Opinion of the Advocate General — ECLI:EU:C:2026:384
Date: 2026-05-07
Language of the case: Dutch

Summary C-199/25 – 1 
Case C-199/25 
Summary of a request for a preliminary ruling pursuant to Article 98(1) of 
the Rules of Procedure of the Court of Justice 
Date lodged: 
11 March 2025 
Referring court: 
Hof van beroep te Brussel (Belgium) 
Date of the decision to refer: 
19 February 2025 
Applicants: 
Sibelgas CVBA 
Intercommunale Vereniging voor de Energiedistributie in de 
Kempen en het Antwerpse (IVEKA) 
Intercommunale Maatschappij voor Energievoorziening in West- en 
Oost-Vlaanderen (IMEWO) 
Intercommunale Maatschappij voor Gas en Elektriciteit van het 
Westen (GASELWEST) 
IVERLEK 
Intercommunale vereniging voor energieleveringen in Midden-
Vlaanderen (INTERGEM) 
Fluvius Antwerpen 
Fluvius West 
Fluvius Limburg 
Provinciale Brabantse energiemaatschappij (P.B.E.) 
Defendant: 
De Vlaamse Nutsregulator, anciennement de Vlaamse Regulator 
van de Elektriciteits-en Gasmarkt (VREG) 
EN 
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Subject matter of the main proceedings 
The applicants brought an application before the hof van beroep Brussel (Brussels 
Court of Appeal), the referring court, for the annulment of the „beslissing BESL-
2024-41 van de VREG met betrekking tot het vaststellen van de 
tariefmethodologie voor distributie elektriciteit en aardgas gedurende de 
reguleringsperiode 2025-2028” (‘decision BSEL-2024-41 of the VREG regarding 
the determination of the tariff methodology for the distribution of electricity and 
natural gas during the 2025-2028 regulatory period’). 
Subject matter and legal basis of the request 
The reference for a preliminary ruling under Article 267 TFEU concerns the 
interpretation of Article 18(1) of Regulation (EU) 2019/943 of the European 
Parliament and of the Council of 5 June 2019 on the internal market for 
electricity. 
It concerns, in particular, (1) the compatibility of a national (decretal) regulation 
which provides for the inclusion of the costs of public service obligations in the 
electricity distribution network tariffs with Article 18(1), second sentence, of that 
Regulation (non-coverage of unrelated costs) and (2) the compatibility of a tariff 
methodology for the distribution of electricity devised by a regulator which 
primarily uses a historical cost-trend method to estimate the efficient costs of 
distribution network operators, with Article 18(1), first sentence, of that 
Regulation (coverage of efficient costs). 
Questions referred for a preliminary ruling 
1. ‘Is Article 18(1), second sentence, of Regulation (EU)2019/943 of the 
European Parliament and of the Council of 5 June 2019 on the internal 
market in electricity (recast), to be interpreted as precluding a national rule 
such as Article 4.1.32, § 1, point 10 of the Vlaamse decreet van 8 mei 2009 
houdende algemene bepalingen betreffende het energiebeleid (Flemish 
Decree of 8 May 2009 laying down general provisions on energy policy) 
which provides that the costs of the public service obligations imposed by or 
pursuant to the Decree, which are not financed by taxes, duties, subsidies, 
contributions and levies, are to be included in the tariffs? 
2. Is Article 18(1), first sentence, of Regulation (EU) 2019/943 of the European 
Parliament and of the Council of 5 June 2019 on the internal market in 
electricity (recast), to be interpreted as precluding the devising by a 
regulatory authority of a tariff methodology for the distribution of electricity 
that, with regard to a significant component of the costs of network 
SIBELGAS AND OTHERS 
 
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operators subject to revenue regulation, uses a historical cost trend method 
(which determines revenues on the basis of past costs), per se, or is the 
application of this method to be supported by verification of the level of the 
historical costs with regard to their efficiency? 
3. If, on the basis of the answers to the questions set out above, the Brussels 
Court of Appeal were to come to the conclusion that the VREG is in breach 
of one or more of the obligations arising from the provisions cited in those 
questions, would it be able to temporarily maintain their effects in order to 
avoid legal uncertainty?’ 
Provisions of European Union law relied on 
Regulation (EU) 2019/943 of the European Parliament and of the Council of 
5 June 2029 on the internal market for electricity (recast) (‘the Electricity 
Regulation’): Article 18 (‘Charges for access to networks, use of networks and 
reinforcement’), paragraphs 1 and 2, and in particular paragraph 1 thereof. 
Regulation (EU) 2019/942 of the European Parliament and of the Council of 
5 June 2019 establishing a European Union Agency for the Cooperation of Energy 
Regulators (recast): Article 5(2). 
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) (‘the fourth Electricity Directive’). 
 Directive (EU) 2024/1788 of the European Parliament and of the Council of 
13 June 2024 on common rules for the internal markets for renewable gas, natural 
gas and hydrogen, amending Directive (EU) 2023/1791 and repealing Directive 
2009/73/EC (‘the third Gas Directive’). 
Directive 2012/27/EU of the European Parliament and of the Council of 
25 October 2012 on energy efficiency, amending Directives 2009/125/EC and 
2010/30/EU and repealing Directives 2004/8/EC and 2006/32/EC and Directive 
(EU) 2023/1791 of the European Parliament and of the Council of 13 September 
2023 on energy efficiency and amending Regulation (EU) 2023/955 (recast) 
(collectively: ‘Energy Efficiency Directives’). 
Provisions of European Union case-law relied on 
Judgment of 12 September 2024, Casino de Spa, C-741/22, EU:C:2024:732, 
paragraphs 52, 53 and 58-62 (regarding the temporary maintenance of the effects 
of national provisions that are contrary to EU law and the case-law cited) therein, 
namely, the judgments of 5 October 2023, Osteopathie Van Hauwermeiren, 
C-355/22, EU:C:2023:737, paragraphs 28, 30, 31 and the case-law cited therein; 
22 February 2022, RS (Effects of the judgments of a constitutional court), 
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C-430/21, EU:C:2022:99, paragraph 53 and the case-law cited therein; 
19 November 2009, Filipiak, C-314/08, EU:C:2009:719, paragraph 85, and 
5 October 2010, Elchinov, C-173/09, EU:C:2010:581, paragraph 30. 
Provisions of national law relied on 
(Flemish) Decree of 8 May 2009 laying down general provisions on energy 
policy, BS 7 July 2009 (‘the Energy Decree’), and, in particular, Article 4.1.32 
(„Richtsnoeren voor het opstellen van de tariefmethodologie”; ‘Guidelines for 
drawing up the tariff methodology’) and Articles 4.1.1, 4.1.3, 4.1.5, 4.1.29 to 
4.1.34. 
Tariefmethodologie (Tariff methodology) 2025-2028 (Decision BESL-2024-41 of 
the VREG of 21 June 2024). 
International case-law relied on 
College van Beroep voor het Bedrijfsleven (Nederland) (Supreme Administrative 
Court for Trade and Industry) (The Netherlands), 4 July 2023, 21/1171 et al (on 
the legality of the use of historical data by regulators) 
Succinct presentation of the facts and procedure in the main proceedings 
1 The applicants in the main proceedings are the Flemish distribution 
network operators (‘the DNOs’) appointed by the VREG to operate the electricity 
and natural gas distribution network in a given area in the Flemish Region. 
2 In accordance with the Energy Decree, DNOs can pass on the operating 
costs of the distribution networks to distribution network users (DNUs) within 
certain limits and conditions, in particular through distribution network tariffs. 
3 Since DNOs are legal monopolists, those tariffs are regulated, namely 
by the VREG, the defendant in the main proceedings. 
4 Distribution network tariffs are established in several steps. The first 
step is the determination by VREG of the tariff methodology, which is determined 
for a given regulatory period. 
5 By decision of 21 June 2024, the VREG determined the tariff 
methodology for distribution and natural gas for the 2025-2028 regulatory period 
(BESL-2024-41). 
6 Since becoming competent to do so (namely, since 2015) the VREG 
has always opted for a so-called revenue regulation model. The income that DNOs 
are allowed to bill to the DNUs to cover their costs through the network tariffs is 
composed of (1) a part, ‘permissible income for exogenous costs’, i.e. costs over 
SIBELGAS AND OTHERS 
 
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which the DNOs have no control and which cannot be squeezed by efficiency 
improvements (for example, transmission tariffs), and (2) a part, ‘permissible 
income for endogenous costs’. 
7 The endogenous costs are the costs that are reasonable and necessary 
for network and data management that the DNOs can influence, namely, 
depreciation costs, operational costs and cost of invested capital (in relation to the 
regulated asset base or RAB). 
8 The permitted income for endogenous costs is calculated on the basis 
of the level and evolution of costs incurred by the DNOs in a previous period (in 
this case, the period 2019-2023). 
9 That income is composed of a basic part and a number of additional 
endogenous items, which are added to or subtracted from the basic part. 
10 That calculation of the basic part is done in three steps. First, the x 
factor or historical cost trend is calculated on the basis of the evolution of the 
endogenous sector costs (the sum of the endogenous costs of all Flemish DNOs 
within the same regulated activity) over the last five available financial years 
(adjusted for current inflation). Second, the basic part of the permitted income for 
endogenous costs is adjusted annually by the estimated inflation of the following 
year (and corrected the following year according to actual inflation). Third, the 
VREG also applies an efficiency incentive called the ‘frontier shift’ or ‘‘x’ factor’. 
This ‘‘x’ factor’ is deducted from the ‘x factor’ and reduces the annual growth of 
the permitted income. 
11 The basic part of the permitted income for endogenous costs calculated 
in this way is increased or decreased by five additional endogenous items, namely, 
costs and revaluation capital gains (always an increase), correction for corporate 
income tax (always an increase), quality incentive (increase or decrease), 
advances and withdrawals of advances (increase or decrease) and the correction 
for the so-called Wyre capital gain, a capital gain on certain regulated assets 
(always a decrease). 
12 On 19 July 2024, the applicants brought an action before the referring 
court seeking the annulment of the VREG’s decision of 21 June 2024 (the 
‘contested decision’ or ‘contested tariff methodology’). 
13 According to the applicants, on the basis of that tariff methodology, they are 
granted too low a permissible income and therefore have to meet financial 
obligations which are unachievable. 
14 The applicants allege infringement of the decretal conditions of the Energy Decree 
(Article 4.1.30), the decretal guidelines of the Energy Decree (Article 4.1.32), the 
Fourth Electricity Directive (and the Third Gas Directive), the Energy Efficiency 
Directives, Article 18 of the Electricity Regulation (the principle of cost 
orientation) and various principles of good administration. 
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15 The defendant moves to dismiss the applicants’ claim, arguing, inter alia, that it is 
a policy-related criticism and that the provisions relied upon do not constitute a 
ground for annulment. 
The essential arguments of the parties in the main proceedings 
16 In the course of the proceedings, the defendant developed a new 
defence, important in the context of the reference for a preliminary ruling, namely, 
that the contested tariff methodology (including the part influenced by historical 
cost methods) is contrary to Article 18(1), second sentence, of the Electricity 
Regulation in so far as it allows the recharging of ‘unrelated costs supporting 
unrelated policy objectives’. 
17 Article 4.1.32, §1, of the Energy Decree stipulates that ‘the VREG […] [shall 
establish] the tariff methodology taking into account the following guidelines […] 
point 10: the costs of public service obligations [(‘PSOs’)] imposed by or pursuant 
to the Decree, which are not financed by taxes, duties, subsidies, contributions and 
levies, shall be included in the tariffs in a transparent and non-discriminatory 
manner after verification by the VREG’. 
18 According to the defendant, the majority of the social and ecological 
PSOs imposed on the DNOs are not related to distribution operations because they 
have social and ecological objectives. However, on the basis of the 
aforementioned provision of the Energy Decree, the defendant is  to include the 
cost of those obligations in the permitted income according to the tariff 
methodology, which results in ‘unrelated costs supporting unrelated policy 
objectives’ being passed on in the tariffs, and thus the tariff methodology is 
contrary to Article 18(1), second sentence, of the Electricity Regulation. The 
defendant proposes that a request should be submitted to the Court of Justice of 
the European Union for a preliminary ruling on the matter. 
19 The applicants, for their part, take the view that, according to Article 18 
of the Electricity Regulation, there are three types of tariffs, namely, tariffs for the 
connection to networks, for the use of networks and for related reinforcements, 
and that PSOs do not fall within any of them, so that Article 18 of the Electricity 
Regulation does not apply to them. 
20 In response to the question put to the parties by the referring court as to 
a possible infringement of Article 18(1) of the Electricity Regulation on account 
of the VREG’s predominant use of a historical cost trend method to estimate the 
efficient costs of the DNOs, the applicants submit that the use of historical costs 
(and of historical data in general) as a starting point for calculating tariffs (for 
example, via a trend methodology) is consistent with that provision provided that 
the historical costs or data, as the case may be, are representative of the costs of an 
efficient network operator in the regulatory period in which the tariff methodology 
or tariffs, as the case may be, will be applied. 
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21 In particular, when shock effects occur, for example a quadrupling of 
market interest rates, historical data are, according to the applicants, not a good 
predictor of the actual costs of an ‘efficient and structurally comparable network 
operator’ as referred to in Article 18(1), first sentence, of the Electricity 
Regulation. The applicants find support for this in a decision of the Nederlandse 
College van Beroep voor het Bedrijfsleven (Supreme Administrative Court for 
Trade and Industry, ‘the CBB’). 
22 According to the applicants, the latter court also held that, in order to 
comply with the principle of covering efficient costs, the efficient costs must in 
principle be remunerated within the same regulatory period. Thus, the use of 
historical costs cannot simply be justified by the argument that, if the costs in one 
regulatory period are not covered by the tariffs of that period, the deficit would be 
‘rectified’ in a subsequent period by the effect of a trend methodology. 
23 In light of the foregoing, the contested tariff methodology, in their 
view, is not only contrary to Article 18(2), but also to Article 18(1) of the 
Electricity Regulation. Indeed, that tariff methodology uses historical data despite 
the latter not being representative of the achievable costs of an efficient DNO in 
the period 2025-2028, without taking alternative measures, that limit the impact of 
using historical data to those costs for which they are still representative (for 
example, by limiting the trend methodology to ‘business as usual’ costs and, 
exceptionally, by reducing the ‘frontier shift’ or ‘‘x’ factor’ to 0). 
24 The defendant argues, first, that Article 18(1) of the Electricity 
Regulation applies exclusively to electricity whereas the contested methodology 
concerns the calculation of network tariffs relating both to electricity and to 
natural gas. 
25 According to the defendant, a historical cost method is, in principle, 
consistent with Article 18(1) of the Electricity Regulation and there is no reason 
for the referring court to raise of its own motion a ground for challenge in that 
regard. Indeed, in a revenue regulation model, the total income is set high enough 
to cover all the costs of the DNO as well as to provide for a profit margin. 
26 The cost-recovery nature of the total income is not a mere presumption, 
but an element that, in the context of the contested tariff methodology, and was 
verified through the application of a financial model (which, unlike a historical 
cost method, is forward-looking and tested in 14 different scenarios). According 
to the defendant, a look to the past also confirms that, since the first application of 
revenue regulation by the VREG in 2015 to the present day, the total income 
(always co-determined using a historical cost method) has always been more than 
high enough to cover all costs (and still allow for a profit margin). 
27 The contested tariff methodology uses representative past costs in the 
context of determining an achievable total income. Several measures are taken as 
‘safeguards’ (to nuance the historical nature of the methodology, and take into 
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account the future), including the historical cost trend, the adjustment for inflation, 
the annual revision of the WACC and the advance payment scheme. 
28 The defendant is not aware of any better information to forecast income 
than the information held by the DNOs regarding their latest costs and cost trends, 
as proposed in the contested tariff methodology. According to the VREG, the 
historical information is objective and cannot be manipulated by regulated 
companies vis-à-vis the regulator, which has to contend with an information 
deficit. 
29 According to the defendant, this trend methodology based on actual 
costs from the recent past is also applied by the Autoriteit Consument en Markt 
(Dutch energy regulator, ‘ACM’). However, the applicants’ reference to the CBB 
ruling is not pertinent in this regard. 
Succinct presentation of the reasoning in the request for a preliminary ruling 
30 In the order for reference, the referring court focuses mainly on 
Article 18(1) of the Electricity Regulation, cited by the parties, which, in 
accordance with Article 288 TFEU, is binding in its entirety and directly 
applicable in every Member State. 
31 Under Article 18(1), second sentence, of the Electricity Regulation, network 
tariffs must ‘not include unrelated costs supporting of unrelated policy objectives’. 
32 The referring court notes that what the Regulation means by ‘unrelated policy 
objectives’ (‘d’autres objectifs stratégiques’ in the French version) is not defined. 
According to the court, at first glance this term seems to refer to anything that is 
not associated with the efficient development and operation of the networks 
themselves, such as, for example, the promotion of the use of renewable energy 
sources, through the compulsory purchase of green certificates and combined heat 
and power certificates. 
33 Since this is a question of interpretation of European Union law which also has 
potential consequences for other regulators, and since any infringement of the 
Regulation in the Flemish Region would have far-reaching consequences in that a 
basic part of the contested tariff methodology would then be unlawful and, 
according to the defendant, since devising a new methodology would take years, 
the referring court is of the view that it is necessary and appropriate to refer to the 
Court, as the defendant suggests, the question of whether ‘unrelated costs’ of 
PSOs which are not related to network operation and are passed on in the tariffs 
pursuant to a decretal provision in Belgium, are compatible with Article 18(1), 
second sentence, of the Electricity Regulation (first question referred for a 
preliminary ruling). 
34 Having regard also to the legal monopoly of the DNOs, the referring court 
considers that Article 18(1) of the Electricity Regulation is an issue of public 
SIBELGAS AND OTHERS 
 
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policy. The applicants agree, while the defendant argues that its possible public 
policy nature should apply to the entire provision, where appropriate. 
35 In light of that, the referring court asked the parties to also take a position on 
whether that provision is infringed by the VREG’s predominant use of a historical 
cost trend method to estimate the efficient costs of the DNOs. 
36 According to the referring court, the focus of the question is not on the cost 
recovery requirement but rather on the efficiency requirement. In its view, the 
main objective of the Regulation and of any regulation of tariffs in monopolistic 
markets is to prevent prices from exceeding the level which would be reached in a 
competitive market. The question posed by the referring court is whether tariff 
regulation which has as its starting point the historical costs of the DNOs, with no 
apparent control over the efficiency of those costs, is actually and adequately 
consistent with that objective. 
37 Article 18(1) of the Electricity Regulation assumes that the network operator is 
reimbursed for its efficient costs (being costs that a notional efficient competitor 
in the position of the network operator would have to bear) through the tariffs. 
38 The tariff methodology should result in the tariffs paid by DNUs reflecting the 
expected efficient costs, including a reasonable rate of return. A reasonable rate of 
return is one that is customary in economic practice. The methodology should also 
result in DNOs having sufficient scope and incentive to invest in effective quality, 
security of supply and sustainability. 
39 According to the referring court, while a certain use of historical empirical data by 
interested parties may be useful, the question arises as to whether tariff regulation 
that takes the historical costs of the DNOs as its starting point, with no apparent 
control over the efficiency of those costs, is actually and adequately consistent 
with the objective of the Electricity Regulation and, by extension, of any 
regulation of tariffs in monopolistic markets, namely, that prices should not rise 
above the level that would be reached in a competitive market. 
40 A pricing mechanism that fixes the permitted income of the DNOs for a given 
regulatory period on the basis of the level of costs incurred by them in the 
previous period, does not in itself lead to any control of costs. According to the 
referring court, the VREG’s methodology does not appear to exert any control 
over the justification and necessity of the costs incurred by the DNOs in the 
reference period. Therefore, the contested tariff methodology does not seem 
appropriate to establish that the DNOs may be inefficient and too expensive (and 
that excessive costs are passed on to the DNUs through excessively high tariffs). 
Even if there are good reasons for a pricing mechanism that takes as its starting 
point mainly the historical costs of the DNOs, it seems imperative to also test the 
level of those historical costs against an efficiency measure. 
41 In light of this, according to the referring court, the question arises whether the 
VREG’s methodology is compatible with the requirement in Article 18(1) of the 
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Electricity Regulation that the chargeable costs ‘correspond to those of an 
efficient and structurally comparable network operator’ (second question referred 
for a preliminary ruling). 
42 Article 4.1.34(4) of the Energy Decree gives the referring court the power to 
maintain permanently or provisionally the effects of an annulled VREG decision. 
However, that court must take into account the limitations arising from European 
Union law on the enforcement of the effects of national standards which must be 
annulled because they are contrary to that Union law. 
43 It must be borne in mind that only the Court may, in exceptional cases, on the 
basis of overriding considerations of legal certainty, allow the temporary 
suspension of the ousting effect of a rule of EU law with respect to national law 
that is contrary thereto. Such a restriction on the temporal effects of the 
interpretation of that law, made by the Court, may be granted only in the actual 
judgment ruling upon the interpretation requested (see the judgments in 
Osteopathy Van Hauwermeiren and Casino de Spa). 
44 According to the referring court, the parties make a plausible case that an 
unmodulated annulment would jeopardise legal certainty. The VREG argues that 
developing a new methodology would take at least two years. In the meantime, 
DNOs may have to continue funding their PSOs without being remunerated in 
return, which could jeopardise their solvency. Without maintaining the effects of 
the possibly annulled tariff methodology, there is also a risk that the past invoices 
of all DNUs will have to be corrected. Overriding considerations of legal certainty 
thus appear to require provisional enforcement. 
45 The referring court therefore requests the Court to be allowed to restrict the 
temporal effect of any intervening judgment (third question referred for 
preliminary ruling).