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On dismissing legal proceedings in a case

Case No. 34/2011

 THE CONSTITUTIONAL COURT OF THE REPUBLIC OF LITHUANIA

 DECISION

ON THE DISMISSAL OF THE LEGAL PROCEEDINGS IN THE CASE SUBSEQUENT TO THE PETITION OF A GROUP OF MEMBERS OF THE SEIMAS OF THE REPUBLIC OF LITHUANIA, THE PETITIONER, REQUESTING AN INVESTIGATION INTO THE COMPLIANCE OF PARAGRAPH 41 (WORDING OF 22 DECEMBER 2009) OF ARTICLE 2 OF THE REPUBLIC OF LITHUANIA’S LAW ON ELECTRICITY WITH THE CONSTITUTION OF THE REPUBLIC OF LITHUANIA

 7 October 2014, KT42-S31/2014
Vilnius

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

The court reporter—Daiva Pitrėnaitė

The Constitutional Court of the Republic of Lithuania, in its procedural sitting, considered the petition (No. 1B-36/2011) of a group of members of the Seimas of the Republic of Lithuania, the petitioner, requesting an investigation into the compliance of Paragraph 41 (wording of 22 December 2009) of Article 2 of the Republic of Lithuania’s Law on Electricity with Paragraph 2 of Article 5 of the Constitution of the Republic of Lithuania and the constitutional principle of a state under the rule of law.

The Constitutional Court

has established:

  1. A group of members of the Seimas, the petitioner, has applied to the Constitutional Court with a petition requesting an investigation into whether Paragraph 41 (wording of 22 December 2009) of Article 2 of the Law on Electricity, insofar as it provides that the list of services of public interest, their providers, and the procedure for their provision are established by the Government or an institution authorised by it, taking account of public interests in the electricity sector, without establishing, in this law, clear and unambiguous criteria defining the public interests in the electricity sector and the services meeting public interests, is not in conflict with Paragraph 2 of Article 5 of the Constitution and the constitutional principle of a state under the rule of law.
  2. On the grounds of the 29 August 2011 ordinance (No. 2B-139) of the President of the Constitutional Court, subsequent to the said petition, the preparation of case No. 34/2011 for a hearing at the Constitutional Court began.

The Constitutional Court

holds that:

  1. In the case at issue, a group of members of the Seimas, the petitioner, impugns the compliance of Paragraph 41 (wording of 22 December 2009) of Article 2 of the Law on Electricity, insofar as it provides that the list of services of public interest, their providers, and the procedure for their provision are established by the Government or an institution authorised by it, taking account of public interests in the electricity sector, without establishing, in this law, clear and unambiguous criteria defining the public interests in the electricity sector and the services meeting public interests, with the Constitution.

1.1. On 20 July 2000, the Seimas adopted the Law on Electricity, under Item 5 of Article 3 of which one of the main objectives of this law is to ensure services of public interest which are related to public security, environmental protection, and electricity generation from local, renewable, and waste energy sources, as well as to establish objectively reasonable, clear, and transparent requirements and obligations in the electricity sector.

Paragraph 30 of Article 2 of the Law on Electricity (wording of 20 July 2000) prescribed: “‘Services of public interest’ means services in the electricity sector which shall be established by the Government of the Republic of Lithuania or an institution authorised by it, taking account of the interests of the public.”

1.2. On 1 July 2004, the Seimas adopted the Republic of Lithuania’s Law Amending the Law on Electricity, by means of which it amended the Law on Electricity (wording of 20 January 2000) and set it forth in its new wording. Under Item 5 of Article 3 of the Law on Electricity (wording of 1 July 2004), one of the main objectives of this law is to ensure services of public interest and establish objectively reasonable, clear, and transparent requirements and obligations in the electricity sector.

Paragraph 38 (wording of 1 July 2004) of Article 2 of the Law on Electricity prescribed: “‘Services of public interest’ means services provided by electricity enterprises, the list, providers, and provision procedure whereof shall be established by the Government or an institution authorised by it, taking account of public interests in the electricity sector.”

Under Paragraph 37 (wording of 1 July 2004) of Article 2 of the Law on Electricity, “public interests in the electricity sector” means any act or inaction in the electricity sector, directly or indirectly related to public security, environmental protection, and electricity generation from renewable energy sources in combined heat and power generation plants.

1.3. Later the Law on Electricity (wording of 1 July 2004) was amended and/or supplemented, inter alia, by the Republic of Lithuania’s Law Amending Articles 2, 5, 6, 10, 14, 22, 23, 24, 25, 28, 32, 36, 38, 39, 41, 43, 44, and 45 of the Law on Electricity and Supplementing the Law with Article 421; the latter was adopted by the Seimas on 22 December 2009.

After the adoption of the said law, Paragraph 37 (wording of 1 July 2004) of Article 2 of the Law on Electricity became Paragraph 40 of Article 2, whilst Paragraph 38 (wording of 1 July 2004) of Article 2 of the same law became Paragraph 41 of Article 2, however, the legal regulation established therein did not change.

Thus, a group of members of the Seimas, the petitioner, requests an investigation into whether Paragraph 41 (wording of 22 December 2009) of Article 2 of the Law on Electricity was not in conflict with the Constitution. The said paragraph prescribed: “‘Services of public interest’ means services provided by electricity enterprises, the list, providers, and provision procedure whereof shall be established by the Government or an institution authorised by it, taking account of public interests in the electricity sector.”

1.4. On 17 January 2012, the Seimas adopted the Republic of Lithuania’s Law Amending the Law on Electricity which came into force on 7 February 2012 (with a certain exception) and by means of which the Law on Electricity (wording of 1 July 2004) was amended and set forth in its new wording. Under Item 9 of Article 3 of the Law on Electricity (wording of 17 January 2012), one of the main objectives of this law is to establish the legal bases for services of public interest and objectively reasonable, clear, and transparent requirements and obligations in the electricity sector.

1.4.1. Paragraph 52 of Article 2 of the Law on Electricity (wording of 17 January 2012) prescribes: “‘Services of public interest’ means services provided by enterprises, the list, providers, and provision procedure whereof shall be approved by the Government of the Republic of Lithuania 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.”

Under Paragraph 51 of Article 2 of the said law (wording of 17 January 2012), “public interests in the electricity sector” means any act or inaction in the electricity sector, directly or indirectly related to the state’s 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, the diversification of energy sources, and other objectives of the sustainable development of the electricity sector which are provided for in this law.

1.4.2. The comparison of the regal regulation which is established in Paragraph 41 (wording of 22 December 2009) of Article 2 of the Law on Electricity and the investigation into the compliance of which with the Constitution is requested by a group of members of the Seimas, the petitioner, with the one established in Paragraph 52 of Article 2 of the Law on Electricity (wording of 17 January 2012) makes it clear that, by defining services of public interest, the new legal regulation refers not only to those public interests in the electricity sector that are consolidated by the regal regulation that has been amended as well, but also to the general requirements established in Article 74 of the Law on Electricity.

Article 74 “Provision of Services of Public Interest in the Electricity Sector” of the Law on Electricity (wording of 17 January 2012) prescribes:

“1. In order to implement the strategic objectives of the state’s energy, economic and environmental protection policies in the electricity sector and to ensure the implementation of the interests of the public, the Government, pursuant to the provisions of laws regulating the legal basis for the operation of this and other energy sectors, may establish that the following is classified as services of public interest in the electricity sector:

1) electricity generation from renewable energy sources;

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

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

4) the ensuring of reserves in the electricity system in the specified power plants, the operation of which is necessary in order to ensure the state’s energy security;

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 the state’s energy independence;

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

  1. Exclusively pursuant to Paragraph 1 of this Article, the Government shall approve the list of services of public interest in the electricity sector and establish the procedure for the provision of these services.
  2. The Government shall appoint the administrator of the funds of services of public interest in accordance with the procedure for appointing the administrator of the funds of services of public interest established by the Government.
  3. Taking account of public interests in the electricity sector and after assessing the activity of market participants, its nature, scope, and impact on the state’s overall electricity system, the Government or an institution authorised by it may oblige market participants to provide services of public interest in the electricity sector which are established in Paragraph 2 of this Article without discriminating against these market participants in respect of their rights or obligations.
  4. When approving the list of services of public interest in the electricity sector and establishing obligations to provide services of public interest, the criteria of economic rationale and the lowest cost and impact on the price of electricity for end-users must be followed.
  5. Market participants shall keep cost accounts for the provision of services of public interest separately by following the rules of accounting separation approved by the Commission.”

1.4.3. Thus, Paragraph 1 of Article 74 of the Law on Electricity (wording of 17 January 2012) specifies the services which, pursuant to the provisions of laws regulating the legal bases for the operation of this and other electricity sectors, may be classified by the Government as services of public interest in the electricity sector. Under Paragraph 2 of the said article, when approving the list of services of public interest in the electricity sector and establishing the procedure for the provision of these services, the Government must invoke exclusively the provisions of Paragraph 1 of the said article. In addition, Paragraph 5 of the same article consolidates the criteria (of economic rationale and the lowest cost and impact on the price of electricity for end-users) which must be followed when approving the list of services of public interest in the electricity sector and establishing obligations to provide services of public interest.

1.5. To sum up the discussed legal regulation, it should be noted that the Law on Electricity (wordings of 20 July 2000, 1 July 2004, and 17 January 2012) consolidated (consolidates) the legal bases for services of public interest in the electricity sector. It should also be noted that both, under the legal regulation, the compliance of which with the Constitution is impugned, and, under the legal regulation which has changed it and which is currently in force, the list of services of public interest, their providers, and the procedure for their provision are approved by the Government or an institution authorised by it. However, it should be noted that when, on 17 January 2012, the Law on Electricity was amended and set forth in its new wording, the legal regulation of services of public interest was amended, inter alia, by expressis verbis specifying, in the Law on Electricity itself, certain particular services which can be classified by the Government as services of public interest in the electricity sector. The aforesaid Law on Electricity also establishes certain criteria on the basis of which the list of these services is approved and the requirements to provide the aforesaid services are established.

  1. Paragraph 4 (wording of 11 July 1996) of Article 69 of the Law on the Constitutional Court provides that the annulment of the impugned legal act shall be the grounds to adopt a decision to dismiss the instituted legal proceedings. If this becomes clear before the beginning of the judicial hearing, the Constitutional Court shall decide this question in the deliberation room.

In its acts, the Constitutional Court has held on more than one occasion that the formulation “shall be the grounds <...> to dismiss the instituted legal proceedings” of Paragraph 4 of Article 69 of the Law on the Constitutional Court should be construed as establishing the Constitutional Court’s right, in cases when subjects other than courts, specified in Article 106 of the Constitution, have applied to the Constitutional Court, and the impugned legal act (part thereof) is no longer effective—it is judged to be no longer valid (annulled or amended) or its validity has ended, to dismiss the instituted legal proceedings by taking account of the circumstances of the case at issue (inter alia, the Constitutional Court’s rulings of 28 March 2006, 2 May 2012, and its decision of 5 July 2013).

As mentioned before, the legal regulation that is established in Paragraph 41 (wording of 22 December 2009) of Article 2 of the Law on Electricity and in respect of the compliance of which with the Constitution a group of members of the Seimas, the petitioner, has applied to the Constitutional Court was amended after the Law on Electricity was set forth in its new wording of 17 January 2012, i.e. Paragraph 41 (wording 22 of December 2009) of Article 2 of the Law on Electricity is no longer valid.

  1. In the light of the foregoing arguments, the instituted legal proceedings subsequent to the petition of a group of members of the Seimas, the petitioner, requesting an investigation into the compliance of Paragraph 41 (wording of 22 December 2009) of Article 2 of the Law on Electricity, insofar as it provides that the list of services of public interest, their providers, and the procedure for their provision are established by the Government or an institution authorised by it, taking account of public interests in the electricity sector, without establishing, in this law, clear and unambiguous criteria defining the public interests in the electricity sector and the services meeting public interests, with Paragraph 2 of Article 5 of the Constitution and the constitutional principle of a state under the rule of law, must be dismissed.

Conforming to Article 28 and Paragraph 4 of Article 69 of the Law on the Constitutional Court of the Republic of Lithuania, the Constitutional Court of the Republic of Lithuania adopts the following

decision:

To dismiss the instituted legal proceedings in case No. 34/2011 subsequent to the petition of a group of members of the Seimas of the Republic of Lithuania, the petitioner, requesting an investigation into the compliance of Paragraph 41 (wording of 22 December 2009) of Article 2 of the Republic of Lithuania’s Law on Electricity, insofar as it provides that the list of services of public interest, their providers, and the procedure for their provision are established by the Government or an institution authorised by it, taking account of public interests in the electricity sector, without establishing, in this law, clear and unambiguous criteria defining the public interests in the electricity sector and the services meeting public interests, with Paragraph 2 of Article 5 of the Constitution of the Republic of Lithuania and the constitutional principle of a state under the rule of law.

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

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