Opinion of the Advocate General — ECLI:EU:C:2026:97
Date: 2026-02-12
Language of the case: Latvian

Translation C-722/24 – 1 
Case C-722/24 
Request for a preliminary ruling 
Date lodged: 
23 October 2024 
Referring court: 
Augstākā tiesa (Senāts) (Latvia) 
Date of the decision to refer: 
23 October 2024 
Applicant at first instance and appellant in cassation: 
SIA Elektro bizness 
Defendant: 
Sabiedrisko pakalpojumu regulēšanas komisija (Public Utilities 
Regulatory Commission, Latvia) 
  
[…] 
Latvijas Republikas Senāts (Supreme Court (Senate), Latvia) 
DECISION 
Riga, 23 October 2024 
The Senate […] [composition of the court and representatives of those appearing 
at the hearing] 
has examined the appeal in cassation brought by SIA Elektro bizness against the 
judgment delivered on 8 July 2022 by the Administratīvā apgabaltiesa (Regional 
Administrative Court) in the judicial review proceedings instituted by way of the 
action brought by SIA Elektro bizness for a declaration as to the illegality of 
Decision No 65 of the Public Utilities Regulatory Commission (‘the Regulator’) 
of 10 June 2021, and for the adoption of a favourable administrative measure. 
Background 
Statement of the facts 
EN 
REQUEST FOR A PRELIMINARY RULING OF 23. 10. 2024 – CASE C-722/24 
 
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1 This case concerns a dispute between the applicant, SIA Elektro bizness, and the 
Public Utilities Regulatory Commission, concerning the applicant’s right to 
construct a direct electricity line connecting a 20-kilovolt underground cable line 
owned by the applicant to the premises of a customer that is an agency of the 
Municipality of Ogre by the name of Ogres komunikācijas (‘the customer’). 
2 The applicant’s business activities consist in the generation of electricity in a 
cogeneration plant and trading in electricity. The applicant generates electricity in 
its own cogeneration plant, situated at 21 Upes prospekts Street, Ogre. The 
applicant’s cogeneration plant is connected to a 7.6 km-long, 20-kilovolt 
underground cable electricity line owned by the applicant (‘the contested cable 
line’). The contested cable line was constructed, and the applicant purchased it 
and connected it to its cogeneration plant, before the entry into force in 2005 of 
the Elektroenerģijas tirgus likums (Law on the Electricity Market, Latvia). 
The electricity generated at the cogeneration plant is transmitted by the applicant 
via the contested cable line to the distribution network infrastructure of the 
distribution network operator, the limited liability company Sadales tīkls (‘the 
Sadales tīkls network’). At the same time, the applicant uses the contested cable 
line to supply electricity to six industrial customers already connected to the 
contested cable line to which the applicant supplies electricity directly, that is to 
say without the intermediation of the Sadales tīkls network. 
In 2021, the applicant applied to the Regulator for authorisation to deploy a direct 
line, that is to say to deploy an electricity line of approximately 400 metres in 
length that would connect the contested cable line to the customer’s premises (‘the 
proposed line’), so that the applicant could supply the customer with electricity 
generated at its cogeneration plant. The applicant stated that, if the proposed line 
were deployed, the customer would be disconnected from the Sadales tīkls 
network (become an ‘isolated customer’) and would purchase electricity directly 
from the applicant. The applicant thus wishes to use the contested cable line, 
which it owns, to connect itself to another customer to which it would supply 
generated electricity without the intermediation of the Sadales tīkls network. 
By Decision No 65 of 10 June 2021, the Regulator’s board refused to grant 
authorisation for deployment of the direct line. The Regulator based that decision 
on several considerations, including the fact that the line proposed by the 
applicant would not be a direct line for the purposes the Law on the Electricity 
Market, because it would connect the customer to an electricity transmission 
facility (the contested cable line) rather than to an isolated generation site (the 
facility where the electricity is generated, that is to say the applicant’s 
cogeneration plant […]). 
Not concurring with the Regulator’s decision, the applicant appealed to the 
[Administratīvā apgabaltiesa (Regional Administrative Court)] and sought a 
declaration as to the illegality of the aforementioned decision and an order 
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requiring the Regulator to adopt an administrative measure granting it a direct line 
authorisation to deploy the proposed line. 
3 That action was dismissed by judgment of the Administratīvā apgabaltiesa 
(Regional Administrative Court). [The Administratīvā apgabaltiesa (Regional 
Administrative Court)] takes the view that most of the Regulator’s considerations 
are incorrect, but agreed with the Regulator that [the application for authorisation 
for] deployment of the line proposed by the applicant must be rejected on the 
ground that it would not directly connect the customer to the electricity generation 
site (the applicant’s cogeneration plant […]). [The Administratīvā apgabaltiesa 
(Regional Administrative Court)] noted that a direct line is an electricity line 
connecting an isolated customer to an isolated generation site. After examining the 
graphic representation, submitted by the applicant, of the location of the proposed 
line, [the Administratīvā apgabaltiesa (Regional Administrative Court)] found 
that, since the electricity line to be deployed would not start from […], where the 
applicant’s cogeneration plant is located, but from the contested cable line, it 
would connect the customer to the contested cable line rather than directly to the 
cogeneration plant. [The Administratīvā apgabaltiesa (Regional Administrative 
Court)] considers that the contested cable line cannot be regarded as a generation 
site because it is used to transmit generated electricity rather than to generate 
electricity. For that reason, [the Administratīvā apgabaltiesa (Regional 
Administrative Court)] considers that the Regulator was justified in not granting 
the direct line authorisation for deployment of the line proposed by the applicant.  
4 The applicant lodged an appeal in cassation by which it objected to the conclusion 
of [the Administratīvā apgabaltiesa (Regional Administrative Court)] that the 
obstacle to obtaining the direct line authorisation is the fact that the line proposed 
by the applicant would connect the customer to the contested cable line owned by 
the applicant. The applicant emphasised that an electricity line which is owned by 
an electricity producer and via which generated electricity is transmitted for 
supply to direct customers and to the Sadales tīkls network forms an integral part 
of the operation of the cogeneration plant and must therefore be regarded as being 
part of the generation site. In this regard, the applicant referred to Article 9.1(2) of 
the Enerģētikas likums (Law on Energy, Latvia), which provides that a 
cogeneration plant is formed of one or more cogeneration facilities the operation 
of which is ensured by, inter alia, the infrastructure for the transmission of 
generated electricity. 
At the hearing, the applicant further noted that the purpose of a direct line is to 
make it possible for an electricity producer to supply the energy it generates 
directly to a customer, that is to say to supply energy to a customer without the 
intermediation of the Sadales tīkls network. For that reason, the applicant submits, 
it is irrelevant whether the line proposed by a producer connects a customer 
directly to the site where the electricity is generated or to an electricity line that is 
owned by the producer and is already used to transmit generated electricity from 
the generation site. It states that the only relevant factor is whether the proposed 
line, together with the electricity line that is already in place and is owned by the 
REQUEST FOR A PRELIMINARY RULING OF 23. 10. 2024 – CASE C-722/24 
 
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producer, would ensure the supply of electricity from the producer to a customer 
without the need to use the Sadales tīkls network. 
5 In its observations on the appeal in cassation, the Regulator noted that energy 
generation, on the one hand, and the transmission or distribution of energy, on the 
other, are different activities and an electricity line used to transmit electricity 
cannot therefore be regarded as an electricity generation site for the purposes of 
the concept of a direct line. The Regulator further noted that, in accordance with 
Article 9.1(4) of the Law on Energy, cogeneration facilities located at a single 
postal address are to be regarded as a single cogeneration plant.  
At the hearing, the Regulator’s representative also explained that it is unusual for 
an electricity producer to own a 20-kilovolt cable line that extends several 
kilometres beyond the boundaries of the generating station’s postal address. In this 
case, that situation arose because the applicant acquired ownership of the 
contested cable line before the entry into force of the Law on the Electricity 
Market. It is for this reason that the applicant is allowed to own that cable line and 
use it to supply electricity to six customers already connected to the contested 
cable line. According to the Regulator’s representative, however, the current 
situation means, in essence, that the applicant’s contested cable line is being used 
as a small distribution network, despite the fact that the applicant does not hold a 
distribution network operator’s licence. According to the Regulator’s 
representative, the establishment of direct lines is not intended to create a 
distribution network owned by a producer. Consequently, the Regulator’s 
representative asserts, only an electricity line which directly connects a customer 
to an electricity generation site may be regarded as a direct line. 
Legal bases 
Applicable legislation 
European Union law 
6 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) (‘Directive 2019/944’): 
Article 2 Definitions 
(41) ‘direct line’ means either an electricity line linking an isolated generation 
site with an isolated customer or an electricity line linking a producer and an 
electricity supply undertaking to supply directly their own premises, subsidiaries 
and customers[.] 
Article 7 Direct lines 
1. Member States shall take the measures necessary to enable: 
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(a) all producers and electricity supply undertakings established within their 
territory to supply their own premises, subsidiaries and customers through a direct 
line, without being subject to disproportionate administrative procedures or costs; 
(b) all customers within their territory, individually or jointly, to be supplied 
through a direct line by producers and electricity supply undertakings. 
2. Member States shall lay down the criteria for the grant of authorisations for 
the construction of direct lines in their territory. Those criteria shall be objective 
and non-discriminatory. 
Latvian law 
7 Law on the Electricity Market (adopted on 5 May 2005; available at: 
https://likumi.lv/ta/id/108834-elektroenergijas-tirgus-likums): 
Article 1 Terms used in this Law 
(29) direct line: a direct electricity line linking an electricity generation site with 
an isolated customer, or an electricity line linking an isolated electricity producer 
and a trader which supplies directly to premises in its ownership or possession, to 
affiliated undertakings and to its own customers; 
Article 25 Deployment of lines 
1. […] 
2. The distribution system operator shall be entitled to deploy a distribution 
line in the area covered by its licence. 
3. A person other than the distribution system operator shall be entitled to 
deploy a distribution line in the area covered by the distribution system operator’s 
licence in the event that the line to be constructed is: 
(1) A direct line; […] 
Article 26 Direct line 
1. The producer shall be entitled to supply electricity to customers or to its own 
premises through a direct line connection. 
2. The authorisation to deploy the direct line connection shall be issued by the 
Regulator. The Regulator shall lay down objective and uniform criteria in 
accordance with which the authorisation for the deployment of a direct line 
connection shall be issued. 
Reasons why there are doubts as to the interpretation of the EU legislation 
REQUEST FOR A PRELIMINARY RULING OF 23. 10. 2024 – CASE C-722/24 
 
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8 It falls to be decided here whether the line proposed by the applicant, given that it 
is to be deployed in order to connect the customer to the contested cable line 
rather than directly to the location of the applicant’s cogeneration plant, is to be 
regarded as constituting a direct line for the purposes of the electricity market 
legislation. 
9 In the present case, the electricity line which the applicant wishes to deploy would 
be situated in the area covered by the licence held by the distribution network 
operator (the limited liability company Sadales tīkls). In accordance with 
Article 25(3) of the Law on the Electricity Market, a person other than the 
distribution network operator is to be entitled to deploy a distribution line in the 
area covered by the distribution network operator’s licence if the line to be 
deployed is a direct line or an internal line. Article 26 of that Law, which governs 
the deployment of direct lines, provides that the producer is to be entitled to 
supply electricity to customers or to its own premises by means of a direct line 
connection. The definition of direct line is contained in point 29 of Article 1 of the 
aforementioned Law, which provides in particular that a direct line is an 
electricity line linking an isolated electricity generation site with an isolated 
customer. 
In the light of the foregoing legislation, the applicant considers that a direct line is, 
in essence, an electricity line which allows a producer to supply electricity to a 
customer without the intermediation of the Sadales tīkls network. Consequently, 
the applicant submits, a line connecting a customer to an electricity transmission 
facility owned by a producer may also be regarded as a direct line, provided that 
this allows a producer to supply electricity to a customer without the 
intermediation of the Sadales tīkls network. For its part, the Regulator considers 
that direct lines are confined to electricity lines which immediately connect a 
customer specifically to an electricity generation site, that is to say to a facility 
where electricity is generated. For the Regulator, the decisive factor is specifically 
whether the electricity line in question would lead from an electricity generation 
site directly to a customer. 
The parties to the dispute thus have a conceptually different view of the kind of 
electricity line that may be regarded as constituting a direct line and, in order to 
dispose of the present case, the Senāts (Senate) must ascertain whether the line 
proposed by the applicant is to be regarded as constituting a direct line. 
10 The provisions of the Law on the Electricity Market mentioned in the previous 
paragraph transpose the provisions of Directive 2019/944 concerning direct lines 
(point 41 of Article 2 and Article 7 of that directive). Consequently, the rules on 
the deployment of direct lines contained in the aforementioned Law must be 
consistent with that directive, meaning that the nature of the concept of ‘direct 
line’ as employed in the aforementioned Law must be clarified in the light of the 
provisions of Directive 2019/944. 
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Since point 41 of Article 2 of Directive 2019/944, concerning the concept of 
‘direct line’, does not contain any reference to national law so far as concerns the 
meaning to be given to that concept, ‘direct line’ must be regarded as constituting 
an independent concept of EU law that must be applied uniformly in all Member 
States. 
On examination of Article 7(1) of Directive 2019/944 in conjunction with 
recital 11 thereof (in which it is noted that only a fully open internal market which 
enables all consumers freely to choose their suppliers and all suppliers freely to 
deliver to their customers is compatible with the free movement of goods, the 
freedom of establishment and the freedom to provide services), and in the light of 
the objective defined in Article 1 of the same directive (see also, by way of 
comparison, the judgment given by the Court of Justice of the European Union on 
19 December 2019 in Engie Cartagena, Case C-523/18, EU:C:2019:1129, 
paragraphs 47 and 48), the impression emerges that the objective of the legislation 
is in particular to promote the possibility for producers to supply electricity to 
customers, including via direct lines, if a producer and a customer so wish. This 
suggests that the essential purpose of the direct line might be to allow a producer 
to supply electricity to a customer directly, that is to say without the 
intermediation of the distribution network operator’s networks. If that is the case, 
it may be acceptable for a customer and a generation site to be linked by the 
deployment of an electricity line connecting that customer to a pre-constructed 
electricity transmission facility owned by the producer, even if the connection site 
is outside the energy generation site, provided that this makes it possible to supply 
a customer with electricity from the generation site without using the distribution 
network operator’s networks. 
However, the definition of direct line contained in point 41 of Article 2 of the 
aforementioned directive is not manifestly clear, because the text of that provision 
does not indicate which type of link must connect a customer to a generation site 
(that is to say, whether a direct line may be formed only of an electricity line 
leading from the customer to the energy generation site itself or, conversely, 
whether the link between an energy generation site and a customer might also be 
made up of several interconnected electricity lines, in so far as the supply of 
electricity via those lines takes place without the intermediation of the distribution 
network operator’s networks). Neither does that provision clarify the meaning of 
isolated generation site: that is to say, whether that concept includes not only a 
collection of electricity generation facilities located at a single postal address but 
also the associated infrastructure for transmitting generated energy that is owned 
by the producer (electricity lines), even if that infrastructure is located outside the 
location (postal address) of the electricity generating station. The aforementioned 
legal provision simply states that a direct line is an electricity line linking an 
isolated generation site with an isolated customer, an explanation which could be 
construed as meaning that a direct line is a type of electricity line deployed from 
the customer directly to the electricity generation site. This construction is also 
suggested by the concept employed in the English-language version of the 
directive (isolated generation site). 
REQUEST FOR A PRELIMINARY RULING OF 23. 10. 2024 – CASE C-722/24 
 
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11 In the light of the considerations set out in the foregoing paragraphs, the Senāts 
(Senate) takes the view that this case calls for an interpretation of the provisions of 
Directive 2019/944 that can be used in the application of the Law on the 
Electricity Market. As the interpretation of the relevant provisions of EU law is 
not unequivocally clear and those provisions have not as yet been interpreted by 
the Court of Justice of the European Union in its case-law, the Senāts (Senate) 
considers it necessary to make a reference to the Court of Justice of the European 
Union for a preliminary ruling on whether an electricity line such as that which 
the applicant proposes to deploy is consistent with the concept of direct line for 
the purposes of Directive 2019/944. 
[…] [procedural formula] 
Operative part 
In accordance with Article 267 of the Treaty on the Functioning of the European 
Union, […] the Senāts (Senate) 
hereby decides 
To refer the following questions to the Court of Justice of the European Union for 
a preliminary ruling: 
For the purposes of point 41 of Article 2 of 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): 
(a) Must the concept of ‘isolated generation site’ used in that provision be 
construed as also including an electricity line owned by a producer, connected to a 
generating station, intended to transmit generated electricity and extending beyond 
the boundaries of the location (postal address) of the generating station? 
(b) Does the definition of ‘direct line’ contained in that provision include an 
electricity line connecting a customer to an electricity generation site 
(cogeneration plant) through the deployment of a connection to a pre-constructed 
electricity line owned by a producer and intended to transmit electricity, if this has 
the result of ensuring the supply of electricity from the producer to the customer 
without the intermediation of the distribution network operator’s network? Would 
it have any bearing on the answer to this question if the pre-constructed electricity 
line owned by the producer and intended to transmit electricity, to which the 
proposed line would be connected in order to reach the new customer, were 
already being used to supply electricity to other customers?  
To stay the proceedings pending the ruling of the Court of Justice of the European 
Union. 
[…] [non-appealability] 
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[…] [signatures]