OPINION OF ADVOCATE GENERAL
KOKOTT
delivered on 11 July 2024 (1)
Case C‑121/23 P
Swissgrid AG
v
European Commission
(Appeal – Internal market for electricity – Regulation (EU) 2017/2195 – Article 1(6) and (7) – Transmission system operators (TSOs) – Participation in the European platforms for the exchange of standard products for balancing energy – European TERRE platform – Letter from the European Commission refusing the participation of a TSO operating in Switzerland and requiring its exclusion – Action for annulment – Article 263 TFEU – Actionable measure – Direct concern – Unfettered discretion – No individual right to authorisation – Right to diligent and impartial treatment of the case file and to a reasoned statement of position – Right to be heard – Article 47 of the Charter of Fundamental Rights of the European Union – Right to an effective judicial remedy)
I. Introduction
1. The present case will provide the Court with the opportunity to clarify the scope of the concept of ‘actionable measure’ or ‘challengeable act’ and, where appropriate, its connections with the concept of ‘direct concern’ within the meaning of the fourth paragraph of Article 263 TFEU.
2. The case has as its subject matter a situation in which the EU legislation on the basis of which the act at issue was adopted, namely Regulation (EU) 2017/2195, (2) reserves to the institution which adopted it, namely the European Commission, a broad discretion (pouvoir d’appréciation), or even an unfettered discretion (pouvoir discrétionnaire), in relation to the adoption of an authorisation. Thus, in the absence of a mandatory duty placed on the Commission in that respect, conversely, the economic operators concerned cannot rely on an individual right to obtain such authorisation. In such a situation, is it permissible to consider that an act refusing that authorisation cannot be challenged by such operators on the ground that it is not intended to ‘have legal effects capable of affecting [their] interests … by bringing about a distinct change in [their] legal position’, (3) or, in other words, on the ground that that act is not legally binding and therefore does not adversely affect them?
3. That is precisely the approach which the General Court of the European Union took in its order of 21 December 2022, Swissgrid v Commission (T‑127/21, not published, ‘the order under appeal’, EU:T:2022:868), which is challenged by the appellant, Swissgrid AG, in the present appeal. By that order, the General Court dismissed as inadmissible the appellant’s action for annulment of the decision allegedly contained in a letter signed by a director of the Commission’s Directorate-General for Energy (‘DG Energy’) (‘the letter at issue’). In that letter, the director had refused to authorise, in application of Article 1(7) of Regulation 2017/2195, the participation of Switzerland, including of the appellant, in the European platforms for the exchange of standard products for balancing energy, in particular the Trans European Replacement Reserves Exchange platform (‘the TERRE platform’).
4. As I shall argue in this Opinion, to assimilate the absence of a mandatory duty to the absence of a challengeable act seems to me to be equivalent to a denial of justice. That is all the more so because, in the present case, the letter at issue responds to a request for authorisation from the appellant, following the adoption of favourable opinions both by the transmission system operators (‘the TSOs’) participating in the TERRE platform and by the Agency for the Cooperation of Energy Regulators (‘ACER’). Neither the existence of an unfettered discretion on the part of the Commission nor the absence of an individual right to obtain certain conduct on the Commission’s part can as such exclude its acts from a review of their legality by the Courts of the European Union under Article 263 TFEU. On the contrary, those courts must be in a position to review whether, in adopting the position expressed in the letter at issue, the Commission remained within the bounds of the broad discretion conferred on it by the legislation at issue and was therefore entitled to exercise it as set out in that letter.
II. Legal context: Regulation 2017/2195
5. Article 1 of Regulation 2017/2195, entitled ‘Subject matter and scope’, provides, in particular:
‘1. This Regulation lays down a detailed guideline on electricity balancing including the establishment of common principles for the procurement and the settlement of frequency containment reserves, frequency restoration reserves and replacement reserves and a common methodology for the activation of frequency restoration reserves and replacement reserves.
2. This Regulation shall apply to transmission system operators (“TSOs”), distribution system operators (“DSOs”) including closed distribution systems, regulatory authorities, the Agency for the Cooperation of Energy Regulators …, the European Network of Transmission System Operators for Electricity (“ENTSO-E”), third parties to whom responsibilities have been delegated or assigned and other market participants.
…
6. The European platforms for the exchange of standard products for balancing energy may be opened to TSOs operating in Switzerland on the condition that its national law implements the main provisions of Union electricity market legislation and that there is an intergovernmental agreement on electricity cooperation between the Union and Switzerland, or if the exclusion of Switzerland may lead to unscheduled physical power flows via Switzerland endangering the system security of the region.
7. Subject to the conditions of paragraph 6, the participation of Switzerland in the European platforms for the exchange of standard products for balancing energy shall be decided by the Commission based on an opinion given by the Agency [for the Cooperation of Energy Regulators] and all TSOs in accordance with the procedures set out in paragraph 3 of Article 4. The rights and responsibilities of Swiss TSOs shall be consistent with the rights and responsibilities of TSOs operating in the Union, allowing for a smooth functioning of balancing market at Union level and a level-playing field for all stakeholders.
…’
III. Background to the dispute
6. The background to the dispute, as set out in paragraphs 2 to 10 of the order under appeal, may be summarised as follows.
7. The appellant is a limited liability company governed by Swiss law, which is the sole ‘TSO’ in Switzerland. It participates in the European Network of Transmission System Operators for Electricity (‘ENTSO-E’).
8. A number of TSOs, including the appellant, conceived the TERRE platform, in which the appellant already participated, (4) admittedly, without having received the Commission’s authorisation to do so.
9. On 7 September 2017, all the TSOs, meeting within ENTSO-E, gave an opinion in favour of Switzerland’s participation in the European balancing platforms, pursuant to Article 1(7) of Regulation 2017/2195, on the ground that the second condition set out in Article 1(6) of that regulation was satisfied.
10. On 10 April 2018, ACER also issued an opinion on Switzerland’s participation in the European balancing platforms, pursuant to Article 1(7) of Regulation 2017/2195. In that opinion, ACER stated that it agreed, in general, with the TSOs’ assessment as to the effectiveness of Switzerland’s full participation in those platforms. (5) In addition, it highlighted that it was important for Switzerland to implement all of Regulation 2017/2195 and other related provisions to ensure a level playing field between TSOs in the European Union and in Switzerland.
11. On 31 July 2020, the Deputy Director-General of the Commission’s DG Energy sent a letter to ENTSO-E, and also to the appellant, in which he expressed his surprise at the TSOs’ intention to include the appellant in the TERRE platform as a full member and emphasised that the coupling and balancing of markets were based on a comprehensive framework of legally enforceable rights and obligations to which Switzerland had not yet agreed. On that basis, the Swiss operators and TSOs were not, in principle, allowed to participate in that platform. In addition, he pointed out that the Commission had not granted any exception to Switzerland under Article 1(7) of Regulation 2017/2195.
12. On 29 September 2020, the appellant replied to the Commission, claiming that its full participation in European balancing platforms was necessary for reasons of security of the electricity system. It maintained, in essence, that its consideration in the EU capacity calculation process and its inclusion in the operational security analysis were insufficient. It also referred to the grounds set out in ENTSO-E’s opinion of 7 September 2017 and ACER’s opinion of 10 April 2018.
13. On 5 November 2020, ENTSO-E replied to the Commission. In that reply, while stating that the decision as to Switzerland’s participation in European balancing platforms was a matter for the Commission, pursuant to Article 1(7) of Regulation 2017/2195, the TSOs pointed out that they had, like ACER, delivered an opinion in favour of such participation.
14. On 8 December 2020, the appellant sent a letter to the Commission in which it stated that the TSOs and ACER had issued an opinion in favour of its participation in the TERRE platform and asked it to authorise that participation pursuant to Article 1(7) of Regulation 2017/2195.
15. In the letter at issue of 17 December 2020, addressed to ENTSO-E in reply to its letter of 5 November 2020, the director of the Commission’s DG Energy, first, highlighted that the appellant’s participation in the TERRE platform project did not comply with the applicable EU law, namely Article 1(6) and (7) of Regulation 2017/2195. Second, she stated that ACER’s opinion underlined the importance for Switzerland to implement all of Regulation 2017/2195 and other related provisions. Third, the director found that certain measures adequately addressed the risks posed by unscheduled physical power flows and, therefore, that Switzerland’s participation in the European balancing platforms was not necessary. In that regard, she maintained that the basis of operational security lay in capacity (re)calculation, on the one hand, and in regional operational security coordination, on the other, which already included Switzerland. Fourth, the director concluded that the Commission did not have any ground for adopting a decision authorising Switzerland to participate in European balancing platforms, including the TERRE platform. Fifth, she requested the TSOs to exclude the appellant from the TERRE platform by 1 March 2021 at the latest. The appellant was sent a copy of that letter by email.
16. In a resolution of 4 October 2023, the European Parliament emphasises, in particular, that in the electricity sector grid stability and security of supply and transit depend on close cooperation between the European Union and Switzerland, and expressed its concern that excluding Switzerland’s energy industry poses systemic risks for the synchronous grid of continental Europe. According to the Parliament, pending the conclusion of a framework agreement between the European Union and Switzerland, technical solutions at the level of TSOs and the inclusion of Switzerland in EU capacity calculations are necessary in order to reduce the greatest risks to regional grid stability and security of energy supply. (6)
IV. The procedure before the General Court and the order under appeal
17. By a document lodged at the Registry of the General Court on 26 February 2021, the appellant brought an action under Article 263 TFEU for annulment of the decision allegedly contained in the letter at issue.
18. By a separate document, lodged at the Registry of the General Court on 19 May 2021, the Commission raised a plea of inadmissibility, claiming that the letter at issue was not a challengeable act, within the meaning of Article 263 TFEU, in so far as it did not produce binding legal effects, as an informal exchange between representatives of the TSOs and DG Energy at the level of its services. In addition, the appellant had not shown that it had standing to act, for the purposes of the fourth paragraph of Article 263 TFEU, as the letter at issue was not of direct concern to it.
19. By the order under appeal, the General Court dismissed the appellant’s action as inadmissible, since the letter at issue was not an act capable of being the subject of an action for annulment under Article 263 TFEU.
20. In that regard, the General Court considers that the legal context of which the letter at issue forms part prevents it from being classified as ‘an act intended to produce binding legal effects vis-à-vis the [appellant]’ within the meaning of the case-law. (7) According to the General Court, Article 1(7) of Regulation 2017/2195 does not confer a right on the appellant to request and obtain from the Commission authorisation for Switzerland and, therefore, for the TSOs established there to participate in the European balancing platforms, in particular in the TERRE platform. The General Court maintains that it follows from the wording of that provision that the Commission is still entitled to refuse that participation, even if the conditions of Article 1(6) of that regulation, which justify such authorisation, were to be satisfied. In essence, the General Court observes that while compliance with the two conditions laid down in Article 1(6) of that regulation enables the Commission to adopt a position on whether such participation should be authorised, that provision does not require it to do so. In addition, any other interpretation would render the second sentence of Article 1(7) of that regulation ineffective. (8)
21. The General Court concludes that the adoption of a decision authorising Switzerland and, therefore, the TSOs established there to participate in the European balancing platforms depends solely on the choice made by the Commission, which has unfettered discretion in that regard. According to the General Court, the appellant, as a Swiss TSO, thus has no individual right to request and obtain from the Commission a decision authorising Switzerland and, therefore, the TSOs established there to participate in the European balancing platforms. Thus, ‘the … letter [at issue] cannot … constitute a decision capable of producing legal effects vis-à-vis the [appellant], such as to change its legal position …, since it in no way infringes an individual right which may circumscribe the Commission’s decision-making power, which is, in the present case, discretionary’. (9)
V. The procedure before the Court of Justice and the forms of order sought
22. By a document lodged at the Registry of the Court of Justice on 28 February 2023, the appellant brought the present appeal.
23. By its appeal, the appellant claims that the Court should:
– set aside the order under appeal;
– declare the action for annulment admissible;
– refer the case back to the General Court for judgment on the merits of the action; and
– reserve the decision as to the costs of the proceedings on appeal.
24. The Commission contends that the Court should:
– dismiss the appeal; and
– order the appellant to pay the costs.
25. The parties presented oral argument and answered the questions put by the Court at the hearing on 8 May 2024.
VI. Assessment
A. Preliminary observations
26. By the first and seconds grounds of appeal, the appellant challenges the General Court’s finding that the letter at issue does not produce legal effects vis-à-vis the appellant, such as to change its legal position, on the ground that it in no way infringes an individual right which may circumscribe the Commission’s unfettered discretion under Article 1(7) of Regulation 2017/2195.
27. I propose to deal with those two grounds of appeal together.
28. In the first place, I shall consider whether the letter at issue satisfies the criteria of the concept of a ‘challengeable act’, taking into account, in particular, its substance and the intention of its author (section B).
29. In the second place, I shall examine the impact on the classification of that letter as a ‘challengeable act’ of a broad discretion or an unfettered discretion on the part of the Commission, on the basis of Article 1(7) of Regulation 2017/2195, relating to the grant of an authorisation and, conversely, of the possible absence of a mandatory duty in that regard or of an individual right of the appellant to obtain such authorisation (section C).
30. In the third place, in the interest of completeness, in the light of the second ground of appeal, I shall analyse the scope and limits of that broad or unfettered discretion in response to the appellant’s argument that, in this case, it had an individual right and that the Commission was under a corresponding obligation to grant it that authorisation. In that context, I shall also answer the third ground of appeal, claiming that the General Court did not state sufficient reasons for the order under appeal in that regard (section D).
B. Criteria established in the case-law governing the concept of ‘challengeable act’ and substance of the letter at issue
31. In order to determine whether the letter at issue constitutes a challengeable act, it is appropriate to make reference to the case-law which has recognised that any act, whatever its form, which is intended to have binding legal effects of such a kind as to affect the applicant’s interests, by bringing about a distinct change in his or her legal position, is capable of being the subject matter of a judicial action. In order to assess whether an act produces such effects and is therefore capable of being the subject matter of an action, it is necessary to take account of objective criteria and of the substance of that act. In that regard, it is appropriate, as the General Court recognises, (10) also to take account of the context in which it was adopted and the powers of its author, (11) and likewise of the intention of the author. (12)
32. By contrast, any act not producing binding legal effects, such as preparatory acts and implementing measures, mere recommendations and opinions and, in principle, internal instructions, falls outside the scope of the judicial review provided for in Article 263 TFEU. (13)
33. The fact that the letter at issue does not take the form of a formal decision of the Commission, but merely that of a letter signed by a director of DG Energy, therefore has no impact on its classification as a ‘challengeable act’. (14) If the position were otherwise, the Commission could avoid review by the Courts of the European Union by failing to adhere to the formal requirements that govern the adoption of the contested act, requirements which must be observed in the light of its actual substance, including that of the competence of the service that acted, the correct designation of the act as a ‘decision’ or the formal notification thereof to its addressee. (15)
34. As regards the substance of the letter at issue, in particular its content and its wording, including the intention of its author that emerges therefrom, the General Court observes that that letter, first, notes that the appellant’s participation in the TERRE platform is not possible without the Commission first authorising Switzerland to participate in that platform pursuant to Article 1(6) and (7) of Regulation 2017/2195; second, points out that the conditions for such participation do not appear to the Commission to be met at the material time; and, third, requests the TSOs to exclude the appellant from that platform by 1 March 2021 at the latest. (16)
35. That third consideration indicates per se that the Commission envisaged attributing legal consequences to the letter at issue that were capable of adversely affecting the appellant. However, the General Court does not take that into account in the remaining part of its analysis. Indeed, without further assessing the scope of the considerations set out in the letter at issue or the intention pursued by its author, the General Court limits itself to ruling on the ‘legal context’ of which that letter forms part, which, in its view, prevents it from being classified as an ‘act intended to produce binding legal effects vis-à-vis the [appellant]’. (17)
36. I consider that that approach is vitiated by an error of law, notably in that it disregards the fact that the content of the letter at issue clearly has an adverse effect on the appellant. First, the refusal to authorise the appellant, as a Swiss TSO and a member of ENTSO-E, to participate fully in the TERRE platform, like the EU TSOs, affects its interests even more intensely because it had already participated in that platform, even though it was not a full member and could not rely on an individual right for that purpose. (18) Second, in that letter, the Commission ruled that the appellant’s participation in the TERRE platform thus far was unlawful and requested the EU TSOs, using imperative language emphasised by bold text for that purpose, (19) to exclude the appellant by 1 March 2021 at the latest. In addition, it refers to the possibility of actions for damages for the required exclusion of the appellant from the TERRE platform. (20) The refusal to adopt an authorisation decision, together with the request to terminate the appellant’s participation in that platform, which was liable to give rise to actions for damages, is necessarily intended to produce legal effects affecting the appellant’s interest by bringing about a distinct change in its legal position. The appellant cannot therefore be deprived of the right, under Article 263 TFEU and Article 47 of the Charter of Fundamental Rights of the European Union (‘the Charter’), to challenge the merits of that refusal and that request before the Courts of the European Union.
37. However, the General Court did not even examine those aspects which are decisive for the assessment of the existence of a challengeable act, with the consequence that the reasoning set out in paragraphs 23 to 29 of the order under appeal is also vitiated by an error of law.
C. Unfettered discretion and absence of an individual right
38. In addition, I consider that the General Court was not entitled to refer to the existence of an unfettered discretion on the part of the Commission and therefore to the absence of an individual right to an authorisation to participate in the TERRE platform, and to infer therefrom that the letter at issue could neither produce binding legal effects vis-à-vis the appellant nor change its legal position.
39. It seems clear to me that, where the legislation at issue provides not for a mandatory duty but for a broad discretion or an unfettered discretion on the part of the administration, that, in principle, precludes outright the existence of an individual right to request certain conduct on the administration’s part, namely, in this instance, authorisation for Switzerland and the appellant to participate, in particular, in the TERRE platform. That consideration is without prejudice to the precise scope of any unfettered discretion conferred on the Commission pursuant to Article 1(7) of Regulation 2017/2195, which I shall assess in points 51 to 58 of this Opinion.
40. It follows that the reasoning set out in paragraphs 24 to 29 of the order under appeal merely recites a recurrent obvious legal principle concerning a situation in which an individual seeks to obtain a response from an authority with a broad or unfettered discretion, or to prompt it to initiate an action favourable to that individual. (21) On the other hand, it does not follow that the definitive adoption of a position by such an authority which refuses to use that discretion in the way desired by the individual is not amenable to review before the Courts of the European Union on the ground that, in the absence of an individual right to that effect, that adoption of a position would not adversely affect the individual concerned. Thus, in competition matters, even though a complainant, in particular a competitor with a legitimate interest, cannot compel the Commission to adopt a decision in the sense which he or she requests, that complainant nonetheless has a right to a diligent and impartial investigation of his or her complaint and to obtain a reasoned definitive answer from the Commission, an answer which is amenable to judicial review. (22)
41. Likewise, in taking that approach, the General Court disregards the procedural status of the appellant, as the sole Swiss TSO, in the context of the procedure initiated under Article 1(6) and (7) of Regulation 2017/2195. That procedure is specifically intended to obtain recognition of the participation of Switzerland and the Swiss TSOs in the European platforms for the exchange of standard products for balancing energy by means of a Commission decision based on an opinion given by ACER and by all TSOs of the European Union. Thus, in the present case, that procedure was initiated pursuant to the favourable opinions of ACER and the TSOs to include the appellant in the TERRE platform, followed by a request to that effect by the appellant, in application of the second condition in Article 1(6) of that regulation. (23)
42. In the light of that objective of the procedure pursuant to Article 1(6) and (7) of Regulation 2017/2195 and of that situation, the appellant could therefore rely, like a complainant in competition law, on the right to have the Commission deal with its case, in particular its request for authorisation, diligently and impartially and to have it duly state the reasons for the definitive response to that request, in order to enable it to challenge the merits of that response. (24) In the present case, compliance with those procedural requirements was all the more necessary in view of the broad, or even unfettered, discretion, which the Commission had for the purposes of granting that authorisation. (25) Yet the classification of the letter at issue as an ‘act not open to challenge’ would allow the Commission to avoid any judicial review in that respect. (26)
43. In the order under appeal, the General Court failed to have regard to those procedural requirements, with which the Commission nonetheless intended to comply by means of the letter at issue, which is also evidenced by the fact that it had sent the appellant a copy. In that letter, the Commission stated its definitive position both on the opinions of the TSOs and ACER and on that request, while terminating the procedure under Article 1(7) of Regulation 2017/2195.
44. It follows that the existence, as such, of an unfettered discretion in favour of the Commission, pursuant to Article 1(7) of Regulation 2017/2195, is not of such a kind as to deprive the letter at issue of the legally binding effects vis-à-vis the appellant, as set out in point 36 above. The fact, emphasised by the General Court, that that provision does not ‘require’ the Commission to authorise Switzerland to participate in the European balancing platforms where the conditions of Article 1(6) of Regulation 2017/2195 are met, (27) but reserves it a ‘choice’ for that purpose, (28) does not preclude the letter at issue from changing the appellant’s legal position. Nor can the General Court justify its approach by asserting that any other interpretation would render the second sentence of Article 1(7) of that regulation ineffective. (29) That is even less possible because the analysis of the scope and the consequences of the exercise of the Commission’s unfettered discretion forms part of the examination of the substance and not of the admissibility of the action. (30)
45. Consequently, the assertion in paragraph 23 of the order under appeal that the legal context of which the letter at issue forms part prevents it from being classified as ‘an act intended to produce binding legal effects vis-à-vis the [appellant]’ is vitiated by an error of law. The same applies to the conclusion set out in paragraph 29 of that order that, in essence, that letter cannot constitute a decision capable of producing legal effects vis-à-vis the appellant, such as to change its legal position, since it in no way infringes an individual right which may circumscribe the Commission’s discretionary decision-making power.
46. Also vitiated by an error of law is the consideration set out in paragraph 28 of the order under appeal, according to which Article 1(7) of Regulation 2017/2195 does not confer any right on the appellant to initiate the procedure provided for in that provision or to be associated with that procedure in any way whatsoever, in particular in respect of the exercise of the right to be heard. In accordance with settled case-law, the right to be heard applies to all proceedings which are liable to culminate in a measure adversely affecting a person, such as the refusal to authorise the appellant’s participation in the TERRE platform or its exclusion from that platform, and it must be observed even where the applicable legislation does not expressly provide for such a procedural requirement. (31) The appellant therefore enjoyed such a procedural guarantee and the right to judicial review of its observance by the Commission. (32) In any event, it is common ground that, in the present case, the procedure pursuant to that provision was already in progress when the appellant submitted its request and that two of the procedural criteria permitting the Commission to adopt a decision pursuant to that provision, namely the favourable opinions issued by the TSOs meeting in ENTSO-E and by ACER, were already satisfied, so that the appellant could not be deprived of its right to be heard in that context.
47. Furthermore, the distinct change of the appellant’s legal position brought about by that decision is sufficient for the appellant to be recognised as being directly concerned, for the purposes of the fourth paragraph of Article 263 TFEU, as interpreted in a consistent line of decisions. (33) In that regard, two cumulative criteria must be met, namely, first, the contested measure must directly affect the legal position of the individual and, second, it must leave no discretion to its addressees, who are entrusted with the task of implementing it. (34)
48. Contrary to the Commission’s contention, that is the case here. The letter at issue not only refuses to authorise the participation of Switzerland and the appellant in the TERRE platform, but also requires that the appellant be excluded from that platform by 1 March 2021 at the latest, (35) without leaving any broad discretion in that respect to the TSOs to which the letter is addressed. It follows that the considerations of the General Court, as set out, in the interest of completeness, in paragraph 30 of the order under appeal, also disregard the ‘direct concern’ criterion.
49. Consequently the first ground of appeal must be upheld and the order under appeal set aside.
50. Notwithstanding that the foregoing considerations are sufficient for the purpose of setting aside the order under appeal, I propose also to answer the second ground of appeal, in so far as it is intended to challenge the scope of the Commission’s unfettered discretion and to assert the existence of the appellant’s right to obtain an authorisation from the Commission to participate, in particular, in the TERRE platform. That answer, which is more concerned with the substance than with the admissibility of the action, might be of assistance for the purposes of the definitive settlement of the dispute in the event that the case is referred back to the General Court.
D. Scope of the unfettered discretion precluding the existence of an individual right to obtain an authorisation
51. By its second ground of appeal, the appellant claims, essentially, that the General Court erred in law in holding that Article 1(7) of Regulation 2017/2195 confers no individual right on it to request and obtain from the Commission the adoption of a decision authorising Switzerland and, therefore, the TSOs established there to participate in the European platforms for the exchange of standard products for balancing energy. (36) In essence, the appellant maintains that, since the procedural criterion requiring favourable opinions of the TSOs and ACER laid down in that provision was met and since, according to those opinions, the second condition provided for in Article 1(6) of that regulation was satisfied, the Commission was required to adopt an authorisation decision.
52. In that regard, it must be borne in mind that Article 1(6) of Regulation 2017/2195 provides only for the possibility (‘may’) of opening the European platforms for the exchange of standard products for balancing energy to TSOs operating in Switzerland. Those platforms may be opened on two alternative conditions, namely, first, when Swiss law implements the main relevant provisions of EU electricity market legislation and there is an intergovernmental agreement on electricity cooperation between the European Union and Switzerland and, second, if the exclusion of Switzerland may lead to unscheduled physical power flows via Switzerland endangering the system security of the region.
53. Under Article 1(7) of Regulation 2017/2195, the Commission has exclusive power to adopt a decision (‘shall be decided by the Commission’) authorising Switzerland and the TSOs operating there to participate in the European platforms for the exchange of standard products for balancing energy. Furthermore, the exercise of that decision-making power depends, first, on the two alternative substantive conditions provided for in paragraph 6 of that article, as set out in the preceding point, being satisfied and, second, on a procedural requirement, namely the existence of an opinion given by ACER and by all TSOs, without it being specified whether such an opinion must be positive or negative (‘based on an opinion’). (37)
54. Those considerations constitute a sufficient ground to reject the appellant’s argument that, when ACER and the TSOs of the European Union give a positive opinion on the question whether one of the conditions provided for in Article 1(6) of Regulation 2017/2195 is met, the Commission is required to adopt a decision authorising Switzerland and the TSOs operating there to participate in the European platforms for the exchange of standard products for balancing energy. The same applies to its argument that the use of the passive form (‘est décidée par la Commission’ or ‘shall be decided by the Commission’), in the first sentence of Article 1(7) of that regulation, requires that the Commission adopt such a decision. That applies a fortiori because other language versions use the active form in that regard. (38)
55. The General Court was therefore correct to conclude, in essence, in paragraph 26 of the order under appeal, that satisfaction of one of the two conditions provided for in Article 1(6) of Regulation 2017/2195 ‘merely enables the Commission to adopt a position on the question whether such participation should be authorised, but does not require it to authorise that participation’. If neither of those two conditions is satisfied, the Commission cannot adopt an authorisation decision. Conversely, where one of those conditions is satisfied, it is permitted to do so.
56. In that regard, the second sentence of Article 1(7) of Regulation 2017/2195, on which the General Court adjudicates in paragraph 27 of the order under appeal, is, however, irrelevant. That second sentence merely determines the legal consequences of an authorisation decision, where it is taken on the basis of the first sentence of that provision, which is not the case here, and therefore does not concern the preconditions of its adoption. Only after the participation of the Swiss TSOs has been authorised are their rights and responsibilities required to be ‘consistent with the rights and responsibilities of TSOs operating in the Union, allowing for a smooth functioning of balancing market at Union level and a level playing field for all stakeholders’. (39) That requirement is all the more necessary when the authorisation decision is based on the second of the conditions provided for in Article 1(6) of that regulation, a situation in which it is not guaranteed that Switzerland will apply, as provided for by the first of those conditions, the main provisions of the EU electricity market legislation. Conversely, in the absence of such authorisation and, therefore, of the participation of the Swiss TSOs, by definition, their rights and their obligations cannot be the same as those of the EU TSOs, or ‘[allow] for a smooth functioning of balancing market at Union level’. (40)
57. Lastly, the indeterminate concepts arising from the second condition based on Article 1(6) of Regulation 2017/2195, and its open wording, indicate that the Commission has a broad discretion with respect to the question whether that condition is satisfied. In fact, that condition requires a complex double counterfactual analysis on the Commission’s part in order to determine whether, first, the exclusion of Switzerland may lead to ‘unscheduled physical power flows via Switzerland’ and, second, whether such flows ‘[endanger] the system security of the region’. That consideration confirms that, having regard to its exclusive decision-making power under that provision, the Commission cannot be required to adopt an authorisation decision on the sole ground that ACER and the TSOs have given a positive opinion. That is even less the case when, as here, the positive opinion of ACER is based on the sole consideration that the participation of Switzerland would be an effective solution in order to reduce congestion and increase operational security. (41)
58. The General Court was therefore, admittedly, correct to consider that the Commission had a broad discretion, or even an unfettered discretion, under Article 1(6) and (7) of Regulation 2017/2195, which precluded the existence of an individual right for the appellant to obtain an authorisation decision. Likewise, that finding emerges sufficiently clearly and comprehensibly from paragraphs 24 to 29 of the order under appeal; the General Court cannot therefore be criticised for not having sufficiently stated the reasons on which its decision was based in that regard (third ground of appeal).
59. Consequently, the second ground of appeal cannot succeed. The fact nonetheless remains that, having regard to what I set out in points 31 to 49 above, that finding of the General Court was not capable of substantiating its conclusion that the letter at issue did not entail binding legal effects vis-à-vis the appellant and that that letter was therefore an act not open to challenge.
VII. Conclusion
60. I therefore propose that the Court should uphold the first ground of appeal, set aside the order under appeal, refer the case back to the General Court in accordance with Article 61 of the Statute of the Court of Justice of the European Union and reserve the decision as to costs.