Explaining the Commission’s decision on our complaint against the electricity tax

After the numerous reactions, comments and congratulations we have received after the decision by the European Commission to open a file against Spain following the complaint filed by Holtrop S.L.P. in representation of the Platform for a New Energy Model against Spain's new electricity tax, we would like to further explain what this step means.

Infringement Proceedings

The European infringement proceeding is regulated by European Law and it works quite differently from any national law procedure. That is why terms like "admission" cannot be understood the same way as in national law and paralelisms barely can be made.

Once the complaint is presented and amitted, a three-phase procedure begins:

(1) Information Phase, where the Commission asks a State to inform about the complaint's object..

(2) Pre-Contentious Phase: which is itself composed of two steps: (1) letter of formal notice; (2) motivated opinion

(3) Contentious Phase: where the Commission brings the Member State before the Court of Justice and it decides whether there has been a breach of EU law or not.

Where are we now?

At the beggining of 2013 we presented three complaints against Spain because of different breaches in renewables legislation, which were admittted on 14th June 2013. Then, 15th July 2013, we had a meeting with several officials from the legal services of the Commission to inform them about our complaints in person.

Finally on 26th August 2013, the Commission informed us that it has submitted a demand for information to Spain in relation to the second complaint we presented, where we argue that the tax to electric generation established by Law 15/2012 is discriminatory, contraty to the principle of legitimate expectations and it constitutes a state aid contrary to EU competition law.

Therefore, we are now at the first phase of the proceedure, which is the informative one. Spain has from now ten weeks to answer to the Commission's demand through the EU-Pilot system. If it is not satisfied by the anwser, procedure will move on to the next phase.

The Commission's decision in perspective

In order to grasp the importance of the step we have just achieved and to be aware of our chances to reach our objective (that the tax is modified, be it by a Commission's requiremen of by a CJEU judgment), we will have a look at the statistics on infringement proceedings for 2011, last year where data are available.

In 2011 3.115 complaints were presented, of which 306 against Spain. Only in 619 the Commission decided to start the information phase, closing the rest of them. Thus, we have surmonted a fist big hurdle! Then, looking at the EU-Pilot data (new and existing complaints), there were 700 demands for information, of which 508 were closed after the State's response because the Commission was satisfied with it.

Regarding to the second phase (considering complaints and Commission's actions), we see that out of 461 procedures, 203 were closed after the notice letter, 167 after the motivated opinion and 29 were removed from the Court of Justice. As a result, only 62 cases reached a Court's judgment, of which 53 were favorable to the Commission's position, declaring that infringement had taken place. 

We are aware that infringement proceedings are difficult and full of hurdles, but this first steps shows we are on the correct path. Even if we do not know the end, the Commission's decision will already have two important effects. Firts, it will help us in order for our position to be listened by attorneys, state lawyers and judges. Second, because the Government, which is now adopting new retroactive cuts to renewables, will now think twice before modifying the renewables regime. 

And in any case, we have to bear in mind that our main objective is to reach the EU court in Luxemburg. There are two ways to get there. One is through the Commission, which is the most difficult one, because the Commission is a political organ and it has discretionary powers. The other, much more habitual, passes through the courts in Madrid, by a question for a preliminary ruling presented by Spanish judges. In order to try this second, we have 7 proceedings pending before Spanish Courts against different renewables provisions where we have argued that judges must refer prejudicial question for a preliminary ruling to Luxembourg, in order for the Court of Justice of the EU, as the competent court, can determine how EU law is to be interpreted and whether Spanish cuts to renewable are in conformity with EU law.