of electricity generated from renewable energy sources.

5.1.2. When investigating whether the connection of renewable power plants to the electricity grids was categorised in Item 7.8 of the Description of the Procedure for Rendering PISs as a public interest service, without violating, among other things, the requirements laid down in the Law on Electricity (wording of 17 January 2012), it should be noted that, even though Paragraph 1 of Article 74 of the Law on Electricity (wording of 17 January 2012) does not define the connection of the said power plants to electricity grids as a public interest service, however, as mentioned before, it is categorised as a public interest service in the Law on Energy from Renewable Sources (Paragraph 1 of Article 21 thereof).

It has also been mentioned that, according to the established legal regulation, power generation from renewable energy sources is one of the most important priorities in the national energy policy; in addition, one of the strategic initiatives in the energy sector is increase in power generation from renewable energy sources.

Thus, the connection of renewable power plants to electricity grids should be regarded as an activity in the electricity sector that is related, among other things, to the reduction of the negative environmental impact caused by the electricity sector and the diversification of energy resources, i.e. an activity that serves the public interest in the electricity sector; in addition, categorising the connection of renewable power plants to electricity grids as a public interest service is also in conformity with the general requirements that are consolidated in the Law on Electricity (wording of 17 January 2012) and must be complied with while establishing a list of public interest services in the electricity sector.

Consequently, when categorising the connection of renewable power plants to electricity grids in Item 7.8 of the Description of the Procedure for Rendering PISs as a public interest service, the Government implemented its powers acting in view of public interests in the electricity sector and in conformity with the general requirements consolidated in the Law on Electricity (wording of 17 January 2012); the Government implemented such powers, among other things, on the basis of the provisions of the Law on Energy from Renewable Sources, i.e., without violating Paragraphs 1 and 2 of Article 74 of the Law on Electricity (wording of 17 January 2012); thus, the Government has consolidated the impugned legal regulation laid down in Item 7.8 of the Description of the Procedure for Rendering PISs, without violating the requirement, arising from the Constitution, for law-making subjects to pass legal acts by not exceeding the powers conferred on them.

5.1.3. When investigating whether the optimisation, development, and/or reconstruction of electricity grids carried out by the electricity grid operator in order to ensure the development of electricity generation from renewable sources were categorised in Item 7.9 of the Description of the Procedure for Rendering PISs as public interest services, without violating, among other things, the requirements laid down in the Law on Electricity (wording of 17 January 2012), it should be noted that, as mentioned before, Paragraph 1 of Article 74 of the same law does not categorise the said services as public interest services in the electricity sector.

It has been mentioned that, according to the established legal regulation, the development of the use of renewable energy sources for electricity production is among the strategic aims of state energy policy. Such an aim is fulfilled, among other things, by reimbursing the costs of connecting installations that use renewable energy to energy grids, and by establishing the duty of the electricity grid operator to connect the equipment specified in the law to electricity grids, inter alia, in cases where such connection is possible only upon upgrading the electricity grids, optimising them, expanding the electricity grids, increasing the capacity of the electricity grids or reconstructing them otherwise; the connection of power plants to electricity grids and the reimbursable costs incurred by the electricity grid operator due to the optimisation, development, and/or reconstruction of electricity grids in the part which is necessary in order to ensure the development of renewable energy sources and is approved by the established procedure are public interest services.

In this context, it should also be noted that, inter alia, the respective optimisation, development, and/or reconstruction of electricity grids (so as to increase their capacity) serve the public interest in the electricity sector when this is performed in order to ensure the increase in the use of renewable energy sources, among other things, for generating electricity, inter alia, when the respective actions in providing a public interest service—the connection of power plants to electricity grids—are carried out by the electricity grid operator that has the duty, established in the law, to connect the electricity equipment, specified in the law, to electricity grids.

It should also be noted that categorising, as a public interest service, the optimisation, development, and/or reconstruction of electricity grids carried out by the electricity grid operator in order to ensure the development of electricity generation from renewable sources meets the general requirements consolidated in the Law on Electricity (wording of 17 January 2012). The said requirements must be complied with when establishing a list of public interest services in the electricity sector.

Consequently, when categorising, in Item 7.9 of the Description of the Procedure for Rendering PISs, as a public interest service the optimisation, development, and/or reconstruction of electricity grids carried out by the electricity grid operator in order to ensure the development of electricity generation from renewable sources in the situation where the Law on Electricity (wording of 17 January 2012) did not categorise expressis verbis such a service as a public interest service, the Government implemented its powers to establish a list of public services acting in view of public interests in the electricity sector and in conformity with the general requirements consolidated in the Law on Electricity (wording of 17 January 2012), i.e., without violating Paragraphs 1 and 2 of Article 74 of the Law on Electricity (wording of 17 January 2012); thus, the Government has consolidated the impugned legal regulation laid down in Item 7.9 of the Description of the Procedure for Rendering PISs, without violating the requirement, arising from the Constitution, for law-making subjects to pass legal acts by not exceeding the powers conferred on them.

5.2. Thus, the Government categorised the respective services in Items 7.1, 7.8, and 7.9 of the Description of the Procedure for Rendering PISs as public interest services on the basis of the requirements that are laid down in the Law on Electricity (wording of 17 January 2012), inter alia, in Paragraphs 1 and 2 of Article 74 thereof, and must be complied with in cases where the Government implements its powers, conferred on it by law, to establish a list of public interest services, without violating the provisions of the Law on Energy from Renewable Sources.

It should be held that, by the impugned legal regulation laid down in the Description of the Procedure for Rendering PISs, without exceeding its powers, the Government has properly implemented the commissioning formulated for it by the legislature to establish a list of public interest services in the electricity sector. The Government has also implemented this commissioning without deviating from the requirements arising from the Constitution, inter alia, from Paragraph 2 of Article 5 and Item 2 of Article 94 thereof, and from the constitutional principle of a state under the rule law, where such requirements are applicable in situations when the Government adopts substatutory legal acts.

6. In the light of the foregoing arguments, the conclusion should be drawn that:

Item 7.1 of the Description of the Procedure for Rendering PISs insofar as it prescribes that the balancing of electricity generated from renewable sources is a public interest service is not in conflict with the Constitution and with Paragraphs 1 and 2 of Article 74 of the Law on Electricity and was not in conflict with the provision “Electricity generation from renewable energy sources shall be a public interest service” of Paragraph 1 of Article 20 of the Law on Energy from Renewable Sources;

Items 7.8 and 7.9 of the Description of the Procedure for Rendering PISs are not in conflict with the Constitution and Paragraphs 1 and 2 of Article 74 of the Law on Electricity (wording of 17 January 2012).

V

On the compliance of Item 16.4 of the Description of the Procedure for the Administration of Funds Raised from PISs, as approved by government resolution No. 1157 of 19 September 2012, with Paragraph 2 of Article 5 and Item 2 of Article 94 of the Constitution, with the constitutional principle of a state under the rule of law, as well as with Paragraph 48 of Article 2 and Paragraphs 5 and 6 of Article 46 of the Law on Electricity

1. It has been mentioned that, in the constitutional justice case at issue, subsequent to the received petition, the Constitutional Court is investigating whether Item 16.4 of the Description of the Procedure for the Administration of Funds Raised from PISs insofar as the funds for the specified public interest services must be paid by those persons who, for their economic needs, use the electricity produced by them through the use of cogeneration (in combined heat and power generation plants) and, at the same time, are electricity customers was in conflict with Paragraph 2 of Article 5 and Item 2 of Article 94 of the Constitution, with the constitutional principle of a state under the rule of law, and with Paragraph 48 of Article 2 and Paragraphs 5 and 6 of Article 46 of the Law on Electricity (wording of 17 January 2012).

2. As mentioned before, Item 16.4 of the Description of the Procedure for the Administration of Funds Raised from PISs prescribed: “The persons who, for their economic needs, use the electricity produced by them through the use of cogeneration (in combined power and heat generation plants) shall pay the operator of the electricity grids to which their electricity generation equipment is connected for the services specified in Items 7.1 and 7.4–7.9 of the Description for the Procedure for Rendering Services for the actual amount of the electricity generated through the use of cogeneration (in combined power and heat generation plants) and used for economic needs both by them and by persons who receive electricity from the former persons through a direct line.”

3. It has also been mentioned that the petitioner has doubts about the compliance of Item 16.4 of the Description of the Procedure for the Administration of Funds Raised from PISs with the Constitution and laws due to the fact that, by this legal regulation, according to the petitioner, the Government imposed the duty to pay for public interest services on electricity producers who themselves render the respective public interests services, even though, according to the legal regulation laid down in the Law on Electricity, only electricity customers—the subjects who purchase electricity—have such a duty. Thus, in the opinion of the petitioner, the impugned legal regulation imposed the duty on a certain part of electricity producers to pay for public interests services while consuming the electricity which they themselves produce and which they do not purchase.

4. When deciding on the compliance of Item 16.4 (to the specified extent) of the Description of the Procedure for the Administration of Funds Raised from PISs with the Constitution and with the provisions (pointed out by the petitioner) of the law, it should first be noted that, under the Constitution, the duty of the Government to adopt substatutory acts that are necessary for the implementation of laws stems directly from the Constitution and, in cases where there is the commissioning by the legislature to do so, it also stems from laws and the resolutions of the Seimas concerning the implementation of laws.

4.1. It has been mentioned that the legal regulation laid down in Item 7 of Paragraph 1 of Article 6 of the Law on Electricity (wording of 17 January 2012) grants the powers to the Government to approve the Description of the Procedure for the Administration of Funds Raised from PISs; when implementing, inter alia, the aforesaid provisions of Item 7 of Paragraph 1 of Article 6 of the Law on Electricity (wording of 17 January 2012), by its Resolution (No. 1157) “On the Approval of the Description of the Procedure for the Administration of Funds Raised from Public Interest Services in the Electricity Sector” of 19 September 2012, the Government approved the Description of the Procedure for the Administration of Funds Raised from PISs.

It should be mentioned that the Description of the Procedure for the Administration of Funds Raised from PISs lays down, among other things, the procedure for the administration of funds raised from public interest services and the requirements for collecting and paying funds as well as the accounting thereof.

4.2. Thus, when implementing the respective commissioning formulated by the legislature for the Government in Item 7 of Paragraph 1 of Article 6 of the Law on Electricity (wording of 17 January 2012), the latter has adopted the Description of the Procedure for the Administration of Funds Raised from PISs in which it established, inter alia, the procedure of paying the funds for public interest services.

Since the Government enjoyed the powers to establish the procedure for implementing the legal regulation laid down in the Law on Electricity (wording of 17 January 2012) relevant in this context and governing public interest services in the electricity sector, i.e., it enjoyed the powers to establish the procedure of paying the funds for public interest services, thus, from this aspect, the requirements arising from the Constitution for the Government regarding the adoption of substatutory acts required for the implementation of laws have not been deviated from.

5. When assessing whether the Government, without exceeding the powers granted to it, has properly implemented the commissioning by the legislature to approve a description of the procedure for the administration of funds raised from public interest services and to establish, among other things, the procedure of paying the funds for public interest services, it should be noted that:

under the Constitution, inter alia, Item 2 of Article 94 thereof, the Government, when passing legal acts, must follow the existing laws and, when executing certain laws, it may not violate other laws;

the principle of a state under the rule of law entrenched in the Constitution also implies the hierarchy of legal acts, inter alia, it implies that substatutory legal acts may not be in conflict with laws, with constitutional laws, and with the Constitution, and that substatutory legal acts must be adopted on the basis of laws; law-making subjects are allowed to pass legal acts only without exceeding their powers;

if the legal regulation laid down in government resolutions competed with the legal regulation established in laws or were not based on laws, there would be not only a violation of both the constitutional principle of a state under the rule of law and Item 2 of Article 94 of the Constitution, but also a violation of Paragraph 2 of Article 5 of the Constitution which provides that the scope of power is limited by the Constitution.

6. It has been mentioned that Item 16.4 of the Description of the Procedure for the Administration of Funds Raised from PISs laid down the procedure of paying for public interest services applicable to the persons who, for their economic needs, use the electricity produced by them through the use of cogeneration (in combined power and heat generation plants) and whose electricity generation equipment is connected to the respective electricity grids; according to the said procedure, funds for the respective public interest services are paid to the operator of the electricity grids to which the electricity generation equipment of the said persons is connected.

Thus, according to this legal regulation, the duty to pay for the public interest services specified therein falls on all the persons who, for their economic needs, use the electricity produced by them through the use of cogeneration (in combined power and heat generation plants) and whose electricity generation equipment is connected to the respective electricity grids. It should be noted that such persons must pay for the respective public interest services irrespective of which part of required electricity used by them is purchased.

7. It has also been mentioned that the legal regulation laid down in the Law on Electricity (wording of 17 January 2012) (Paragraph 48 of Article 2, Paragraphs 5 and 6 of Article 46) imposed the duty to pay for public interest services to the operator of distribution and/or transmission grids only on the customers whose equipment is connected respectively to distribution and/or transmission grids; in order that a person could be deemed a customer, i.e. that he/she could have, inter alia, the possibility of purchasing electricity for consumption, his/her equipment must be connected either to the respective grids or a direct line.

Thus, the Law on Electricity (wording of 17 January 2012) has imposed the duty to pay for public interest services on all the persons whose equipment is connected to a certain grid or direct line and who, as a result of this, have the possibility of purchasing electricity, i.e. this duty applies to all customers.

8. In this context, it should be noted that, as mentioned before, under the Constitution, the specific character of the economic activity conducted in the energy sphere, inter alia, the supply of all consumers with energy resources, also the necessity (arising, inter alia, from the obligations of the membership of the Republic of Lithuania in the European Union) to ensure the security and reliability of the energy system, as well as the objective to ensure environmental protection by promoting, in various ways, the use of renewable energy sources, determines the particularities of the legal regulation governing the public interest services that are provided with a view to achieving the said objectives. Having regard to the Constitution, inter alia, the principle of the reconciliation of the interests of the person and society, and ensuring the possibility of obtaining energy resources from various sources, it is possible to establish such a legal regulation of public services in the electricity sphere that lays down the duty for all persons consuming electricity to pay for these services once they are ensured the opportunity to receive electricity required for satisfying their needs.

9. As mentioned before, the main aims of the Law on Electricity (wording of 17 January 2012) are, among other things, to ensure safe and reliable operation of the electricity system, electricity generation, transmission, distribution and supply and to establish the legal framework for public interest services and reasonable, clear and transparent requirements and obligations in the electricity sector; according to the provisions of the Law on Electricity (wording of 17 January 2012), “public interests in the electricity sector” means any act or inaction in the electricity sector, directly or indirectly related, inter alia, to the national energy security and/or public security, the security and reliability of the operation of the electricity system, the reduction of the negative environmental impact of the electricity sector, and the diversification of energy sources.

10. Consequently, the legal regulation laid down in Paragraph 48 of Article 2 and Paragraphs 5 and 6 of Article 46 of the Law on Electricity (wording of 17 January 2012), imposing the duty on all electricity customers to pay for public interest services, should be assessed as meaning that the duty of every electricity customer (a person whose equipment is connected either to a certain grid or direct line and who, as a result of this, has the possibility of purchasing the amount of electricity required for satisfying his/her needs) to pay for public interest services is related to the amount of the used electricity, irrespective of which part of the used electricity is purchased or which part is generated by the customers themselves.

Such a legal regulation laid down in Paragraph 48 of Article 2 and Paragraphs 5 and 6 of Article 46 of the Law on Electricity (wording of 17 January 2012) has created the preconditions for ensuring the imperative, arising from the Constitution, inter alia, Paragraph 5 of Article 46 thereof, to ensure the effective protection of the rights and interests of consumers; according to this imperative, among other things, such a legal regulation must be established that ensures the safe and reliable supply of electricity to all consumers.

11. Therefore, having established, in Item 16.4 of the Description of the Procedure for the Administration of Funds Raised from PISs, that the customers whose equipment is connected to certain grids and who purchase only part of the electricity required to satisfy their economic needs and generate themselves the other part of the required electricity through the use of cogeneration (in combined power and heat generation plants) have the duty to pay for the specified public interest services, irrespective of which part of the used electricity is purchased (i.e. the duty to pay depends on the amount of the consumed electricity), the Government has not unlawfully expanded the circle of the subjects who, under the law, must pay for the public interest services.

Consequently, by establishing the aforementioned procedure of paying the funds for public interest services, the impugned legal regulation consolidated in the Description of the Procedure for the Administration of Funds Raised from PISs did not violate the provisions of Paragraph 48 of Article 2 and Paragraphs 5 and 6 of Article 46 of the Law on Electricity (wording of 17 January 2012).

It should be held that, by the impugned legal regulation laid down in the Description of the Procedure for the Administration of Funds Raised from PISs and without exceeding its powers, the Government has properly implemented the commissioning given to it by the legislature to approve a description of the procedure for the administration of funds raised from public interest services, among other things, to establish in such a description the procedure of paying the funds for public interest services—the Government has also implemented this commissioning without deviating from the requirements arising from the Constitution, inter alia, from Paragraph 2 of Article 5 and Item 2 of Article 94 thereof, and from the constitutional principle of a state under the rule law, where such requirements are applicable in situations when the Government adopts substatutory legal acts.

12. In the light of the foregoing arguments, the conclusion should be drawn that Item 16.4 of the Description of the Procedure for the Administration of Funds Raised from PISs insofar as the funds for the specified public interest services must be paid by those persons who, for their economic needs, use the electricity produced by them through the use of cogeneration (in combined heat and power generation plants) and, at the same time, are electricity customers was not in conflict with the Constitution and with Paragraph 48 of Article 2 and Paragraphs 5 and 6 of Article 46 of the Law on Electricity (wording of 17 January 2012).

Conforming to Articles 102 and 105 of the Constitution of the Republic of Lithuania and Articles 1, 53, 531, 54, 55, and 56 of the Law on the Constitutional Court of the Republic of Lithuania, the Constitutional Court of the Republic of Lithuania gives the following

ruling:

1. To recognise that Item 7.1 of the Description of the Procedure for Rendering Public Interest Services in the Electricity Sector, as approved by the Resolution of the Government of the Republic of Lithuania (No. 916) “On the Approval of the Description of the Procedure for Rendering Public Interest Services in the Electricity Sector” of 18 July 2012 (Official Gazette Valstybės žinios, 2012, No. 88-4609), insofar as the said item prescribes that the balancing of electricity generated from renewable sources is a public interest service is not in conflict with the Constitution of the Republic of Lithuania and with Paragraphs 1 and 2 of Article 74 of the Republic of Lithuania’s Law on Electricity (wording of 17 January 2012; Official Gazette Valstybės žinios, 2012, No. 17-752), and was not in conflict with the provision “Electricity generation from renewable energy sources shall be a public interest service” of Paragraph 1 of Article 20 of the Republic of Lithuania’s Law on Energy from Renewable Sources (Official Gazette Valstybės žinios, 2011, No. 62-2936).

2. To recognise that Items 7.8 and 7.9 of the Description of the Procedure for Rendering Public Interest Services in the Electricity Sector, as approved by the Resolution of the Government of the Republic of Lithuania (No. 916) “On the Approval of the Description of the Procedure for Rendering Public Interest Services in the Electricity Sector” of 18 July 2012 (Official Gazette Valstybės žinios, 2012, No. 88-4609), are not in conflict with the Constitution of the Republic of Lithuania and with Paragraphs 1 and 2 of Article 74 of the Republic of Lithuania’s Law on Electricity (wording of 17 January 2012; Official Gazette Valstybės žinios, 2012, No. 17-752).

3. To recognise that Item 16.4 of the Description of the Procedure for the Administration of Funds Raised from Public Interest Services in the Electricity Sector, as approved by the Resolution of the Government of the Republic of Lithuania (No. 1157) “On the Approval of the Description of the Procedure for the Administration of Funds Raised from Public Interest Services in the Electricity Sector” of 19 September 2012 (Official Gazette Valstybės žinios, 2012, No. 113-5704), insofar as the funds for the specified public interest services must be paid by those persons who, for their economic needs, use the electricity produced by them through the use of cogeneration (in combined heat and power generation plants) and, at the same time, are electricity customers was not in conflict with the Constitution of the Republic of Lithuania and with Paragraph 48 of Article 2 and Paragraphs 5 and 6 of Article 46 of the Republic of Lithuania’s Law on Electricity (wording of 17 January 2012; Official Gazette Valstybės žinios, 2012, No. 113-5704).

This ruling 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