January 27, 2023

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The Council of State rejects the Corriere.it antitrust law

They risk increasing gas and electricity bills. In fact, the Council of State accepted the appeal of Iren’s plurality – represented by lawyers Eugenio Bruti Liberati, Fausto Caronna and Roberto Bonsignore (Clary Gottlieb) – against antitrust and in particular against Antitrust provision which prevented increases in electricity and gas prices also for contracts that expired and had to be renewed. The rule in question, which was introduced with the Aiuti bis decree in August and is valid until April 30, 2023, suspends the effectiveness of both contractual clauses that allow sales companies to change the supply price and notices already sent to customers. The Competition and Market Authority decided to apply it also to expired contracts and then also targeted other energy companies.

Erin asked

Erin’s request, in particular, to order a suspension of the effectiveness of the disputed provision in the part in which it requires Erin to suspend the change in economic terms contractually terminated, arguing that the mere immediate scheduling of the hearing on the merits – the suspension of the proceedings imposed, in the part in which they have suspended Applying price updates after the expiry of the contract term, which would require Irene to notify its clients individually – would not avoid serious and irreparable damages that implementation of the applicable actions would cause each appellant today.

the appeal

The appellant argued – according to the judges’ ruling – that without updating the prices to the customer, due to coercion (imposed by the disputed ruling) to provide the customer with energy according to the fixed price of the contracted contract, under the current price. Purchase costs, arising damages to an extraordinary entity, amounting to 264 million euros, are related to purchases and related costs of gas and electricity that have already been made and are subject to stipulations with third parties in hedging contracts to make these variable costs fixed, which threatens the economic and financial balance of the company.

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decree

The State Council deemed it necessary to provide for the suspension of the contested judgment only in the part in which contracts or fixed-term contracts which provide for a predetermined expiration of economic conditions on a date before April 30, 2023 in question in this case are invested is not a practice ius variandi But the contractual renewal is freely agreed upon by both parties. The Council of State accepted the provisional request and partially stayed the judgment challenged by the appellant – which contained a circular order against him to stay any change in the supply contracts – within the meanings and limits partially motivated by it or where it referred an order, with legal certainty when it came to unilateral changes, even in the case of updating prices To renew an expired contract.

regular value

The intervention of the State Council is of systemic importance because, after the action against Irene, The antitrust authority has adopted similar rules for all major companies in the sector, as it is industry-wide practice to send price updates after contractual expiration. Given the staggering increase in the costs of purchasing gas and electricity that occurred during 2022, the ban by the authority would have entailed, not only for Erin, but for the entire energy sector, an obligation to supply below cost, causing huge economic losses.

Utilitalia: the first step in the right direction

Today’s decision of the Council of State – commented Utilitalia – is a first step in the right direction to clarify the issue of expected energy price increases at the expiration of contracts, which the antitrust has stopped in recent days. The Federation of Water, Environment and Energy Companies highlights how such a strategic issue can be resolved through a clear political decision rather than through sentences. Moreover, the decision is in line with the European Regulation on High Energy Prices (EU Regulation No. 2022/1854) which states that if a country interferes with energy prices, and regulates them effectively, it must compensate companies. To be sure, the economic cost of the national frontier of retail prices cannot fall exclusively on companies in the energy sector, which have already been grappling for months with raw material costs at all-time highs.

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