Updated: Sept. 25, 2012 (Initial publication: Sept. 15, 2010)
Sectorial Analysis
II-5.5: The Swiss Federal Administrative Tribunal ruled on July 8th, 2010, that ElCom, the Swiss energy regulator, had overridden its powers in its decision of March 6th 2009
http://www.thejournalofregulation.com/spip.php?article488
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Thematic Report (Energy): The Swiss Federal Administrative Tribunal ruled on July 8th, 2010, that ElCom, the Swiss energy regulator, had overridden its powers in its decision of March 6th 2009.
In a decision of July 8th 2010, the Bundesverwaltungsgericht (the Swiss Federal Administrative Tribunal) partially amended a decision of the Eidgenössiche Elektrizitätskommission (ElCom, the Swiss Federal Electricity Commission), stating that it is unconstitutional and illegal for power-plant operators to bear the price of “system-services”.
FRENCH
Fiche thématique (énergie) : Le tribunal fédéral administratif suisse a rendu un arrêt le 8 juillet 2010 contre une décision du 6 mars 2009 de l'ElCom, le régulateur suisse de l'énergie, pour excès de pouvoir
Dans un arrêt du 8 juillet 2010, le Bundesverwaltungsgericht (le Tribunal Fédéral Administratif suisse) a partiellement annulé une décision de l'Eidgenössiche Elektrizitätskommission (ElCom, la Commission fédérale suisse de l'électricité), déclarant qu'il est anticonstitutionnel et illégal que les opérateurs des centrales électriques supportent le coût des "services systémiques"
GERMAN
Thematischer Bericht (Energie): das schweizerische Bundesverwaltungsgericht hat am 8. Juli 2010 die Verfügung der ElCom, die Eidgenössische Elektrizitätskommission, die Schweizer Regulierungsbehörde für Elektrizität, vom 6. März 2009 für ungültig erklärt.
In einer Entscheidung vom 8. Juli 2010 hat das Schweizer Bundesverwaltungsgericht eine ElCom-Verfügung vom 6. März 2010 zum Teil für ungültig erklärt, da die in der Verordnung vorgesehene Anlastung der Systemdienstleistungskosten an die Kraftwerke gesetzeswidrig ist.
SPANISH
Informe Temático (Energía): El Swiss Federal Administrative Tribunal (El Tribunal administrativo federal de Suiza) dictó el 8 de julio 2010 que ElCom, el Regulador suizo de energía, había sobrepasado sus poderes en su decisión del 6 de marzo 2009.
En una decisión del 8 de julio 2010, el Bundesverwaltungsgericht (El Tribunal administrativo federal de Suiza) anuló parcialmente la decisión de Eidgenössiche Elektrizitätskommission (ElCom, la Comisión suiza de electricidad federal) constatando que es inconstitucional e ilegal que las operadoras de centrales eléctricas soporten el precio de “servicios sistemáticos.”
Attached documents
Context and Summary
Brief commentary
This decision is a first in Switzerland. The decision of the ElCom of March 6th, 2009 was the result of a political intervention, since the ordinance modifying the Federal Supply Act was the result of a very active stance of Moritz Leuenberger, at that time Federal Councillor and Minister for Energy, who wanted to avoid significant increases in energy prices. This would result in a better acceptance by the Swiss population, whose vote is still needed to fully open the market in 2014.
Thus, the decision of the ElCom of March 6th, 2009, was a logical consequence of this political climate. The Swiss Federal Administrative Tribunal, in July 8th, 2010, stated that the Federal Council had overridden its competences in introducing article 31b in the {StromVG}, since these provisions created a new category of cost-bearers: the power-plant operators whose firms produce more than 50MW of power. As such, this provision represented an important modification to the Federal Supply Act, by creating legal rules in the sense of article 164§1 of the Swiss Constitution, according to which, legal rules can only be implemented by a law - and the Parliament, and not by an ordinance - that is to say the Federal Council.
This backlash against the Federal Council creates important uncertainty in Switzerland, for if this decision is upheld, the prices for backup power services in 2009 and 2010 will be borne again by the end consumers, which would represent a significant increase of the price of electricity in the country. The political motivations behind the ElCom’s decision create a very troubling uncertainty for Swiss consumers.
Interestingly, the ElCom, which took a very political decision to establish its authority and publicly demonstrate its autonomy from the energy market, saw its credibility deeply undermined by the decision of the Federal Administrative Tribunal. Even though Elcom’s review of the tariffs was not invalidated, the Federal Administrative Tribunal deemed the application of the new dispositions of the Federal Supply Act unconstitutional. This first setback illustrates the fragility of regulator, because of the control that applies on it – control necessary because it reinforces the legitimacy of the regulator.
Indeed, there is, at first sight, an aporia: the regulator can only be legitimate if its decisions are controlled by {ex post} organisms, especially judges, who have the power to cancel the regulator’s decisions if they are in contradiction with the judicial system; otherwise, the regulator blatantly lacks legitimacy. Thus, the strong—legitimate—regulator is necessarily weak, for it is supervised by the judiciary.
In this case, the ElCom handed down its very first decision. However, in regulatory matters, the regulator is not in the same position when it takes its first decisions as when it is an established, old authority. For the new regulator, there are only two options: either it takes a very audacious decision, anticipating that the controlling authorities will not cancel the decision, but remind the authority that such decisions may not be approved in the future, or it begins with soft decisions out of fear of the severity of the judicial review to come, knowing that the more it establishes its authority, the more daring its decisions may become, thereby progressively testing the breadth of its power.
The choice of one or the other attitude highly depends on the sector in which the regulator intervenes. Generally speaking, the relationship between the regulator and the sector is not violently hierarchical, but has a higher horizontal dimension, through mechanisms of co-regulation, exchange of information, etc. This specific relationship also contributes to reinforcing the perception of the regulator’s legitimacy by the sector. Therefore, a newly established regulator should not adopt a violent, political decision towards the sector, for it invites review by higher authorities. On the contrary, the signal that should be transmitted to the sector is that of a soft exercise of power, a preference for discourse rather than decision. Thus, the control exercised in this particular case by the Federal Administrative Tribunal sends another signal, which is that a violent use of regulatory power by a young regulator triggers a violent use of the judge’s power to control such decisions. It appears that a soft exercise of decision-making powers by the newly established regulator is more likely to be seen benevolently by the controlling authorities, who are more likely to uphold violent decisions when they come from old, long-established regulators.
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