Federutility and Others v Autorità per l'energia elettrica e il gas.
Date: 2010-04-20
17. Article 23(1)(c) of Directive 2003/55 provides that Member States must ensure that all customers are free to buy natural gas from the supplier of their choice as from 1 July 2007.
18. Although it is not explicitly stated in that provision, or indeed in any other provisions of that directive, that the price for the supply of natural gas must, as from 1 July 2007, be determined solely by the operation of supply and demand, that requirement follows from the very purpose and the general scheme of that directive, which, as its 3rd, 4th and 18th recitals state, is designed progressively to achieve a total liberalisation of the market for national gas in the context of which, in particular, all suppliers may freely deliver their products to all consumers.
20. However, and as is apparent from the 26th and 27th recitals, Directive 2003/55 is also designed to ensure that, in the context of that liberalisation, ‘high standards’ of public service are maintained and the final consumer is protected.
21. In order to meet those latter objectives, Article 3(1) of Directive 2003/55 states that it applies ‘without prejudice’ to Article 3(2), which expressly permits Member States to impose ‘public service obligations’ on undertakings operating in the gas sector, which may in particular concern the ‘price of supply’.
22. It follows from the wording of Article 3(2) that measures adopted on the basis thereof must be adopted in the general economic interest, be clearly defined, transparent, non discriminatory and verifiable, and guarantee equality of access for EU gas companies to national consumers. The same provision adds that Member States must thereby have ‘full regard’ to the relevant provisions of the Treaty on the Functioning of the European Union, and in particular of Article 106 TFEU.
23. It should be noted that that power is exercised subject to the review of the Commission, since Member States are required under Article 3(6) of Directive 2003/55 to inform the Commission of all measures taken to fulfil public service obligations and their possible effects on national and international competition, whether or not such measures require a derogation from the provisions of that directive, and to notify the Commission every two years of any changes to such measures.
26. Regarding the condition concerning the existence of a general economic interest, Directive 2003/55 gives no definition of that expression, but the reference in Article 3(2) of that directive, both to that condition and to Article 106 TFEU, which concerns undertakings entrusted with the management of a service of general economic interest, implies that that condition should be interpreted in the light of that latter provision of the Treaty.
27. It is important to bear in mind in that respect that Article 106(2) TFEU provides, first, that undertakings entrusted with the operation of services of general economic interest are subject to the rules on competition in so far as the application of such rules does not obstruct the performance, in law or in fact, of the particular tasks assigned to them, and, secondly, that the development of trade must not be affected to such an extent as would be contrary to the interests of the Union.
28. As the Court has stated, that provision is designed to reconcile the Member States’ interest in using certain undertakings as an instrument of economic or social policy with the Community’s interest in ensuring compliance with the rules on competition and preservation of the unity of the common market (see, to that effect, Case C‑67/96 Albany [1999] ECR I-5751, paragraph 103 and case-law cited).
29. In that context, Member States are entitled, while complying with the law of the Union, to define the scope and the organisation of their services in the general economic interest. In particular, they may take account of objectives pertaining to their national policy (see, to that effect, Albany , paragraph 104).
32. It follows from the above that Directive 2003/55 allows Member States to assess whether, in the general economic interest, after 1 July 2007, it is necessary to impose on undertakings operating in the gas sector public service obligations in order, in particular, to ensure that the price of the supply of natural gas to final consumers is maintained at a reasonable level having regard to the reconciliation which Member States must make, taking account of the situation in the natural gas sector, between the objective of liberalisation and that of the necessary protection of final consumers pursued, as mentioned in paragraphs 18 and 20 of this judgment, by the Union legislature.
– Compliance with the principle of proportionality
33. It follows from the very wording of Article 106 TFEU that the public service obligations which Article 3(2) of Directive 2003/55 allows to be imposed on undertakings must comply with the principle of proportionality and that, therefore, after 1 July 2007, those obligations may compromise the freedom to determine the price for the supply of natural gas only in so far as is necessary to achieve the objective in the general economic interest which they pursue and, consequently, for a period that is necessarily limited in time.
34. It is for the referring court to assess, in the context of the dispute in the main proceedings, whether that requirement of proportionality is fulfilled. It is, however, for the Court of Justice to provide all the necessary indications for that purpose having regard to the law of the Union.
35. First, such an intervention must be limited in duration to what is strictly necessary in order to achieve its 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. It is for the national court to assess whether national legislation such as that at issue in the main proceedings, which permits determination of the price level for the supply of natural gas by the adoption of ‘reference prices’ such as those at issue in the main proceedings, independently of free market forces, fulfils such a requirement. In that context, the referring court should examine whether and to what extent the relevant national law requires the administration to make a periodic re-examination, at close intervals, of the need for it to intervene in the gas sector and the manner of its doing so, having regard to the development of that sector.
36. Secondly, the method of intervention used must not go beyond what is necessary to achieve the objective which is being pursued in the general economic interest.
39. Thirdly, the requirement of proportionality must also be assessed with regard to the scope ratione personae  of the measure, and, more particularly, its beneficiaries.
40. In that regard, it should be emphasised that that requirement does not prevent ‘reference prices’ for the supply of natural gas, such as those at issue in the main proceedings, from being applied to all customers whose consumption of natural gas is above a certain threshold rather than being limited to the circle of those, expressly referred to in Article 3(3) of Directive 2003/55, who must necessarily be protected on account of their vulnerability.
41. If, as some of the applicants in the main proceedings maintain before the Court, the definition of ‘reference prices’ for the supply of natural gas, such as those at issue in the main proceedings, applies also to undertakings irrespective of their size, which it is for the referring court to verify, it should be noted that Directive 2003/55 does not in principle exclude the possibility that the latter may also benefit, as final consumers of gas, from the public service obligations which Member States may adopt in the context of Article 3(2) of that directive. The 26th recital of that directive states in particular that measures taken by the Member States to protect final consumers may differ according to whether they are addressed to households or to small- and medium-sized undertakings.
42. In that case, however, it would be necessary to take account, in assessing the proportionality of the national measure in question, of the fact that the situation of undertakings is different from that of domestic consumers, the objectives pursued and the interests present being not necessarily the same and also of objective differences between the undertakings themselves, according to their size.
43. In those circumstances, apart from the specific case, referred to at the hearing, of management companies of apartment blocks, the requirement of proportionality referred to above would not, in principle, be complied with if the definition of ‘reference prices’ for the supply of natural gas, such as those at issue in the main proceedings, were to benefit individuals and undertakings in an identical manner, in their capacity as final consumers of gas.
– The requirement that public service obligations be clearly defined, transparent, non discriminatory and verifiable, and that they guarantee equal access for EU gas companies to consumers
45. As regards the requirement that those obligations must not be discriminatory, it is for the referring court to verify whether, having regard to the whole of the measures which may have been taken in that area by the Member State concerned, the definition of ‘reference prices’ for the supply of natural gas, such as those at issue in the main proceedings, which applies in an identical manner to all undertakings supplying natural gas, must nevertheless be regarded as discriminatory.
46. It would be so if such intervention were to lead in reality to imposing the financial burden arising from the intervention mainly on some of those undertakings, in this case those not also carrying on the business of producing/importing natural gas.
47. The answer to the questions referred must therefore be that Articles 3(2) and 23(1) of Directive 2003/55 do not preclude national legislation, such as that at issue in the main proceedings, which permits determination of the price level for the supply of natural gas by the definition of ‘reference prices’, such as those at issue in the main proceedings, after 1 July 2007, provided that such intervention:
– pursues a general economic interest consisting in maintaining the price of the supply of natural gas to final consumers at a reasonable level having regard to the reconciliation which Member States must make, taking account of the situation in the natural gas sector, between the objective of liberalisation and that of the necessary protection of final consumers pursued by Directive 2003/55;
– compromises the free determination of prices for the supply of natural gas after 1 July 2007 only in so far as is necessary to achieve such an objective in the general economic interest and, consequently, for a period that is necessarily limited in time;
– is clearly defined, transparent, non discriminatory and verifiable, and guarantees equal access for EU gas companies to consumers.
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