Invitation to submit comments pursuant to Article 1(2) of Part I of Protocol 3 to the Agreement between the EFTA States on the Establishment of a Surveillance Authority and a Court of Justice on state aid issues

(2019/C 197/06)

By means of the above referenced Decision, reproduced in the authentic language on the pages following this summary, the EFTA Surveillance Authority notified the Norwegian authorities of its decision to initiate proceedings pursuant to Article 1(2) of Part I of Protocol 3 to the Agreement between the EFTA States on the Establishment of a Surveillance Authority and a Court of Justice concerning the abovementioned measure.

Interested parties may submit comments on the measure in question within one month of the date of publication to:

EFTA Surveillance Authority Registry Rue Belliard 35 1040 Bruxelles/Brussel BELGIQUE/BELGIË

The comments will be communicated to the Norwegian authorities. The identity of the interested party submitting the comments may be withheld following a request in writing stating the reasons for the request.

SUMMARY

Procedure

1. The Authority received a complaint from the trade organisation ‘Nelfo’ on 11 May 2017.

2. Following requests, the Authority received information from the Norwegian authorities by letters dated 27 June 2017 and 5 July 2017, and by emails dated 8 September 2017, 12 September 2017 and 28 February 2018.

Description of the measure(s)

3. The alleged aid beneficiary is BKK acting through different fully owned subsidiaries.

4. In 1996, the ownership of the streetlights in Bergen was transferred from a company fully owned by the Municipality of Bergen, to BKK. Two years later, BKK was converted into a limited liability company. Currently, BKK is owned by the Municipality of Bergen (37,75 %), other municipalities in the Bergen region (12,35 %), and the state-owned enterprise Statkraft Industrial Holding AS (49,9 %).

5. The BKK subsidiaries that have owned the streetlights over the years are BKK Nett AS (1996-January 2016), EnoTek AS (January 2016-May 2017) and Veilys AS (May 2017-present).

6. The Decision concerns three measures implemented by the Municipality of Bergen in relation to the streetlights in the municipality namely (a) the operation and maintenance agreement, (b) the financing of 12 000 LED fixtures, and (c) the compensation for the capital costs of the streetlight infrastructure.

7. According to the complainant, measure (a) and (b) entail an on-going breach of the state aid rules dating back to 1 January 2016. For these two measures, the formal investigation procedure is restricted to this time period.

Assessment of the measure(s)

8. The Authority doubts that the three measures are in line with the market economy operator principle (‘MEOP’). The financing of the 12 000 LED fixtures and the compensation of the capital costs of the streetlight infrastructure might entail a mitigation of charges that should normally be borne by the budget of BKK, as the owner of the streetlights. The Norwegian authorities have not submitted information suggesting that BKK has a public service obligation to discharge, and the rules concerning services of general economic interest therefore do not seem applicable to the measures at hand.

9. Even if the Municipality of Bergen is purchasing the operation and maintenance services for the benefit of its population, the Authority doubts that the activity of BKK, a private entity offering services for remuneration, can be characterised as non-economic.

10. Finally, it would appear that the market for operation and maintenance, as well as the other markets in which the relevant BKK subsidiaries have been involved, are open to intra-EEA trade. At present however, the Authority lacks sufficiently detailed information to conclude in this regard.

11. If the measures constitute state aid, the obligation, contained in Article 1(3) of Part I of Protocol 3 to the Agreement between the EFTA States on the Establishment of a Surveillance Authority and a Court of Justice, to notify the aid to the Authority before putting it into effect has not been respected. Such state aid would be unlawful.

12. The Norwegian authorities have not provided arguments substantiating that the measures, to the extent that they constitute state aid, could be considered compatible with the functioning of the EEA Agreement. The Authority therefore has doubts as to the compatibility of all three measures.

(1) Reference is made to Article 4(4) of Part II of Protocol 3 to the Agreement between the EFTA States on the Establishment of a Surveillance Authority and a Court of Justice.

(2) Document No 855990.

(3) Document No 858239.

(4) Documents Nos 863097, 863099, 864432, and 864434.

(5) Document No 872926.

(6) Ibid.

(7) Document No 873252.

(8) Document No 923689.

(9) Document No 827789.

(10) Document No 1057006.

(11) Lov om vegar (Road Act), LOV-1963-06-21-23, Section 20.

(12) See letter from the Municipality of Bergen to Nettpartner AS dated 18 May 2016 attached as annex 2 to the complaint.

(13) See contract notice published on TED website attached as annex 7 to the complaint.

(14) 16 058 of these are owned by EnoTek AS and the rest, 2 349 are owned by the Municipality of Bergen.

(15) Judgment in Altmark, C-280/00, EU:C:2003:415 (‘Altmark’), paragraphs 89–93.

(16) Commission Regulation (EU) No 360/2012 of 25 April 2012 on the application of Articles 107 and 108 of the Treaty on the Functioning of the European Union to de minimis aid granted to undertakings providing services of general economic interest, OJ L 114, 26.4.2012, p. 8, referred to at point 1ha of Annex XV to the EEA Agreement.

(17) Commission Decision 2012/21/EU of 20 December 2011 on the application of Article 106(2) of the Treaty on the Functioning of the European Union to State aid in the form of public service compensation granted to certain undertakings entrusted with the operation of services of general economic interest, OJ L 7, 11.1.2012, p. 3, referred to at point 1h of Annex XV to the EEA Agreement.

(18) The Norwegian authorities refer to judgment of the General Court of 12 December 2006, Selex v Commission, T-155/04, EU:T:2006:387, paragraph 61 (‘judgment of the GC in Selex’). The reasoning in the judgment of the General Court was overturned by the Court of Justice which considered the activity to be non-economic on other grounds. See judgment of the Court of Justice of 26 March 2009, Selex v Commission, C-113/07, EU:C:2009:191 (‘judgment of the CoJ in Selex’), paragraphs 86–93, which considered the activity non-economic on other grounds.

(19) OJ L 342, 21.12.2017, p. 35 and EEA Supplement No 82, 21.12.2017, p. 1, paragraph 48.

(20) NoA, paragraph 68.

(21) Altmark, paragraphs 89–93.

(22) Email from the Norwegian authorities to the Authority of 8 September 2017, Document No 873252.

(23) NoA, paragraphs 98–100.

(24) NoA, paragraphs 101–105.

(25) Emails of 7 September 2017 and 11 July 2018 (Documents Nos 872926 and 923689).

(26) NoA, paragraph 79.

(27) Email of 28 February 2019 and the attached maintenance and operation agreement, Document No 1057006.

(28) Document No 863099.

(29) Document No 864434.

(30) Document No 873252.

(31) Annex 6 to the complaint.

(32) NoA, paragraph 69.

(33) NoA, paragraph 77. Judgment in FIH v Commission, C-579/16, EU:C:2018:159, paragraph 55.

(34) Judgment in Commission v EDF, C-124/10, EU:C:2012:318, paragraph 104.

(35) Judgment in Congregación de Escuelas Pías Provincia Betania v Ayuntamiento de Getafe, C-74/16, EU:C:2017:496, paragraph 42.

(36) NoA, chapter 2.1.

(37) Judgment in Congregación de Escuelas Pías Provincia Betania v Ayuntamiento de Getafe, C-74/16, EU:C:2017:496, paragraph 51.

(38) Judgment of the GC in Selex, paragraph 61.

(39) Judgment of the CoJ in Selex, paragraphs 86–93. See NoA, paragraphs 17–18 on the public powers exemption.

(40) Altmark; judgment of the CoJ in Selex, paragraph 119.

(41) Judgment in FENIN v Commission, C-205/03, EU:C:2006:453.

(42) Ibid, paragraph 37.

(43) NoA, paragraph 187.

(44) NoA, paragraph 189.

(45) NoA, paragraph 188.

(46) Judgment in Eventech, C-518/13, EU:C:2015:9, paragraph 66.

(47) https://www.bkk.no/enotek.