Action brought on 14 October 2010 - Endesa and Endesa Generación v Commission

(Case T-490/10)

Language of the case: Spanish

Parties

Applicants: Endesa, SA (Madrid, Spain), Endesa Generación, SA (Seville, Spain), (represented by: M. Merola, lawyer)

Defendant: European Commission

Form of order sought

Declare the application for annulment admissible;

Declare the application to be founded and annul the Decision in its entirety;

order the Commission to pay all the costs incurred by the applicants.

Pleas in law and main arguments

This action is brought against the same decision as that challenged in Case T-484/10 Gas Natural Fenosa SDG v Commission and Case T-486/10 Iberdrola v Commission.

The applicants put forward three pleas in support of their action:

1.    The first plea in law alleges that the Commission made a manifest error when it concluded that the notified measure was covered by Directive 2003/54/EC. ¹ In relation to that plea, the applicants claim that:

-    The Commission made a manifest error in having interpreted Article 11(4) of Directive 2003/54/EC as not requiring the national authorities to put forward, and prove the existence of, reasons concerning security of supply in order to be able to adopt measures which are incompatible with the rules pursuing harmonisation in the directive. Such an interpretation is in breach of the obligation to give a restrictive interpretation to a provision establishing an exception.

-    The Commission's interpretation of Article 11(4) of Directive 2003/54/EC would mean that Member States could make indefinite use of a rule which may, by virtue of Article 114 of the Treaty, be of only transitory application. The Commission's interpretation is therefore incompatible with the legal basis of Directive 2003/54/EC.

-    The Commission made a manifest error in having calculated the 15% threshold laid down in Directive 2003/54/EC in such a way that it does not have the practical effect sought by the European Union legislature.

-    The Commission made a manifest error given that there are no problems of security of supply in Spain such as to justify the adoption of the notified measure.

-    The notified measure does not comply with the conditions laid down in Article 3(2) of Directive 2003/54/EC, which provides that public service obligations must be clearly defined, transparent, non discriminatory, verifiable and must guarantee equality of access for EU electricity companies to national consumers.

2.    The second plea alleges that the Commission made a manifest error in holding that Article 106(2) of the Treaty is applicable to the notified measure. On the basis of that, the applicants maintain that:

-    The Commission made a manifest error in taking the view that the provision made by Article 11(4) of Directive 2003/54/EC renders it unnecessary to consider whether in the present case the mandatory conditions for establishing a public service obligation is met.

-    The Commission made a manifest error in failing to assess the proportionality of the notified measure correctly and in having limited that analysis to determining that the compensation was not excessive.

-    In its application of Article 106(2) of the Treaty, the Commission failed to assess the infringement which the notified measure entailed for the right to property laid down in the Charter of Fundamental Rights of the European Union.

3.    In relation to their third plea, concerning infringement of certain rules relating to procedural matters, the applicants claim that:

-    The Commission infringed Article 108 of the Treaty and Article 4(4) of Regulation (EC) No 659/1999² in failing to initiate a formal investigation procedure, despite the fact that there was objective and coherent evidence showing that the assessment of the compatibility of the notified measure entailed serious difficulties.

-    In using the pre-notification phase in order to avoid opening a formal investigation procedure, the Commission misused its powers.

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¹ - Directive 2003/54/EC of the European Parliament and of the Council of 26 June 2003 concerning common rules for the internal market in electricity and repealing Directive 96/92/EC (OJ 2003 L 176, p. 37).

² - Council Regulation (EC) No 659/1999 of 22 March 1999 laying down detailed rules for the application of Article 93 of the EC Treaty (OJ 1999 L 83, p. 1).