# C_2022482EN.01002201.xml

| 19.12.2022 | EN | Official Journal of the European Union | C 482/22 |
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19.12.2022

EN

Official Journal of the European Union

C 482/22

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Action brought on 23 September 2022 — RH and Others v Commission

(Case T-596/22)

(2022/C 482/31)

Language of the case: English

Parties

Applicants: RH, RI, RJ, RK, RL (represented by: P. Holtrop, lawyer)

Defendant: European Commission

Form of order sought

The applicants claim that the Court should:

| — | annul Commission Decision of 8 June 2022, C (2022) 3942 final, State aid SA. 102454 (2022/N) — Spain and SA. 102569 (2022/N) — Portugal — concerning the production cost adjustment mechanism for the reduction of the electricity wholesale price in the Iberian market, |
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annul Commission Decision of 8 June 2022, C (2022) 3942 final, State aid SA. 102454 (2022/N) — Spain and SA. 102569 (2022/N) — Portugal — concerning the production cost adjustment mechanism for the reduction of the electricity wholesale price in the Iberian market,

| — | order the Commission to pay the costs of proceedings. |
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order the Commission to pay the costs of proceedings.

Pleas in law and main arguments

In support of the action, the applicants rely on five pleas in law.

| 1. | First plea in law, alleging that the Commission has committed an error in fact: and has failed to appreciate the functioning of the national state aid measure.
  The Commission did not properly understand the functioning of the measure in the Real Decreto-Ley 10/2022. (1) In the Commission’s analysis in the contested Decision, it is not clear that the Commission is aware that the exemption for hedged electricity supplies does not cover all of the possible hedges, since in some paragraphs it refers to it applying to wholesale market participants while in other it is considered to affect any hedge. This results in the Commission not taking into account the position of the applicants and, wrongly, concluding that the state aid scheme complies with EU law. |
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1.

First plea in law, alleging that the Commission has committed an error in fact: and has failed to appreciate the functioning of the national state aid measure.

The Commission did not properly understand the functioning of the measure in the Real Decreto-Ley 10/2022. (1) In the Commission’s analysis in the contested Decision, it is not clear that the Commission is aware that the exemption for hedged electricity supplies does not cover all of the possible hedges, since in some paragraphs it refers to it applying to wholesale market participants while in other it is considered to affect any hedge. This results in the Commission not taking into account the position of the applicants and, wrongly, concluding that the state aid scheme complies with EU law.

| 2. | Second plea in law, alleging that the measure in the Real Decreto-Ley 10/2022 is not appropriate nor proportionate:






  — | although the state aid mechanism is well targeted to achieve its objective other less disruptive means to accomplish its goal could have been used that would not have impacted negatively the applicants’ position in the market; |
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2.

Second plea in law, alleging that the measure in the Real Decreto-Ley 10/2022 is not appropriate nor proportionate:

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although the state aid mechanism is well targeted to achieve its objective other less disruptive means to accomplish its goal could have been used that would not have impacted negatively the applicants’ position in the market;

| — | also, they would have prevented disruptions that are a consequence of the aid scheme, such as putting the applicants at a disadvantage to market competitors with different energy supply structures or the possibility of allocating a windfall profit to a company, with whom the applicants have hedged part of their electricity consumption, and their clients. |
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also, they would have prevented disruptions that are a consequence of the aid scheme, such as putting the applicants at a disadvantage to market competitors with different energy supply structures or the possibility of allocating a windfall profit to a company, with whom the applicants have hedged part of their electricity consumption, and their clients.

| 3. | Third plea in law, alleging that the measure in the Real Decreto-Ley 10/2022 does not comply with Article 10 of Regulation (EU) 2019/943 of the European Parliament and of the Council (2) and Article 5 of Directive 2019/944 of the European Parliament and of the Council: (3)







  — | the state aid scheme does not comply with the exceptions to free price formation in Article 5(2) of Directive 2019/944 because other less harmful measures could have been taken; |
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3.

Third plea in law, alleging that the measure in the Real Decreto-Ley 10/2022 does not comply with Article 10 of Regulation (EU) 2019/943 of the European Parliament and of the Council (2) and Article 5 of Directive 2019/944 of the European Parliament and of the Council: (3)

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the state aid scheme does not comply with the exceptions to free price formation in Article 5(2) of Directive 2019/944 because other less harmful measures could have been taken;

| — | moreover, the measure results in disproportionate additional costs to the applicants that, according to the following ground, are discriminatory. |
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moreover, the measure results in disproportionate additional costs to the applicants that, according to the following ground, are discriminatory.

| 4. | Fourth plea in law, alleging discrimination:






  — | not including all the hedges under the exemption from the adjustment mechanism is discriminatory. The criteria of exclusion are not relevant, since both wholesale market buyers and other market operators are able to sign similar hedges and have equivalent energy supply contractual structures; |
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4.

Fourth plea in law, alleging discrimination:

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not including all the hedges under the exemption from the adjustment mechanism is discriminatory. The criteria of exclusion are not relevant, since both wholesale market buyers and other market operators are able to sign similar hedges and have equivalent energy supply contractual structures;

| — | moreover, the discrimination is even more important because these similarities are the result of the liberalisation of the sector under EU law. The applicants are not aware of any justification of this discrimination, but consider that it is unlikely that any explanation will be proportionate. |
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moreover, the discrimination is even more important because these similarities are the result of the liberalisation of the sector under EU law. The applicants are not aware of any justification of this discrimination, but consider that it is unlikely that any explanation will be proportionate.

| 5. | Fifth plea in law, alleging that the Commission breached the applicants’ legitimate expectations.
  The applicants had behaved accordingly with the directions and incentives of the European Institutions and especially the Commission. Thus, they acted as active and environmentally conscious consumers and signed a hedge with an enterprise different from their energy supplier, which ensured that all the electricity that they used came from a renewable source. However, the Commission breached that expectation and authorised a measure that penalised them for having engaged in such an energy supply contractual structure. |
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5.

Fifth plea in law, alleging that the Commission breached the applicants’ legitimate expectations.

The applicants had behaved accordingly with the directions and incentives of the European Institutions and especially the Commission. Thus, they acted as active and environmentally conscious consumers and signed a hedge with an enterprise different from their energy supplier, which ensured that all the electricity that they used came from a renewable source. However, the Commission breached that expectation and authorised a measure that penalised them for having engaged in such an energy supply contractual structure.

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(1)  Real Decreto-ley 10/2022, de 13 de mayo, por el que se establece con carácter temporal un mecanismo de ajuste de costes de producción para la reducción del precio de la electricidad en el mercado mayorista (Royal Decree Law 10/2022 of 13 May temporarily establishing a mechanism for adjusting production costs to reduce the price of electricity in the wholesale market).

(2)  Regulation (EU) 2019/943 of the European Parliament and of the Council of 5 June 2019 on the internal market for electricity (recast) (OJ 2019 L 158, p. 54).

(3)  Directive (EU) 2019/944 of the European Parliament and of the Council of 5 June 2019 on common rules for the internal market for electricity and amending Directive 2012/27/EU (recast) (OJ 2019 L 158, p. 125).

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