Judgment;Summary — ECLI:EU:C:2019:1129
Date: 2019-12-19
Language of the case: Spanish
Court formation: Fifth Chamber
Subject matter: Energy;Right of establishment;Approximation of laws;Freedom to provide services
Procedure: Reference for a preliminary ruling
Origin: Spain

Summary C-523/18 — 1 
Case C-523/18 
Summary of the request for a preliminary ruling pursuant to Article 98(1) of 
the Rules of Procedure of the Court of Justice 
Date lodged: 
8 August 2018 
Referring court: 
Audiencia Nacional (Spain) 
Date of the decision to refer: 
9 July 2018 
Applicant: 
Engie Cartagena, S.L. 
Defendant: 
Ministerio de Industria, Energía y Turismo 
  
Subject matter of the main proceedings 
Action for annulment of Orden IET/75/2014, de 27 de enero, por la que se regulan 
las transferencias de fondos, con cargo a las empresas productoras de energía 
eléctrica, de la cuenta específica de la Comisión Nacional de los Mercados y la 
Competencia al Instituto para la Diversificación y Ahorro de la Energía, en el año 
2013, para la ejecución de las medidas del Plan de Acción de Ahorro y Eficiencia 
Energética 2011-2020, y los criterios para la ejecución de las medidas 
contempladas en dicho plan (Ministerial Order IET/75/2014 of the Ministry of 
Industry, Energy and Tourism governing transfers of funds, payable by electricity 
generating undertakings, from the specific account of the National Markets and 
Competition Commission to the Institute for Diversification and Energy Saving in 
2013 for the implementation of measures under the Savings and Energy 
Efficiency Action Plan 2011-2020, and criteria for the implementation of the 
measures set out in that plan).  
EN 
SUMMARY OF THE REQUEST FOR A PRELIMINARY RULING — CASE C-523/18 
 
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Subject matter and legal basis of the request for a preliminary ruling 
The request concerns the compatibility of the third additional provision of Real 
Decreto-Ley (Royal Decree-Law) 14/2010 with Directives 2003/54/EC and 
2009/72/EC. The legal basis is Article 267 TFEU. 
Questions referred for a preliminary ruling 
1. Does the statutory provision laid down in the third additional provision of 
Real Decreto-Ley 14/2010 Financiación de planes de ahorro y eficiencia 
energética para los años 2011, 2012 y 2013 (Royal Decree-Law 14/2010 on 
the funding of savings and efficiency plans for the years 2011, 2012 and 
2013) constitute a public service obligation for the purposes of Article 3(2) 
of Directives 2003/54/EC and 2009/72/EC: 
‘1. The amounts payable from the electricity system for the purpose of 
funding the 2008-2012 Action Plan, approved [by] Acuerdo de Consejo de 
Ministros de 8 de julio de 2005, por el que se concretan las medidas del 
documento de «Estrategia de ahorro y eficiencia energética en España 2004-
2012» aprobado por Acuerdo de Consejo de Ministros de 28 de noviembre 
de 2003 (Decision of the Council of Ministers of 8 July 2005 giving 
concrete expression to the measures referred to in the document entitled 
“Savings and Energy Efficiency Strategy in Spain, 2004-2012”, approved by 
Decision of the Council of Ministers of 28 November 2003), forecast for the 
years 2011 and 2012 as EUR 270 million and EUR 250 million respectively, 
shall be financed through a contribution from each generating undertaking in 
the proportions set out in the following table: 
Undertaking Percentage 
Endesa Generación, S.A.  34.66 
Iberdrola Generación, S.A.  32.71 
GAS Natural S.D.G, S.A.  16.37 
Hidroeléctrica del Cantábrico, S.A.  4.38 
E.ON Generación, S.L.  2.96 
AES Cartagena, S.R.L.  2.07 
Bizkaia Energía, S.L.  1.42 
Castelnou Energía, S.L.  1.58 
Nueva Generadora del Sur, S.A.  1.62 
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Bahía de Bizkaia Electricidad, S.L.  1.42 
Tarragona Power, S.L.  0.81 
Total 100.00 
2. If that provision does actually constitute a public service obligation, is that 
obligation clearly defined, transparent, non-discriminatory and verifiable? 
Provisions of EU law relied on 
Directive 2003/54/EC of the European Parliament and of the Council of 26 June 
2003 concerning common rules for the internal market in electricity and repealing 
Directive 96/92/EC (OJ 2003 L 176, p. 37). Recitals 21 and 26. Articles 2(29) and 
3(2). 
Directive 2006/32/EC of the European Parliament and of the Council of 5 April 
2006 on energy end-use efficiency and energy services and repealing Council 
Directive 93/76/EEC (OJ 2006 L 114, p. 64). Recitals 5 and 6. Article 3(b) and 
(c). 
Directive 2009/72/EC of the European Parliament and of the Council of 13 July 
2009 concerning common rules for the internal market in electricity and repealing 
Directive 2003/54/EC (OJ 2009 L 211, p. 55). Article 3(2), (10) and (11). 
Judgment of 20 April 2010, Federutility and Others, C-265/08, EU:C:2010:205. 
Paragraphs 35 and 44. ‘Judgment in Federutility’. 
Judgment of 7 September 2016, ANODE, C-121/15, EU:C:2016:637. 
Paragraphs 35, 44, 50, 52 and 70. ‘Judgment in ANODE’. 
Opinion of Advocate General Ruiz-Jarabo Colomer in Federutility and Others, 
C-265/08, EU:C:2009:640. Points 12, 13 and 15. 
Provisions of national law relied on 
Real Decreto-ley 14/2010, de 23 de diciembre, por el que se establecen medidas 
urgentes para la corrección del déficit tarifario del sector eléctrico (Royal Decree-
Law 14/2010 of 23 December laying down urgent measures for correction of the 
tariff deficit in the electricity sector (BOE No 312 of 24 December 2010, 
p. 106386). Third additional provision. (‘Decree-Law 14/2010’) 
Ministerial Order IET/75/2014 of the Ministry of Industry, Energy and Tourism 
governing transfers of funds, payable by electricity generating undertakings, from 
the specific account of the National Markets and Competition Commission to the 
Institute for Diversification and Energy Saving in 2013 for the implementation of 
measures under the Savings and Energy Efficiency Action Plan 2011-2020, and 
SUMMARY OF THE REQUEST FOR A PRELIMINARY RULING — CASE C-523/18 
 
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criteria for the implementation of the measures set out in that plan (BOE No 25 of 
29 January 2014, p. 587) (‘the contested order’). 
Succinct presentation of the facts and procedure in the main proceedings 
1 On 31 January 2014, GDF Suez Cartagena Energía S.L. (now Engie Cartagena 
S.L.; ‘the applicant’) brought a contentious administrative action against the 
contested order. In its application, the applicant sought the annulment of the order 
and recognition of the right to receive the sums paid under that order by way of 
compensation. The Administración del Estado (State Administration) lodged a 
defence on 24 June 2014, seeking the dismissal of the action. 
Essential arguments of the parties to the main proceedings 
2 The applicant seeks from the referring court a declaration that the third additional 
provision of Royal Decree-Law 14/2010 should be disapplied on the ground that it 
is contrary to EU law, and therefore a request for a preliminary ruling should not 
be made; the applicant submits that the case concerns an acte éclairé and relies on 
judgments of the Tribunal Supremo (Supreme Court, Spain) of 7 February 2012, 
which held that the public service obligation relating to the funding of the social 
tariff (‘bono social’) was contrary to Directive 2009/72/EC. 
3 In the alternative, if it is considered necessary to make a request for a preliminary 
ruling, the applicant submits that that request should concern the incompatibility 
of the third additional provision with the principles of proportionality, 
transparency, non-discrimination and verification laid down in Article 3(2) of 
Directive 2003/54/EC. The applicant relies, inter alia, on the judgments in 
Federutility and ANODE, which, in its submission, lay down the criteria and 
principles which should apply to the establishment of a public service obligation, 
with which the national provision does not comply. 
4 The Abogado del Estado (Counsel for the State) contends that there is no need to 
make a request for a preliminary ruling, albeit for different reasons. First, the 
Abogado del Estado states that no infringement of EU law was raised at the start 
of the proceedings. The Abogado del Estado goes on to state that no public service 
obligation exists and instead there is only an obligation to reduce the tariff deficit, 
from which it follows that Article 3(2) of Directive 2009/72/EC is not applicable 
for the purpose of adjudicating on the dispute. The Abogado del Estado 
acknowledges that the directive lays down common rules governing the internal 
market in electricity and imposes specific rules in many areas, for example the 
rules governing public service obligations and customer protection in Article 3. 
However, that legislation does not discount the fact that there may be national 
legislation laying down specific provisions on the Spanish electricity market, in 
particular, mechanisms for funding the deficit in the system. The Abogado del 
Estado argues that there is nothing to prevent the establishment of a public 
financial contribution which does not constitute a public service obligation under 
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EU law and, in that connection, points out that the contribution to be made by 
undertakings has an unequivocal aim in the public interest: the urgent reduction of 
the tariff deficit in the electricity sector. Lastly, the Abogado del Estado argues 
that two judgments of the Tribunal Supremo (Supreme Court) concerning the 
funding of the tariff deficit held that the obligation to fund that deficit is not 
connected to the obligation to fund the social tariff (‘bono social’). The Abogado 
del Estado submits that the principles of proportionality, non-discrimination, 
transparency and verification have not been breached either, which confirms that a 
request for a preliminary ruling is unnecessary. 
The Ministerio Fiscal (Public Prosecutor’s Office) takes an identical view 
regarding the irrelevance of the request for a preliminary ruling, based on the 
same reasons as those put forward by the Abogado del Estado . 
Succinct presentation of the reasoning in the request for a preliminary ruling 
5 The 2008-2012 Action Plan, approved by Decision of the Council of Ministers of 
8 July 2005 giving concrete expression to the measures referred to in the 
document entitled “Savings and Energy Efficiency Strategy in Spain, 2004-2012” 
(the ‘Action Plan’) was based on the promotion of savings and energy efficiency 
as a basis for social welfare, sustainable development and industrial 
competitiveness. Its strategic objectives were, inter alia, the inclusion of savings 
and energy efficiency in all national strategies, particularly the Spanish climate 
change strategy; the promotion of competition in the market under the guiding 
principle of savings and energy efficiency; and the consolidation of Spain’s 
position at the forefront of savings and energy efficiency. That plan called for a 
very significant volume of resources to boost private investment in savings and 
energy efficiency; those resources come from three sources: the Administration 
(the Instituto para la Diversificación y Ahorro de la Energía (Institute for 
Diversification and Energy Saving) (IDAE) and equivalent bodies of the 
Autonomous Communities); ERDF structural funds; and resources reinvested by 
the electricity and gas sectors to improve their efficiency. 
6 The IDAE is an entity governed by public law which was created to manage and 
develop policy in the area of energy saving, conservation and diversification. Its 
functions include, inter alia: analysing, determining, proposing and implementing 
the measures necessary to obtain effective sectoral policies; promoting the use of 
new technology in equipment and projects and encouraging the use of new 
sources of energy; rationalisation of consumption and the reduction of energy 
costs; analysing, defining, proposing and implementing programmes to investigate 
sources of renewable energy; performing such functions and activities as may be 
necessary regarding the promotion and management of energy saving and the 
conservation, diversification and development of energy. The IDAE is financed by 
ERDF funds and by the Fondo Nacional de Eficiencia Energética (FNEE; 
National Energy Efficiency Fund), to which certain undertakings in the energy 
sector pay contributions. 
SUMMARY OF THE REQUEST FOR A PRELIMINARY RULING — CASE C-523/18 
 
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7 At the outset, the costs generated by the Action Plan were attributed as a system 
cost; in other words, they were covered by the access charges for natural gas and 
electricity. 
8 Royal Decree-Law 14/2010 altered that situation, providing that the Action Plan 
was to be funded exclusively by electricity-generating undertakings subject to the 
normal rules; that is given concrete expression in the third additional provision of 
Royal Decree-Law 14/2010, which lists the 11 undertakings liable to contribute 
and their share as a percentage, and the text of which is reproduced in Question 1.  
9 The third additional provision is one of many legislative provisions aimed at 
correcting the tariff deficit in the electricity sector caused by misalignment 
between the costs of the electricity system and revenue received from electricity 
prices. Of the measures adopted by the legislature to reduce the deficit, the 
following are the most important: i) the regulation of costs attributable to the 
system and of payments by those involved in that system; ii) the approval of 
charges and the regulated tariff; iii) the levying of financial, fiscal and non-fiscal 
contributions; iv) the assumption of certain costs by the general State budgets. 
10 In respect of the years to which the present proceedings relate (2011 to 2013), the 
third additional provision of Royal Decree-Law 14/2010 was implemented by the 
adoption of two orders: ITC/2844/2011, Article 2 of which laid down the amounts 
allocated in 2011 to the actions of the Action Plan, which were payable by the 
electricity generating undertakings, in the amounts of EUR 270 000 000 and 
EUR 250 000 000 in 2011 and 2012, respectively, and the contested order. Both 
orders directly implement the legislative text in relation to which the questions 
have arisen, such that the validity of the contested order, and therefore the 
proceedings, are entirely dependent on whether or not the third additional 
provision is compatible with EU law.  
11 Article 1(1) of the contested order stipulates that its purpose is to lay down the 
procedure for the transfer from the specific account of the National Markets and 
Competition Commission to the IDAE of the funds provided for in the third 
additional provision of Royal Decree-Law 14/2010. 
12 In accordance with that order, the total sum allocated to the year 2013 which was 
payable into that account from the electricity system was EUR 150 000 000. The 
applicant, which appears in the order under the name AES Cartagena, SRL, was to 
pay EUR 3 105 000, since, under the Action Plan, it was responsible for covering 
2.07% of the total cost. 
13 The referring court states that, by order of 25 October 2016, the Tribunal Supremo 
(Supreme Court) made a request for a preliminary ruling (Case C-561/16, Saras 
Energía), in which the first question referred is similar to Question 1 in this case; 
the Audiencia Nacional (National High Court, Spain) states that the subject matter 
of the provision at issue in Case C-561/16 is different, since the contribution to the 
FNEE (Fondo Nacional de Eficiencia Energética: Energy Efficiency National 
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Fund) was the main measure for fulfilling energy efficiency obligations whereas 
the provision at issue in the present case, which has now been repealed but which 
was in force at the material time, lays down only one measure for fulfilling the 
obligations: the financial contribution. 
14 The referring court takes the view that it is possible that the mandatory 
contribution by the 11 undertakings referred to in the third additional provision is 
incompatible with the principles laid down in Article 3(2) of Directive 2009/72 
and in Directive 54/2003, and that there is a public service obligation imposed by 
the State which is not defined in a transparent, non-discriminatory and verifiable 
manner, thereby guaranteeing equality of access for companies to consumers. 
15 At State level, the attainment of those measures for fulfilling the objectives of 
savings and energy efficiency was carried out by means of the Action Plan. Until 
the entry into force of Royal Decree-law 14/2010, those measures were financed 
using funds which came essentially from budgetary procedures and were 
attributed to system costs, which contributed to increasing the tariff deficit. The 
reduction of the deficit was the fundamental reason which led the legislature to 
enact that decree-law. 
16 It is not disputed that it is lawful for the State, with a view to reducing the tariff 
deficit, to require that the FNEE be financed only by certain undertakings in the 
electricity sector. That is a sovereign decision of the legislature. However, the fact 
that the financing of that fund became the sole responsibility of certain generating 
undertakings, with the legitimate aim of reducing the tariff deficit, has other 
consequences. 
17 The fact that, under the third additional provision of Royal Decree-Law 14/2010, 
only certain undertakings in the sector are required to contribute to the fund 
entails the imposition of a public service obligation by the State on those 
operators, in the terms provided for in Directives 2003/54 and 2009/72/EC. Under 
Article 3(2), ‘Member States may impose on undertakings operating in the 
electricity sector, in the general economic interest, public service obligations 
which may relate to … environmental protection, including energy efficiency and 
climate protection.’ 
18 The referring court takes the view that that funding requirement imposed by the 
legislature constitutes a compulsory public service obligation, since it is a decision 
of an economic and financial nature but its objective and direct purpose is to 
implement measures related to environmental protection, including energy 
efficiency and climate protection. 
19 Paragraph 50 of the judgment in ANODE states that the Member States remain 
free, in compliance with EU law, to define which objectives of general economic 
interest they wish to pursue by imposing public service obligations. In addition, 
paragraph 52 states that EU law allows the Member States to assess whether, in 
the general economic interest, public service obligations relating to the price of 
SUMMARY OF THE REQUEST FOR A PRELIMINARY RULING — CASE C-523/18 
 
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supply of natural gas should be imposed on undertakings operating in the gas 
sector, in particular in order to ensure security of supply and territorial cohesion, 
provided that the other conditions laid down by that directive are satisfied. In view 
of the similarities between the legislation governing gas and that governing 
electricity, that case-law, which concerns gas, is also applicable to the electricity 
sector, which includes a reference to the need to comply with the principle of 
proportionality and a reference relating to the requirement that public service 
obligations must be clearly defined, transparent, non-discriminatory and 
verifiable. 
20 The definition of that public service obligation does not include any statement by 
the legislature as to the reason why the undertakings concerned were chosen, why 
other electricity generating companies in similar circumstances were not included, 
or why other undertakings in the sector connected with distribution and marketing 
were not made subject to the obligation. Nor does the Royal Decree-Law give any 
explanation of the approach followed when setting the amount of those fixed sums 
or whether the reason that the proportions were split as they were was because of 
the size and importance of the undertakings in the sector, and, if that was the case, 
what the criteria were for establishing that importance. Neither the enacting terms 
nor the preamble of the legislative text provide any clarification of those matters 
which, in accordance with Article 3(2) of the directives, should contribute to its 
transparency so that it is verifiable in the interests of preventing any kind of 
discrimination. 
21 The sole ground on which the measure could be considered to be compatible with 
EU law is its temporary nature, if indeed the provision of the duration of two 
consecutive action plans comes within the parameters of what is a reasonable 
duration. In other words, those plans must be limited in duration to what is strictly 
necessary in order to achieve their objective, in order, in particular, not to render 
permanent a measure which, by its very nature, constitutes an obstacle to the 
realisation of an operational internal market in gas. In that respect, the mere fact 
that the national law in question labels the intervention as temporary is not in itself 
sufficient for a finding that it is proportionate from the point of view of its 
duration. 
22 In short, the legal provision is far from transparent in view of the total absence of 
the necessary explanation of the criteria followed, which could render the public 
service obligation thus laid down a discriminatory measure when a comparison is 
made with operators in the system which are not subject to that obligation; that 
discrimination is insufficiently justified and, moreover, does not comply with the 
principles governing such obligations in the sector. 
23 In a similar case, the Tribunal Supremo (Supreme Court) declared that the rules 
governing the funding of the social tariff (‘bono social’) were inapplicable on the 
ground that they were incompatible with Directive 2009/72/EC. However, the fact 
that the situation is similar to that of the social tariff does not mean that it is totally 
identical. In short, the referring court’s doubts have not been completely dispelled.