JUDGMENT OF THE COURT OF FIRST INSTANCE (First Chamber)

25 March 2009 (*)

(State aid – Electricity – Preferential tariff – Decision initiating the procedure under Article 88(2) EC – Admissibility – Notion of State aid – New aid or existing aid – Advantage – Statement of reasons – Legitimate expectations – Legal certainty)

In Case T‑332/06,

Alcoa Trasformazioni Srl, established in Portoscuso (Italy), represented by M. Siragusa, T. Müller-Ibold, F. Salerno and T. Graf, lawyers,

applicant,

v

Commission of the European Communities, represented by N. Khan, E. Righini and C. Urraca Caviedes, acting as Agents,

defendant,

APPLICATION for annulment of Commission Decision 2006/C 214/03, notified to the Italian Republic by letter of 19 July 2006, initiating the procedure laid down in Article 88(2) EC, concerning State aid C 36/06 (ex NN 38/06) – Preferential electricity tariff to energy intensive industries in Italy, in so far as that decision relates to the electricity tariffs applicable to the two primary aluminium plants owned by Alcoa Trasformazioni,

THE COURT OF FIRST INSTANCE OF THE EUROPEAN COMMUNITIES (First Chamber),

composed of V. Tiili (Rapporteur), President, F. Dehousse and I. Wiszniewska-Białecka, Judges,

Registrar: C. Kantza, Administrator,

having regard to the written procedure and further to the hearing on 8 July 2008,

gives the following

Judgment

 Legal context

1        The procedural rules laid down in the Treaty concerning State aid vary according to whether the aid is existing or new, the former being governed by Article 88(1) and (2) EC, the latter being governed (in chronological order) by Article 88(3) and (2) EC.

2        As far as existing aid is concerned, Article 88(1) EC authorises the Commission to keep such aid under constant review in cooperation with Member States. As part of that review, it must propose to the Member States any appropriate measures required by the progressive development or by the functioning of the common market. Article 88(2) EC provides that if, after giving notice to the parties concerned to submit their comments, the Commission finds that aid is not compatible with the common market under Article 87 EC, or that aid is being misused, it must decide that the State concerned must abolish or alter the aid within such period of time as the Commission determines.

3        In accordance with Article 88(3) EC, new aid must be notified in advance to the Commission and may not be put into effect until the procedure has resulted in a final decision. Under the same provision, the Commission must, if it considers that a plan is not compatible with the common market, initiate the procedure provided for in Article 88(2) EC without delay.

4        Article 1 of Council Regulation (EC) No 659/1999 of 22 March 1999 laying down detailed rules for the application of Article [88 EC] (OJ 1999 L 83, p. 1), which entered into force on 16 April 1999, contains the following definitions of relevance to the present case:

‘(a) “aid” shall mean any measure fulfilling all the criteria laid down in Article [87(1) EC];

(b)       “existing aid” shall mean:

(i)       ... all aid which existed prior to the entry into force of the Treaty in the respective Member States, that is to say, aid schemes and individual aid which were put into effect before, and are still applicable after, the entry into force of the Treaty;

(ii)  authorised aid, that is to say, aid schemes and individual aid which have been authorised by the Commission or by the Council;

...

(v)       aid which is deemed to be an existing aid because it can be established that at the time it was put into effect it did not constitute an aid, and subsequently became an aid due to the evolution of the common market and without having been altered by the Member State. Where certain measures become aid following the liberalisation of an activity by Community law, such measures shall not be considered as existing aid after the date fixed for liberalisation;

(c)      “new aid” shall mean all aid, that is to say, aid schemes and individual aid, which is not existing aid, including alterations to existing aid;

...

(f)       “unlawful aid” shall mean new aid put into effect in contravention of Article [88(3) EC];

...’

5        According to Article 2(1) of Regulation No 659/1999, ‘any plans to grant new aid shall be notified to the Commission in sufficient time by the Member State concerned’. Article 3 of the regulation provides that new aid must not to be ‘put into effect before the Commission has taken, or is deemed to have taken, a decision authorising such aid’. Article 4(4) of the regulation provides that the Commission is to adopt a decision to initiate proceedings pursuant to Article 88(2) EC (‘the formal investigation procedure’) if, after a preliminary examination, the Commission finds that ‘doubts are raised as to the compatibility with the common market’ of a notified measure.

6        According to Article 6(1) of Regulation No 659/1999, a ‘decision to initiate the formal investigation procedure shall summarise the relevant issues of fact and law, shall include a preliminary assessment of the Commission as to the aid character of the proposed measure and shall set out the doubts as to its compatibility with the common market’.

7        Under Article 7(1) of Regulation No 659/1999, ‘the formal investigation procedure shall be closed by means of a decision as provided for in paragraphs 2 to 5 of this article’. The Commission may find that a notified measure does not constitute aid (Article 7(2) of the regulation) or that notified aid is compatible with the common market (Article 7(3) of the regulation), may be considered compatible with the common market if certain conditions are met (Article 7(4) of the regulation) or is incompatible with the common market (Article 7(5) of the regulation).

8        As regards measures that are not notified, Article 10(1) of Regulation No 659/1999 provides that ‘[w]here the Commission has in its possession information from whatever source regarding alleged unlawful aid, it shall examine that information without delay’. Article 13(1) of the regulation provides that, where appropriate, such examination is to result in a decision to initiate the formal investigation procedure.

9        The procedure for existing aid schemes is laid down in Articles 17 to 19 of Regulation No 659/1999. According to Article 18 of the regulation, where the Commission ‘concludes that an existing aid scheme is not, or is no longer, compatible with the common market, it is to issue a recommendation to the Member State concerned proposing appropriate measures’. Where the Member State concerned does not accept the proposed measures, the Commission may, pursuant to Article 19(2) of the regulation, initiate a formal investigation procedure.

 Background to the dispute

10      The applicant, Alcoa Trasformazioni Srl, is a company governed by Italian law which owns two plants producing primary aluminium in Italy, located in Portovesme, in Sardinia, and Fusina, in the Veneto region. The plants were transferred to the applicant by Alumix SpA as part of the latter’s privatisation.

11      By Decision 96/C 288/04, notified to the Italian Republic and published on 1 October 1996 (OJ 1996 C 288, p. 4; ‘the Alumix decision’), the Commission concluded the procedure which it had initiated on 23 December 1992 (OJ 1993 C 75, p. 2) and which had been extended on 16 November 1994 (OJ 1995 C 292, p. 10). As part of that procedure, the Commission examined a number of measures granted to Alumix at the time of its privatisation, including the grant of a preferential electricity tariff agreed by ENEL, Italy’s traditional electricity supplier, to plants acquired by the applicant.

12      In the Alumix decision, the Commission essentially concluded, as regards the electricity tariff which ENEL charged the plants acquired by the applicant, which had been set by Decision No 13 of the Comitato interministeriale dei prezzi (Interministerial Price Committee) of 24 July 1992 (‘IPC decision No 13/92’) and which was applicable until 31 December 2005 pursuant to Article 2 of the Decree-Law of 19 December 1995 (GURI No 39 of 16 February 1996, p. 8; ‘the 1995 Decree-Law’), that it did not constitute State aid within the meaning of Article 87(1) EC. In that regard, the Commission took the view, in particular, that ‘[b]y charging a tariff for the production of primary aluminium at [the plants acquired by the applicant] that covers [its] marginal costs and makes a contribution to its fixed costs, ENEL [was] behaving [like an operator acting under normal market conditions] since these tariffs permit the supply of electricity to its biggest industrial consumers in regions where there is serious over-capacity in terms of electricity production’.

13      By decision 2006/C 214/03, notified to the Italian Republic by letter of 19 July 2006 (OJ 2006 C 214, p. 5), the Commission initiated the procedure laid down in Article 88(2) EC concerning State aid C 36/06 (ex NN 38/06) – Preferential electricity tariff to energy intensive industries in Italy (‘the contested decision’).

14      In the contested decision, the Commission states, in recitals 1 to 4, that as part of the procedure at the end of which it adopted Decision 2005/C 30/06, notified to the Italian Republic by letter of 16 November 2004 (OJ 2005 C 30, p. 7), initiating the procedure laid down in Article 88(2) EC concerning State aid C 38/2004 (ex NN 58/2004) – Aid for Portovesme Srl (‘the Portovesme decision’), it became aware of Article 11(11) of Decree-Law No 35 of 14 March 2005, converted into Law No 80 of 14 May 2005 (GURI No 111 of 14 May 2005, ordinary supplement No 91; ‘the 2005 Decree-Law’). The Commission notes that under that provision, which had not been notified to it, the preferential electricity tariff already in force for some energy intensive industries – namely, on the one hand, the three companies that emerged from the break-up of the Terni company and, on the other hand, the two plants owned by the applicant – had been extended until 31 December 2010.

15      As regards the electricity tariff granted to the applicant’s plants, which is the only tariff at issue in the present action, the Commission first takes formal note, in recital 5 of the contested decision, of the fact that, pursuant to Decision No 148/04 of 9 August 2004 of the Autorità per l’energia elettrica e il gas (Regulatory Authority for Electricity and Gas, ‘the Authority’) (‘Authority Decision No 148/04’), the public body Cassa Conguaglio per il settore elettrico (Equalisation Fund for the Electricity Sector, ‘the Equalisation Fund’) was entrusted with responsibility for administering the preferential tariff, directly reimbursing the applicant’s plants with the difference between the tariff invoiced by ENEL and the tariff laid down in the 1995 Decree-Law, by way of a special levy imposed on all electricity users in Italy.

16      Moreover, the Commission notes, in recitals 6 to 8 of the contested decision, that, in accordance with the Authority’s Decision No 217/05 of 13 October 2005 (‘Authority Decision No 217/05’), taken pursuant to Article 11(11) and (13) of the 2005 Decree-Law, first, the applicant’s plants were supposed to pay, in 2005, a tariff identical to that which would have applied in 2004 if the said decision had not been adopted and, second, in the event that annual reference prices at the energy exchanges in Frankfurt am Main and Amsterdam went up, the tariff granted to those plants could not be increased by more than 4% per annum.

17      The Commission also states, in recitals 40 to 44 of the contested decision, that it has to examine whether the preferential tariff granted to the applicant’s plants constitutes State aid. In this respect, it notes that ‘the reduction in the price of electricity constitutes a significant economic advantage since energy costs make up the largest part of the costs of aluminium production’, that ‘the Italian authorities reduce the price of electricity unilaterally’, that ‘[that measure] is financed through a special levy paid by all electricity users in Italy [to the Equalisation Fund], a public fund administered by the State’, and that ‘consequently, the measure is financed through State resources’. The Commission also states, in recitals 45 and 46 of the contested decision, that that measure threatens to distort competition, that it may affect trade between Member States and that, consequently, it falls within the scope of Article 87(1) EC.

18      In addition, the Commission states, in recital 47 of the contested decision, first, that, given that Article 11(11) of the 2005 Decree-Law was not notified to the Commission, the measure must be considered to be unlawful, within the meaning of Article 1(f) of Regulation No 659/1999 and, second, that its earlier findings in the Alumix decision, according to which the preferential tariff granted to the applicant did not constitute existing aid, preclude the measure from being considered existing aid.

19      Moreover, in recital 49 of the contested decision, the Commission expresses doubts as regards the compatibility with the common market of the aid granted to the Fusina plant.

20      Finally, the Commission expresses doubts, in recitals 77 and 78 of the contested decision, first, as regards the compatibility with the common market of the aid granted to the Portovesme plant and, second, as regards whether the measure constitutes ‘[t]he solution to [the applicant’s] problems that least distorts competition’.

21      It is stated in recitals 80 and 81 of the contested decision that ‘[t]he Commission invites [the Italian Republic] to submit any comments it might have and to provide the Commission with all the information that might help with the assessment of the aid, within one month of receipt of the [contested decision]’, that ‘Article 88(3) [EC] has suspensory effect, and that, in accordance with Article 14 [of Regulation No 659/1999], [the Commission] may require the Member State to recover from the beneficiary aid received unlawfully’.

 Procedure and forms of order sought by the parties

22      By application lodged at the Registry of the Court of First Instance on 29 November 2006, the applicant brought the present action.

23      By a separate document registered at the Court of First Instance on the same day, the applicant asked the Court to adjudicate under an expedited procedure pursuant to Article 76a(1) of its Rules of Procedure. On 11 December 2006, the Commission submitted its observations on that request.

24      By letter of 12 January 2007, the Court (Third Chamber) informed the applicant of its decision to refuse the application for expedited treatment.

25      The composition of the Chambers of the Court of First Instance changed and the Judge-Rapporteur was assigned to the First Chamber, to which this case was itself accordingly assigned.

26      Upon hearing the report of the Judge-Rapporteur, the Court of First Instance (First Chamber) decided to open the oral procedure and, by way of measures of organisation of procedure pursuant to Article 64 of its Rules of Procedure, requested the parties by letters of 4 June 2008 to lodge certain documents and to provide written answers to the Court’s questions. The parties complied with those requests within the prescribed periods.

27      The parties presented oral argument and their replies to the questions from the Court at the hearing on 8 July 2008.

28      The applicant claims that the Court should:

–        annul the contested decision in so far as it relates to the electricity tariff payable by its plants established in Fusina and Portovesme, or, in the alternative, annul the contested decision inasmuch as it classifies that tariff as unlawful new aid;

–        order the Commission to pay the costs.

29      The Commission claims that the Court should:

–        dismiss the application;

–        order the applicant to pay the costs.

 Admissibility

 Arguments of the parties

30      In its submissions, the Commission claims, first, that, as is clear from the case-law, a decision to initiate the formal investigation procedure is actionable only where the Member State contested the classification of the measure at issue as new aid during the preliminary phase of the investigation. In the present case, the Italian Republic did not make it sufficiently clear during the preliminary phase of the investigation that the measure under examination did not constitute new aid.

31      Next, the Commission notes, in response to the measures of organisation addressed to it by the Court pursuant to Article 64 of the Rules of Procedure, that ‘it would not be appropriate to maintain the plea of inadmissibility in the form set out in the Commission’s pleadings’. In this respect, the Commission claims that it is clear from the observations submitted by the Italian Republic to the Commission on 27 February 2006 that, during the preliminary phase of the investigation of the measure at issue, the Italian Republic had raised certain arguments which ‘could … be understood as denying that the measure falls within Article 87(1) EC’. Moreover, in reply to questions put by the Court at the hearing, the Commission signalled that it did not wish to ‘insist’ on arguments developed in this respect in its submissions, while explaining, first, that it was for the Court to examine of its own motion whether the present action is admissible and, second, that it took the view that, in the observations that the Italian Republic submitted to the Commission on 27 February 2006, the Italian Republic did not make it sufficiently clear that it had claimed that the measure at issue did not constitute new aid.

32      The applicant contends, in essence, that, in accordance with the case‑law, the contested decision constitutes an act which may be the subject of an action under Article 230 EC.

 Findings of the Court

33      As a preliminary point, it must be recalled that since the conditions of admissibility of an action under Article 230 EC are a matter of public policy, the Court may examine them of its own motion. Its power of review is not limited to the pleas of inadmissibility put forward by the parties (see Case T-55/99 CETM v Commission [2000] ECR II‑3207, paragraph 21 and the case-law cited).

34      According to consistent case-law, only a measure the legal effects of which are binding on, and capable of affecting the interests of, the applicant by bringing about a distinct change in his legal position is an act or decision against which an action for annulment may be brought under Article 230 EC. More specifically, in the case of acts or decisions adopted by a procedure involving several stages, in particular where they are the culmination of an internal procedure, an act is open to review as a rule only if it is a measure definitively laying down the position of the institution on the conclusion of that procedure, and not a provisional measure intended to pave the way for that final decision (Case 60/81 IBM v Commission [1981] ECR 2639, paragraphs 9 and 10, and Case T‑64/89 Automec v Commission [1990] ECR II‑367, paragraph 42).

35      As regards a decision to initiate the formal investigation procedure into State aid, it is however clear from the case-law that, where the Commission classifies a measure in the course of implementation as new aid, such a decision entails independent legal effects, particularly in relation to the suspension of the measure under consideration (Case C‑400/99 Italy v Commission [2001] ECR I‑7303, paragraph 62, and Joined Cases T‑346/99 to T‑348/99 Diputación Foral de Álava and Others v Commission [2002] ECR II‑4259, ‘Diputación Foral de Álava’, paragraph 33). That is plainly the case not only where a measure in the course of implementation is regarded by the authorities of the Member State concerned as existing aid, but also where the authorities take the view that the measure to be formally investigated does not fall within the scope of Article 87(1) EC (see Diputación Foral de Álava, paragraph 33 and the case-law cited).

36      A decision to initiate the formal investigation procedure in relation to a measure in the course of implementation and classified by the Commission as new aid necessarily alters the legal implications of the measure under consideration and the legal position of the recipient firms, particularly as regards the continued implementation of the measure. Until the adoption of such a decision, the Member State, the recipient firms and other economic operators may think that the measure is being lawfully implemented as a general measure not falling within the scope of Article 87(1) EC or as existing aid. On the other hand, after its adoption there is at the very least a significant element of doubt as to the legality of the measure which, without prejudice to the possibility of seeking interim relief from the court, must lead the Member State to suspend its application, since the initiation of the formal investigation procedure excludes the possibility of an immediate decision that the measure is compatible with the common market, which would enable it to continue to be lawfully implemented. Such a decision might also be invoked before a national court called upon to draw all the consequences arising from infringement of the last sentence of Article 88(3) EC. Finally, it is capable of leading the firms which are beneficiaries of the measure to refuse in any event new payments or new advantages or to hold the necessary sums as provision for possible subsequent financial compensations. Businesses will also take account, in their relations with those beneficiaries, of the uncertainty cast on the legal and financial situation of the latter (see Diputación Foral de Álava, paragraph 35 above, paragraph 34 and the case-law cited).

37      In the present case, in the light of the above case-law, it must, first, be held that the contested decision is a decision initiating the formal investigation procedure in respect of the preferential electricity tariff charged inter alia to the applicant’s plants pursuant to Article 11(11) of the 2005 Decree-Law. It is clear from Article 2(2) of Authority Decision No 217/05 – pursuant to which Article 11(11) of the 2005 Decree-Law came into force, retroactively, as of 1 January 2005 – that the measure at issue was in the course of implementation at the time the contested decision was adopted.

38      Second, it is not disputed that the Commission considered in the contested decision that the measure at issue was new aid. That classification is the direct result of the Commission’s findings that the measure, first, did not constitute existing aid and, second, was unlawful aid within the meaning of Article 1(f) of Regulation No 659/1999, since it fell within the scope of Article 87(1) EC and was implemented without having been notified to the Commission (recitals 46 and 47 of the contested decision).

39      Third, in its observations submitted to the Commission on 27 February 2006, the Italian Republic stated, in the context of the preliminary phase of the investigation, that ‘the measure at issue was merely an extension’ of the preferential tariff first put in place by the 1995 Decree-Law, of which the Commission said, in the Alumix decision, that it ‘did not constitute State aid’. Therefore, the Italian Republic objected – in accordance with the case-law cited at paragraph 35 above – to the classification of the measure at issue as new aid, claiming, in essence, that, as the Commission had concluded in the Alumix decision, the measure examined did not fall within the scope of Article 87(1) EC.

40      In this respect, the Commission’s submission that the Italian Republic did not object with sufficient clarity to the classification of the measure at issue as new aid must thus be rejected as unfounded. Moreover, it must be noted in this respect that the Commission itself admitted, in recital 40 of the contested decision, that, in the context of the preliminary phase of the investigation, ‘[t]he Italian authorities submitted that the extension of the preferential tariff granted [to the applicant’s plants] [did] not constitute State aid’.

41      It therefore follows from the foregoing that the contested decision is a decision initiating the formal investigation procedure in respect of a measure which was in the course of implementation when that decision was adopted, that the Commission considered that the measure constituted new aid, and that, during the preliminary phase of the investigation procedure, the Italian Republic had claimed in respect of that measure that it did not constitute State aid.

42      Therefore, in accordance with the case-law cited in paragraphs 34 to 36 above, the contested decision is an act which may be the subject of an action for annulment under Article 230 EC.

43      Moreover, the applicant is directly and individually concerned by the contested decision for the purposes of the fourth paragraph of Article 230 EC, since the decision concerns a measure of which it is the beneficiary (see Case 25/62 Plaumann v Commission [1963] ECR 95, 107; Case C‑225/91 Matra v Commission [1993] ECR I‑3203, paragraph 18 and the case-law cited; and Joined Cases C‑15/98 and C‑105/99 Italy and Sardegna Lines v Commission [2000] ECR I‑8855, paragraph 32).

44      Therefore, it must be held that the present action is admissible.

 Substance

45      The applicant raises three pleas in law in support of its action. By its first plea, the applicant complains that the Commission wrongly classified the electricity tariff payable by its plants as State aid even though that tariff, which corresponds to a market tariff, does not confer any advantage on them. By its second plea, the applicant complains that the Commission infringed the principles of the protection of legitimate expectations and legal certainty, on the ground that the contested decision is inconsistent with the Alumix decision. By its third plea, which it submits in the alternative, the applicant claims that the Commission wrongly examined the measure at issue under the procedure applicable to new aid and not that applicable to existing aid.

 The first plea, concerning the classification of the measure at issue as State aid

46      In support of its first plea, the applicant raises three complaints. However, in so far as, in its first and second complaints, the applicant submits, in essence, that the Commission, on the one hand, failed to fulfil its obligation to examine whether the applicant had enjoyed an advantage in breach of Article 87(1) EC and Article 88(2) EC and, on the other hand, committed a manifest error of assessment in finding that there was an advantage in breach of those two articles, the Court of First Instance considers it appropriate to examine those two complaints together.

 The first and second complaints, alleging that there was no advantage

–       Arguments of the parties

47      The applicant submits that the Commission has not shown that the electricity tariff at issue confers an advantage on its plants that would not have been available to them under normal market conditions. Consequently, the applicant submits that the Commission infringed, first, Article 87(1) EC by wrongly classifying the measure at issue as State aid and, second, Article 88(2) EC by initiating the formal investigation procedure, as well as Articles 4 and 6 of Regulation No 659/1999.

48      By way of a first argument, the applicant submits that the Commission could not find that there was an advantage without establishing first that the tariff paid by the applicant’s plants was not a market tariff. In this respect, the applicant notes first that the fact that the tariff offered to the plants constitutes a ‘reduction’ in the electricity tariff is, as such, irrelevant, since the only question that the Commission needed to answer was whether that tariff conferred an economic advantage on the plants. Moreover, although the contested decision refers to the spot market rate on the Italian Power Exchange (IPEX), the Commission did not however state which tariff it took as a benchmark to find that the electricity tariff charged to the plants was not a market tariff or that those plants benefited from a ‘reduction’ in their electricity tariff. Finally, the spot market rate on IPEX does not in any event constitute a reliable benchmark.

49      By way of a second argument, the applicant claims that the three criteria on the basis of which the Commission concluded, in the Alumix decision, that the tariff granted to the plants did not constitute State aid (‘the three criteria’) are still valid. First, the fact that the tariff offered to the plants remains significantly above the minimum IPEX spot market tariff demonstrates that it covers marginal costs and some fixed costs, which, moreover, the Commission neither examines nor disputes in the contested decision. Next, as the Commission recognises in recital 61 of the contested decision, the electricity supply market remains characterised by over-capacity. Finally, the applicant remains an important customer as it is one of the largest consumers of electricity in Italy and the largest consumer in Sardinia and the Veneto region, which the Commission points out in recital 62 of the contested decision when it acknowledges that the applicant has strong bargaining power.

50      By way of a third argument, the applicant submits that the Commission’s arguments that the contested decision ought to be the subject of a low-intensity review are at odds with the case-law to the effect that the Court must at the very least review whether the Commission has made a manifest error of assessment. That review should be more extensive in this case because, in the contested decision, the Commission classified as aid a measure which, in the Alumix decision, it had considered not to constitute State aid. Furthermore, it is clear from the case-law that the question whether a measure is to be treated as new aid or as existing aid is subject to full judicial review.

51      Moreover, the applicant submits that the Commission implicitly acknowledges that it inadequately examined during the preliminary phase whether the tariff payable by the plants differs from a market tariff, since it does not respond to that argument in the defence. Further, the applicant submits that a thorough examination of the measure at issue was particularly important in the present case because, on the one hand, the classification adopted in the contested decision carries with it the risk that the applicant’s plants will be permanently shut down and, on the other hand, the Commission had expressly concluded in the Alumix decision that the measure did not constitute State aid. In the light of those circumstances, the Commission should have re-examined in the contested decision whether the three criteria which it had considered to be decisive in the Alumix decision were still fulfilled.

52      By way of a fourth argument, the applicant submits, in response to the Commission, that, to the extent that energy markets are not competitive and do not function properly, the Italian Republic’s intervention at the time the Alumix decision was adopted was necessary. Such intervention continues to be necessary because the Italian electricity market continues to be dysfunctional, specifically in Sardinia and the Veneto region.

53      The Commission replies, in essence, that the applicant’s arguments are neither relevant nor well founded.

–       Findings of the Court

54      The applicant submits, in essence, that the Commission infringed Article 87(1) EC and Article 88(2) EC, as well as Articles 4 and 6 of Regulation No 659/1999, when it classified the measure at issue as State aid and initiated the formal investigation procedure even though it had not examined sufficiently whether the tariff granted to the applicant’s plants constituted a market tariff and wrongly concluded that the applicant’s plants enjoyed an advantage.

55      Article 87(1) EC provides that ‘[s]ave as otherwise provided in this Treaty, any aid granted by a Member State or through State resources in any form whatsoever which distorts or threatens to distort competition by favouring certain undertakings or the production of certain goods shall, in so far as it affects trade between Member States, be incompatible with the common market’.

56      Classification as aid – in the sense of State aid that is incompatible with the common market – requires that all the conditions set out in that provision be fulfilled (Case C‑142/87 Belgium v Commission [1990] ECR I‑959, paragraph 25; Case C‑482/99 France v Commission [2002] ECR I‑4397, paragraph 68; and Case C‑280/00 Altmark Trans and Regierungspräsidium Magdeburg [2003] ECR I‑7747, paragraph 74). According to Article 87(1) EC, those conditions are as follows. First, there must be an intervention by the State or through State resources. Second, the intervention must be liable to affect trade between Member States. Third, it must confer an advantage on the recipient by favouring certain undertakings or the production of certain goods. Fourth, it must distort or threaten to distort competition (Altmark Trans and Regierungspräsidium Magdeburg, paragraph 75, and Case T‑34/02 Le Levant 001 and Others v Commission [2006] ECR II‑267, paragraph 110).

57      As concerns, in particular, the third condition referred to in the previous paragraph, measures which, in various forms, mitigate the burdens which are normally included in the budget of an undertaking and which are thereby similar to subsidies constitute benefits for the purposes of Article 87(1) EC, such as, among others, the supply of goods or services on favourable terms (see Case T‑274/01 Valmont v Commission [2004] ECR II‑3145, paragraph 44 and the case-law cited).

58      Moreover, according to consistent case-law, the Commission is required to open the formal investigation procedure if an initial examination does not enable it to overcome all the difficulties raised by the question whether the measure examined constitutes aid for the purposes of Article 87(1) EC, unless, in the course of that initial examination, the Commission is able to satisfy itself that the measure at issue would in any event be compatible with the common market, even if it were aid (Case T‑11/95 BP Chemicals v Commission [1998] ECR II‑3235, paragraph 166, and Diputación Foral de Álava, paragraph 35 above, paragraph 41).

59      That is why, as is clear from Article 6 of Regulation No 659/1999, a decision to initiate the formal investigation procedure must include a ‘preliminary assessment of the Commission as to the aid character of the proposed measure’ (Diputación Foral de Álava, paragraph 35 above, paragraph 42).

60      It follows that the classification of a measure as State aid in a decision to initiate the formal investigation procedure is merely provisional. The very aim of initiating the procedure is to enable the Commission to obtain all the views it needs in order to be able to adopt a definitive decision on the point (see, to that effect, Case C‑204/97 Portugal v Commission [2001] ECR I‑3175, paragraph 33; Joined Cases T‑371/94 and T‑394/94 British Airwaysand Others v Commission [1998] ECR II‑2405, paragraph 59; and Diputación Foral de Álava, paragraph 35 above, paragraph 43).

61      In order to avoid confusion between the administrative and judicial proceedings, and to preserve the division of powers between the Commission and the Community Courts, any review by the Court of First Instance of the legality of a decision to initiate the formal investigation procedure must necessarily be limited (see, to that effect, IBM v Commission, paragraph 34 above, paragraph 20). The Community Courts must in fact avoid giving a final ruling on questions on which the Commission has merely formed a provisional view (Diputación Foral de Álava, paragraph 35 above, paragraph 44).

62      Thus, where in an action against a decision to initiate the formal investigation procedure the applicants challenge the Commission’s assessment of a measure as constituting State aid, review by the Community Courts is limited to ascertaining whether or not the Commission has made a manifest error of assessment in forming the view that it was unable to resolve all the difficulties on that point during its initial examination of the measure concerned (Diputación Foral de Álava, paragraph 35 above, paragraph 45).

63      In the light of the above case-law, the Court must therefore establish whether, in the present case, the Commission did not make a manifest error of assessment in taking the provisional view in the contested decision that the electricity tariff laid down by the 1995 Decree-Law, as extended by the 2005 Decree-Law, conferred an advantage on the applicant’s plants and, consequently, that the measure constituted State aid.

64      As a preliminary point, it must be noted that the provisional view taken by the Commission in the contested decision, that the measure at issue conferred an advantage on the applicant’s plants and that it constituted State aid, was based on two findings. First, Article 11(11) of the 2005 Decree-Law and Authority Decision No 217/05, which implemented that Decree-Law, extend until 31 December 2010 the grant to the applicant of the electricity tariff which it enjoyed in 2004 under the 1995 Decree-Law, while providing for that tariff to increase by a maximum of 4% per annum in the event that annual reference prices at the energy exchanges in Frankfurt am Main and Amsterdam went up (recitals 3, 6, 7 and 20).

65      Second, pursuant to Authority Decision No 148/04, responsibility for administering the tariff was given to the Equalisation Fund, which directly reimburses the applicant with the difference between the electricity tariff charged to its plants and the tariff laid down in the 2005 Decree-Law (recital 5 of the contested decision).

66      It is in the light of those two findings that, in the contested decision, the Commission took the view, first, that the applicant enjoys a reduction in the tariff payable by its plants which is financed through State resources generated through a special levy paid by all electricity users (recital 44) and, second, that the measure at issue confers a significant economic advantage on the applicant, given that the supply of electricity makes up the largest part of its production costs (recital 43).

67      In the first place, it must be noted that, in addition to the fact that it is not disputed that the 2005 Decree-Law extends until 2010 the preferential tariff which was granted to the plants by the 1995 Decree‑Law, the applicant does not challenge the Commission’s assessment that the resources used to finance the tariff at issue constitute State resources. Furthermore, the applicant does not challenge the Commission’s assessment that the mechanism by which the Equalisation Fund reimburses it with the difference between the tariff charged to its plants by ENEL and the preferential tariff extended pursuant to the 2005 Decree-Law until the end of 2010 leads to a reduction in the final electricity tariff that the plants would have to pay if that mechanism did not apply to them. In this respect, it must be noted that the applicant merely submits that the tariff which its plants pay is a market tariff and, consequently, does not constitute an advantage.

68      In the second place, given that the very nature of the preferential tariff means that the Equalisation Fund uses public resources to reimburse the applicant with the difference between the electricity tariff charged to the plants by ENEL and the tariff laid down in the 1995 Decree-Law, that finding alone explains why the Commission could not rule out, during the preliminary phase of the investigation, that the applicant’s plants do not bear the full extent of the burdens which should normally have been included in their budgets, within the meaning of the case-law cited in paragraph 57 above, and they therefore enjoy an advantage.

69      Consequently, it must be held that the Commission did not make a manifest error of assessment in taking the provisional view that the measure at issue conferred an advantage on the applicant’s plants.

70      In this respect, it is appropriate to reject as irrelevant the applicant’s arguments that the Commission ought to have established whether the tariff at issue corresponded to a market tariff and whether the criteria on the basis of which the Commission found in the Alumix decision that no advantage had been conferred remained valid. In accordance with the case-law cited in paragraphs 57 to 59 above, whether the tariff granted to the plants does or does not constitute a market tariff requires a complex economic assessment which it is for the Commission to carry out as part of the formal investigation procedure.

71      Moreover, as regards the applicant’s argument that, in this case, State intervention is necessary because the energy markets, specifically in Sardinia and the Veneto region, continue to be dysfunctional, it must be recalled that the Court of Justice has held, as regards the alleged compensatory function of aid in a situation of objective competitive disadvantage, that the fact that a Member State seeks to approximate, by unilateral measures, the conditions of competition in a particular sector of the economy to those prevailing in other Member States cannot deprive the measures in question of their character as aid (see Case C‑372/97 Italy v Commission [2004] ECR I‑3679, paragraph 67 and the case-law cited). Therefore, it follows from the foregoing that, even if the measure at issue is intended in the present case to compensate the applicant’s plants for an objective competitive disadvantage resulting from the fact that the electricity market in Sardinia or the Venetio region is dysfunctional, the fact remains that the Commission did not make any manifest error of assessment when it provisionally classified the said measure as State aid. Therefore, the argument must be rejected as unfounded.

72      In the light of the foregoing, the applicant’s first and second complaints must be rejected.

 The third complaint, alleging failure to state adequate reasons in the contested decision

–       Arguments of the parties

73      The applicant claims, in essence, that the Commission infringed Article 253 EC and the case-law related to that article. By way of a first argument, the applicant claims that, in the contested decision, the Commission failed to provide adequate reasons for its findings, on the one hand, that the tariff offered to the plants constituted unlawful new aid and, on the other hand, that the criteria which it had considered to be decisive in the Alumix decision in order to reach the conclusion that there was no State aid were no longer relevant, especially in a situation where the Commission considered that the aid consisted of the full amount of the difference between the tariff offered to the applicant and the average spot market rate on IPEX.

74      By way of a second argument, the applicant submits that the Commission did not state the reasons for which it considered that the tariff offered to the applicant’s plants conferred an advantage on them in the form of State aid and that the other constituent elements for a finding of State aid, namely financing from State resources, distortion of competition, and impact on trade between Member States, were present in this case.

75      By way of a third argument, the applicant submits that the Commission failed to fulfil its obligation to identify the amount of the alleged aid since the contested decision does not state clearly whether the Commission considered that the aid consisted of the full difference between the tariff charged to the plants and the average spot market rate on IPEX.

76      By way of a fourth argument, the applicant submits that the Commission implicitly acknowledges in its submissions that the contested decision provides an inadequate statement of reasons, since it merely claims that the applicant was aware of the reasons for the contested decision because of the statement of reasons in another decision, namely the Portovesme decision.

77      The Commission contends, in essence, that it has not infringed Article 253 EC.

–       Findings of the Court

78      According to consistent case-law, the statement of reasons required by Article 253 EC must be appropriate to the act at issue and must disclose in a clear and unequivocal fashion the reasoning followed by the institution which adopted the measure in question in such a way as to enable the persons concerned to ascertain the reasons for the measure and to enable the competent Community court to exercise its power of review. It is not necessary for the reasoning to go into all the relevant facts and points of law, since the question whether the statement of reasons meets the requirements of Article 253 EC must be assessed with regard not only to its wording but also to its context and to all the legal rules governing the matter in question (Case C‑367/95 P Commission v Sytraval and Brink’s France [1998] ECR I-1719, paragraph 63; Diputación Foral de Álava, paragraph 35 above, paragraph 98; and Joined Cases T‑269/99, T‑271/99 and T‑272/99 Diputación Foral de Guipúzcoaand Others v Commission [2002] ECR II‑4217, paragraph 103).

79      In order to determine the extent of the obligation to state reasons for a decision to initiate the formal investigation procedure it should be remembered that, according to Article 6 of Regulation No 659/1999, where the Commission decides to initiate the formal investigation procedure, it is permissible for the decision initiating the procedure merely to summarise the relevant issues of fact and law, include a ‘preliminary assessment’ as to the aid character of the State measure in question and set out its doubts as to the measure’s compatibility with the common market (Diputación Foral de Álava, paragraph 35 above, paragraph 99, and Diputación Foral de Guipúzcoaand Others v Commission, paragraph 78 above, paragraph 104).

80      Accordingly, a decision to initiate the procedure must give interested parties the opportunity effectively to participate in the formal investigation procedure, during which they will have the opportunity to put forward their arguments. For that purpose, it is sufficient for the parties concerned to be aware of the reasoning which led the Commission to conclude provisionally that the measure in issue might constitute new aid incompatible with the common market (Joined Cases T‑195/01 and T‑207/01 Government of Gibraltar v Commission [2002] ECR II‑2309, paragraph 138; Diputación Foral de Álava, paragraph 35 above, paragraph 100; and Diputación Foral de Guipúzcoa and Others v Commission, paragraph 78 above, paragraph 105).

81      In the present case, the Commission clearly states in the contested decision the reasons for which, first, it concluded provisionally that the measure at issue constituted State aid, particularly in that it conferred an advantage on the applicant’s plants (recitals 40 to 47) and, second, it had serious doubts as regards the compatibility of the aid with the common market (recitals 48 to 77).

82      Consequently, contrary to the applicant’s assertion that the Commission implicitly acknowledges that the contested decision provides an inadequate statement of reasons, the Commission has not infringed Article 253 EC since the reasons set out in the contested decision enabled the applicant to ascertain the reasoning which led the Commission to adopt the contested decision and the Community court to carry out its review.

83      The arguments which the applicant puts forward in this respect cannot undermine that finding.

84      In the first place, as regards the argument that the Commission has not adequately stated the reasons for which it considered that the measure at issue affects trade between Member States and distorts competition, it must be recalled that, according to the case-law, the Commission is not required, in respect of a final decision declaring aid to be incompatible with the common market, to carry out an extremely detailed analysis supported by statistics, as long as it explains how trade between Member States was affected and competition distorted. Furthermore, in the case of aid which has not been notified to the Commission, the decision finding that such aid is incompatible with the common market does not have to be based on a demonstration of the actual effect of that aid on competition or on trade between Member States. To decide otherwise would ultimately be to favour those Member States which grant aid in breach of the duty to notify laid down in Article 88(2) EC, to the detriment of those which do notify aid at the planning stage (see, to that effect, Case C‑113/00 Spain v Commission [2002] ECR I‑7601, paragraph 54; Case T‑214/95 Vlaams Gewest v Commission [1998] ECR II‑717, paragraphs 64 and 67; and Joined Cases T‑204/97 and T‑270/97 EPAC v Commission [2000] ECR II‑2267, paragraph 85).

85      By stating, in recitals 45 and 46 of the contested decision, that the measure at issue ‘strengthen[ed] the financial situation of [the applicant], which benefit[ed] from a reduction in its costs that its competitors which do not receive aid do not enjoy’, and that ‘given that aluminium is traded on international markets, the preferential tariff [could] affect intra-Community trade’, the Commission has, in the light of the case-law cited in the previous paragraph, adequately stated the reasons for which it considered that the measure affected trade between Member States and distorted competition, especially since the contested decision was merely a decision to initiate the formal investigation procedure and not a final decision.

86      In the second place, it is appropriate to reject the applicant’s argument that the Commission did not set out the reasons for which it considered in the contested decision that the measure at issue was financed through public resources given that, as is apparent from the relevant passages in the contested decision reproduced in paragraph 17 above, those reasons were expressly mentioned.

87      In the third place, it is appropriate to reject as unfounded the applicant’s arguments that the Commission, on the one hand, failed to fulfil its obligation to identify the amount of aid that the applicant’s plants received and, on the other hand, failed to state adequately the reasons for which it considered, where relevant, that the alleged aid amounted to the difference between the tariff offered to the applicant and the average spot market rate on IPEX. It must be held that, in addition to the fact that the Commission does not take any position in this respect in the contested decision and that it moreover invites the Italian Republic, in recital 80 of the contested decision, to ‘provide it with any information that could help with assessing the aid’, the Commission is merely required, in accordance with the case-law cited in paragraphs 79 and 80 above, to identify in the decision to initiate the formal investigation procedure the reasons that led it to consider that a measure constitutes aid that is incompatible with the common market, and not to specify the amount of aid that the recipient of that aid allegedly received.

88      In the fourth place, it is appropriate to reject as unfounded the argument that the Commission failed to fulfil its obligation to provide a statement of reasons in the contested decision in respect of the three criteria that had led it to consider, in the Alumix decision, that the tariff offered to the applicant’s plants did not constitute State aid. As stated in paragraph 70 above, since the Commission was not required to determine, during the preliminary phase of the investigation, whether the electricity tariff granted to the applicant’s plants constituted a market tariff, as this would have involved a complex economic assessment, it cannot be held that the fact that the measure at issue was not assessed in the light of the criteria applied in the Alumix decision mars the statement of reasons in the contested decision.

89      Consequently, the third complaint and the first plea must be rejected in their entirety.

 The second plea, alleging infringement of the principles of the protection of legitimate expectations and legal certainty

 Arguments of the parties

90      By way of a first argument, the applicant submits that, by departing, in the contested decision, from the reasoning and the conclusion of the Alumix decision, the Commission infringed the principles of the protection of legitimate expectations and legal certainty as defined by the case-law. In this respect, the applicant criticises the Commission in the reply for classifying the measure at issue as State aid without identifying clearly and precisely the changes that occurred between the adoption of the Alumix decision and the adoption of the contested decision. That failure to provide reasons constitutes an infringement of the principles of legal certainty and the protection of legitimate expectations.

91      By way of a second argument, the applicant submits that the conditions which, pursuant to the case-law, have to be fulfilled for the Commission to revoke the Alumix decision are not fulfilled in the present case. In this respect, the applicant submits that the Commission’s assessment in the contested decision that the measure at issue constitutes new aid because the Alumix decision remained valid only until 31 December 2005 is wrong.

92      First, the applicant submits that, even though it does not dispute that the 1995 Decree-Law was of limited temporal scope, the fact remains that there is nothing in the contested decision to indicate that the Alumix decision was valid only for the period prescribed by the 1995 Decree‑Law. Furthermore, the mere fact that the 2005 Decree-Law extended the electricity tariff at issue until 31 December 2010 does not in any way make the Alumix decision less binding, in so far as the reasoning and the fundamental logic underlying that decision are general and unconditional. The applicant has a right to expect that the reasoning underlying the Alumix decision remains applicable for as long as the three criteria, which are set out in paragraph 49 above and which were considered to be relevant in the Alumix decision, remain valid.

93      The applicant submits further that the Commission wrongly considered that, in the Alumix decision, it had ‘approved’ an electricity tariff for a certain period of time, whereas it had merely ‘made a finding’ that there was no State aid, without stating that its assessment related to a limited period only. In this respect, the Commission is wrong not to distinguish between a measure which it found not to be State aid and a measure which it declared compatible with the common market for a limited period only.

94      Finally, the applicant submits that the Commission acknowledges in its submissions that, even if the Alumix decision were valid for a certain period only, the mere fact that the tariff granted to the plants was extended beyond the initial period cannot automatically turn that measure into State aid.

95      Second, the applicant submits that the Commission did not establish in the contested decision or claim in its submissions that the three criteria on which the Alumix decision was based had evolved in such a way that a reopening of a formal investigation procedure was justified. On the contrary, the contested decision actually confirmed that the circumstances which had led the Commission to find in the Alumix decision that there was no State aid had not changed since.

96      To begin with, the applicant submits that the Commission did not state in the contested decision that the Alumix decision contained errors at the time of its adoption, that the facts relied on to reach that decision were wrong or that the criteria relied on to find that the tariff charged to the plants was compatible with normal market behaviour were wrong.

97      Next, the applicant submits that, beyond the abstract references in recital 41 of the contested decision to changes in legislation and market conditions, the Commission does not identify any particular alteration affecting the three criteria which had led it to find, in the Alumix decision, that no State aid was being granted. Alterations in the implementation of the tariff for the applicant’s plants, such as the Equalisation Fund being entrusted with administering the tariff granted to them, do not constitute substantive alterations to the measure examined.

98      Finally, the applicant submits that, as part of the procedure that led to the adoption of Decision N/490/2000 of 1 December 2004 concerning State aid – Italy, stranded costs in the electricity sector (OJ 2005 C 250, p. 9; ‘the decision on stranded costs’), the Commission had classified a number of special tariff regimes administered by the Equalisation Fund as ‘existing aid’. Since the Commission did not state in the contested decision that, after it had adopted the decision on stranded costs, substantive alterations were made in the administration by the Equalisation Fund of the tariff system granted to the applicant, even though the Commission had been informed of those alterations in the relevant notifications by the Italian Republic, it could not reclassify the measure at issue as new aid.

99      The Commission contends, on the one hand, that the second plea in law raised by the applicant in the reply, that ‘the Commission cannot arbitrarily depart from [the reasoning in the Alumix decision] by re-opening formal proceedings against the tariffs [at issue] without explaining why [that reasoning] no longer holds’, is inadmissible under Article 48(2) of the Rules of Procedure and, on the other hand, that it has not acted in breach of the principles of the protection of legitimate expectations and legal certainty.

 Findings of the Court

100    In the first place, it is appropriate to reject as unfounded the Commission’s claim that the argument submitted by the applicant in the reply as part of the second plea – according to which ‘the Commission cannot arbitrarily depart from [the reasoning in the Alumix decision] by re-opening formal proceedings against the tariffs [at issue] without explaining why [that reasoning] no longer holds’ – is inadmissible, pursuant to Article 48(2) of the Rules of Procedure.

101    As part of the second plea, the applicant submits an argument, both in the application and in the reply, that it has also made as part of the third complaint of the first plea, namely that the Commission failed to fulfil its obligation to state in the contested decision the reasons for which it considered that the measure at issue constituted State aid despite the conclusion that it had reached in the Alumix decision. Therefore, it must be held that the argument set out in the reply is not a new plea within the meaning of Article 48(2) of the Rules of Procedure.

102    In the second place, it must be recalled that it is apparent from the case-law that the principle of the protection of legitimate expectations is one of the fundamental principles of the Community (Case C‑104/97 P Atlanta v European Community [1999] ECR I‑6983, paragraph 52). Accordingly, any trader in regard to whom an institution has given rise to justified hopes may rely on the principle of the protection of legitimate expectations. However, if a prudent and discriminating trader could have foreseen the adoption of a Community measure likely to affect his interests, he cannot plead that principle if the measure is adopted (Case 78/77 Lührs [1978] ECR 169, paragraph 6; Case 265/85 Van den Bergh en Jurgens v Commission [1987] ECR 1155, paragraph 44; and Case T‑489/93 Unifruit Hellas v Commission [1994] ECR II‑1201, paragraph 51). Furthermore, a person may not plead a breach of the principle of the protection of legitimate expectations unless the administration has given him precise assurances (Case T‑571/93 Lefebvre and Others v Commission [1995] ECR II‑2379, paragraph 72, and Diputación Foral de Álava, paragraph 35 above, paragraph 93).

103    Moreover, the principle of legal certainty in its various forms aims to ensure that situations and legal relationships governed by Community law remain foreseeable (Case C‑63/93 Duff and Others [1996] ECR I‑569, paragraph 20, and Case T‑73/95 Oliveira v Commission [1997] ECR II‑381, paragraph 29).

104    In the light of the above case-law, it is appropriate to examine, in the present case, whether by classifying the measure examined as new aid the Commission acted in breach of the principles of the protection of legitimate expectations and legal certainty which the applicant could rely on following the adoption of the Alumix decision.

105    In the Alumix decision, the Commission considered that the electricity tariff that ENEL was to charge the plants from 1996 to 2005 pursuant to IPC decision No 13/92 did not constitute State aid since the tariff was set at a level consistent with the conduct of a rational electricity supplier operating on the market, having regard, in particular, to the fact that that tariff covered marginal costs and a part of the fixed costs, that the market was suffering from overcapacity and that the applicant, engaged in an industry that consumes large amounts of electricity, had a significant amount of bargaining power. In addition, it must be noted that, even though in the Alumix decision the Commission did not expressly refer to the 1995 Decree-Law, it is very clear both from the application, which states that the tariff that the applicant’s plants paid was authorised by the 1995 Decree-Law, and the very wording of that Decree-Law that ‘the privatisation of [Alumix] requires the support of the Italian Government … in order to define an energy tariff [for the two plants] with ENEL, possibly by agreeing on a future long-term contract (10 years) at prices that are competitive at the European level’ and that ‘the manner of handling the excess charges [“sovrapprezzi”] laid down in [IPC decision No 13/92] … is abolished from 31 December 2005 onwards. After that date, treatment of the plants shall be brought in line with that laid down for all users’.

106    Therefore, it must be held that the Commission’s assessment in the Alumix decision that the tariff that ENEL was going to charge the plants from 1996 to 2005 did not constitute State aid took into consideration the market conditions as foreseeable by the Commission for that period.

107    In the contested decision, the Commission does not question its assessment of the measure examined in the Alumix decision. The Commission indicates in the contested decision that the extension under the 2005 Decree-Law, of which it was not notified, of the tariff granted to the applicant’s plants until 2010 may constitute State aid. The Commission’s concerns are based, on the one hand, on the assessment that ‘the Commission’s approval [of that tariff in the Alumix decision] is of limited duration precisely because that approval is based on an economic assessment of the circumstances prevailing at a given time’ and that ‘[c]onsequently, that approval cannot be relied on to cover an extension of the measure as provided for in the [2005] Decree-Law’. On the other hand, the tariff as granted to the plants is financed through State resources, allowing those plants to benefit from a reduction in the tariff which they would otherwise have to pay (recitals 44 and 47 of the contested decision).

108    Therefore, it must be concluded that the applicant could not, on the basis of the Alumix decision, have any legitimate expectations that the Commission would find, in the context of the contested decision, that the tariff granted to the plants did not constitute State aid.

109    Consequently, the Commission did not infringe the principles of the protection of legitimate expectations and legal certainty when it adopted the contested decision.

110    That finding cannot be undermined by the applicant’s arguments.

111    First, for the reason given in paragraphs 106 and 107 above, it is appropriate to reject as irrelevant the applicant’s arguments that, in the contested decision, (i) the Commission could not ‘revisit’ its assessment in the Alumix decision that the measure at issue did not constitute State aid, (ii) the Commission wrongly found that it had ‘approved’ the measure at issue for a limited period even though it had found that the measure did not constitute State aid, and (iii) the extension in time of a measure initially recognised as not constituting State aid did not automatically transform that measure into new aid.

112    Second, it is irrelevant to argue that the Commission could not conclude in the contested decision that the measure at issue constituted new aid even though, on the one hand, it had considered, in the decision on stranded costs, that the special tariffs administered by the Equalisation Fund constituted ‘existing aid’ and, on the other hand, it had been informed, as part of the notification made to the Commission on that occasion, that the applicant’s plants benefited from a reimbursement of an amount corresponding to the difference between the tariff laid down in the 1995 Decree-Law and the tariff charged.

113    On the one hand, it should be noted in this respect that the decision on stranded costs does not concern the mechanism that the Equalisation Fund uses to reimburse the plants with part of the tariff payable by them, which is the subject of the present proceedings, but concerns the scheme under which ENEL is reimbursed for stranded costs resulting from the liberalisation of the electricity market.

114    On the other hand, even if the Commission had been informed, as part of the notification by the Italian Republic of the measures that led to the adoption of the decision on stranded costs, that the applicant’s plants would benefit from a reimbursement equivalent to the difference between the tariff laid down by the 1995 Decree-Law and the tariff charged by ENEL, that has no bearing on the fact that the Commission did not, on that occasion, give any precise assurances to the applicant that, if the preferential tariff were extended, it would not, because of a change in the duration of the measure at issue, have to be considered new aid (see, to that effect, Joined Cases T‑127/99, T‑129/99 and T‑148/99 Diputación Foral de Álava and Others v Commission [2002] ECR II‑1275, paragraph 175).

115    In the light of all of the foregoing, the second plea must be rejected.

 The third plea, concerning examination of the measure at issue under the rules applicable to new aid

 Arguments of the parties

116    By way of an alternative plea, the applicant submits that, by classifying the tariff payable by its plants as unlawful new aid within the meaning of Article 1(f) of Regulation No 659/1999 and Article 13 of that regulation, the Commission infringed Article 88 EC, Articles 17 to 19 of Regulation No 659/1999 and the principles of legal certainty and the protection of legitimate expectations. In this respect, the applicant explains, in response to the Commission’s arguments, that, as part of the third plea, rather than the second plea, it submits that the Commission should have applied the procedure applicable to existing aid and not that applicable to new aid.

117    By way of a first argument, the applicant considers that the first sentence of Article 1(b)(v) of Regulation No 659/1999 makes it very clear that a measure which does not constitute aid at the moment it is put into effect, but which becomes aid due to the evolution of the common market, is deemed to be existing aid. Consequently, the Commission should in the present case have treated the measure at issue as existing aid since the contested decision shows that the Commission considered the measure to have become aid due to the evolution of the common market.

118    In this respect, the applicant explains that, even though the Commission did not rely, in the contested decision, on the second sentence of Article 1(b)(v) of Regulation No 659/1999, that provision actually could not apply in the present case. First, the Commission did not state that the liberalisation of the electricity market brought with it alterations that should have been taken into account to assess the tariff payable by the applicant’s plants. Furthermore, the applicant points out that the Italian electricity market was liberalised before Regulation No 659/1999 was adopted, which consequently precludes the application of the second sentence of Article 1(b)(v) of Regulation No 659/1999 in the present case. In addition, that provision applies in any event only to measures that become aid as a direct result of liberalisation. Moreover, the second sentence of Article 1(b)(v) of Regulation No 659/1999 does not indicate clearly whether measures that become aid following the liberalisation of a market must be treated as new aid or whether the Commission is precluded from revisiting such measures. Finally, the second sentence of Article 1(b)(v) of Regulation No 659/1999 should not be interpreted as meaning that the Commission has the right to apply, under such circumstances, the procedure applicable to new aid.

119    By way of a second argument, the applicant submits that, although the Commission refers, in recitals 20 and 47 of the contested decision, to the extension of the tariff at issue until 31 December 2010 and although that extension constitutes the subject-matter of that decision, the Commission does not however find that that extension is an alteration within the meaning of Article 1(b)(v) of Regulation No 659/1999, or explain how that is so. Furthermore, the applicant submits that, in any event, the mere fact that the electricity tariff granted to the plants was extended does not enable classification of the measure at issue as new aid. Finally, as regards the Commission’s argument that the fact that the tariff laid down in the 1995 Decree-Law disappeared is decisive, the applicant submits that that alteration was the result of the evolution of the common market and not, as such, of the measure at issue.

120    By way of a third argument, the applicant submits that, while the Commission also refers, in recitals 7, 18 and 41 of the contested decision, to alterations linked, on the one hand, to the fact that the Equalisation Fund is responsible for administering the tariffs at issue and, on the other hand, to the mechanism for updating that tariff, the Commission does not however consider that those elements constitute an alteration within the meaning of Article 1(b)(v) of Regulation No 659/1999.

121    To begin with, the applicant claims that, in any event, transferring responsibility for administering the tariff regime to the Equalisation Fund does not alter, within the meaning of the case-law, the substance of the tariff applied to it. The transfer of responsibility for administering the tariff regime at issue took place in 2004 on the basis of Authority Decision No 148/04, and not on the basis of Article 11(11) of the 2005 Decree-Law, which is the only provision referred to by the contested decision. Furthermore, whilst it is true that responsibility for administering the special tariffs was transferred from local electricity distributors to the Equalisation Fund pursuant to Authority Decision No 148/04, this was however a purely formal amendment aimed only at safeguarding the confidentiality of commercial data and ensuring better control of the regime, and it did not alter the substance of the tariffs payable by the applicant. Further, the Commission expressly found in the decision on stranded costs that, since these were alterations of an administrative nature, the fact that the Equalisation Fund is responsible for administering the tariffs did not alter the ‘existing aid’ nature of the special tariff regimes. Moreover, the Commission never claimed that changes in the way the tariff regimes were administered altered the tariff paid by the applicant. In addition, these changes of an administrative nature have no effect whatsoever on the Commission’s findings in the Alumix decision.

122    Further, the applicant adds that the Commission’s argument that, because of the adoption of Authority Decision No 148/04, only the conduct on the market of the State should be taken into consideration, and not ENEL’s, is unfounded because ENEL’s conduct had, since the 1995 Decree-Law, been dictated by the State. The question is not whether or not the applicant’s plants receive a reimbursement of the tariff applied to them, but whether it is rational for an electricity provider operating in a competitive market to fix the electricity tariff at the level charged to the plants. As electricity markets are not competitive, it is not possible to apply the market economy operator test less rigorously by simply referring to ENEL’s current conduct, as the Commission does.

123    In addition, the applicant submits that the change to the updating mechanism, namely capping the annual increase in the tariff paid by the applicant at 4%, does not alter, within the meaning of the case-law, the substance of the tariff applied to the plants, since it was introduced by Article 11(13) of the 2005 Decree-Law and not by Article 11(11) of that Decree-Law, which is the only provision covered by the contested decision, and that that alteration is clearly severable from the initial regime.

124    Finally, the applicant submits that, on the one hand, the Commission should have taken a view on whether the tariff granted to the plants constituted an aid scheme and, on the other hand, the Commission was wrong to consider, as is clear from the summary of the contested decision prepared by the Commission and published in the Official Journal of the European Union, that an aid scheme cannot be linked to only one undertaking.

125    The Commission contends, in essence, that the third plea ought to be rejected on the same grounds as the second plea.

 Findings of the Court

126    In the first place, it is appropriate to reject as unfounded the Commission’s arguments that the third plea should, on the one hand, be declared inadmissible, since it is merely a recasting of the second plea and, on the other hand, be set aside for abuse of process in so far as it is based, in essence, on a misinterpretation of the contested decision.

127    In this respect, it must be noted that, in contrast to the second plea alleging infringement of the principles of the protection of legitimate expectations and legal certainty, the applicant by its third plea criticises the fact that the Commission examined the measure at issue under the procedure applicable to new aid. Further, it must be held that a misinterpretation of the contested decision cannot, as such, be sufficient to constitute abuse of process.

128    In the second place, as regards the applicant’s argument that, in essence, the Commission should have examined the measure at issue under the procedure applicable to existing aid and not that applicable to new aid because it does not constitute a substantive alteration of the measure covered by the Alumix decision, it must be recalled that, according to the case-law, in the event of an alteration to existing aid, it is only where the alteration affects the actual substance of the original scheme that that scheme is transformed into a new aid scheme. There can be no question of such a substantive alteration where the new element is clearly severable from the initial scheme (Government of Gibraltar v Commission, paragraph 80 above, point 111). However, as regards the extension of aid already in the course of implementation, the case-law shows that, because of the amendment to the duration of the aid in question, it should also be regarded as new aid (see, to that effect, Diputación Foral de Álavaand Others v Commission, paragraph 114 above, paragraph 175).

129    It follows that, where a measure that the Commission considered not to constitute State aid is extended or altered with regard to its very substance, the Commission can examine it only under the procedural rules applicable to new aid.

130    In the present case, it is not disputed that, by opening the formal investigation procedure, the Commission applied the procedural rules on new aid to the measure at issue. It must be noted, as stated in paragraph 107 above, that the measure examined in the contested decision constitutes a measure that is distinct from that previously examined by the Commission in the context of the Alumix decision.

131    On the one hand, in the Alumix decision, the Commission concluded, in essence, that the tariff that ENEL was going to charge the plants from 1996 to 2005 pursuant to the 1995 Decree-Law was equivalent to a market tariff, so that they would not be granted any advantage through State resources. On the other hand, in the contested decision, the Commission takes the provisional view that part of the electricity tariff ENEL was going to charge the plants from 2005 to 2010 will be reimbursed to them by the Equalisation Fund, namely an amount equivalent to the difference between the tariff charged by ENEL and the tariff laid down in the 1995 Decree-Law, so that the plants will benefit, through State resources, from an advantage consisting in a reduction in the electricity tariff that they would otherwise have had to pay.

132    Therefore, it must be held that the measure at issue cannot be considered to be existing aid, not only because it covers a period that is different from that examined in the Alumix decision, but also because it consists no longer in ENEL applying the tariff laid down in the 1995 Decree-Law, which was equivalent to a market tariff, but in the grant of a reimbursement by the Equalisation Fund from public resources, in order to offset the difference between the tariff charged by ENEL and that laid down in the 1995 Decree-Law, as extended by the 2005 Decree-Law.

133    Consequently, it must be held that the Commission has not made a manifest error of assessment by examining the measure at issue under the procedure applicable to new aid and not that applicable to existing aid.

134    In this respect, it is appropriate, first, to dismiss as unfounded, for the reasons set out in paragraph 131 above, all the applicant’s arguments that extending the tariff put in place by the 1995 Decree-Law, making the Equalisation Fund responsible for administering that tariff or even limiting the increase in the tariff granted to the plants to no more than 4% per annum, constitute non-substantive alterations to the measure examined in the Alumix decision.

135    Further, it is appropriate to reject as unfounded the applicant’s argument that the Commission was under an obligation to examine the measure at issue under the procedure applicable to existing aid, in so far as the Commission allegedly found that the measure became State aid due to the evolution of the common market within the meaning of the first sentence of Article 1(b)(v) of Regulation No 659/1999. Even though the Commission essentially states in recital 41 of the contested decision that the electricity market was liberalised, that is only on the ground, set out in recital 47 of the contested decision, that ‘the Commission’s approval [in the Alumix decision] is of limited duration precisely because that approval is based on an economic assessment of the circumstances prevailing at a given time’ and, consequently, that ‘the Alumix decision cannot be relied on to cover an extension of the measure laid down in the [2005] Decree-Law’.

136    Finally, the applicant’s argument that, on the one hand, the Commission should have taken a position on whether the tariff granted to the plants constituted an aid scheme and, on the other hand, an aid scheme cannot be linked to only one undertaking, as the Commission allegedly wrongly stated in the summary of the decision published in the Official Journal of the European Union, must be rejected because, in any event, it has no effect on the Commission’s provisional finding that the measure at issue constituted aid that was incompatible with the common market.

137    In the light of all of the foregoing, the third plea must be rejected and the application dismissed in its entirety.

 Costs

138    Under Article 87(2) of the Rules of Procedure, the unsuccessful party is to be ordered to pay the costs if they have been applied for in the successful party’s pleadings. As the applicant has been unsuccessful and the Commission has applied for costs, the applicant must be ordered to pay the costs.

On those grounds,

THE COURT OF FIRST INSTANCE (First Chamber)

hereby:

1.      Dismisses the action;

2.      Orders Alcoa Trasformazioni Srl to bear its own costs and to pay those incurred by the Commission.

Tiili Dehousse Wiszniewska-Białecka

Delivered in open court in Luxembourg on 25 March 2009.

Table of contents

Legal context

Background to the dispute

Procedure and forms of order sought by the parties

Admissibility

Arguments of the parties

Findings of the Court

Substance

The first plea, concerning the classification of the measure at issue as State aid

The first and second complaints, that there was no advantage

– Arguments of the parties

– Findings of the Court

The third complaint, alleging failure to state adequate reasons in the contested decision

– Arguments of the parties

– Findings of the Court

The second plea, alleging infringement of the principles of the protection of legitimate expectations and legal certainty

Arguments of the parties

Findings of the Court

The third plea, concerning examination of the measure at issue under the rules applicable to new aid

Arguments of the parties

Findings of the Court

Costs

* Language of the case: English.