June 17, 2021

The Supreme Court annuls the retroactivity of the hydraulic canon and forces the State to return 500 million to the electricity

The Supreme Court has annulled the retroactivity of the 2013 and 2014 hydraulic canon that the Government of Mariano Rajoy imposed on electricity companies in 2015 for the use or exploitation of continental waters for the production of electricity.

As El País has advanced, the Court has ruled throughout last April on various contentious-administrative appeals filed by Acciona or Endesa, partially estimating the claims against Royal Decree 198/2015, of March 23, for the which develops article 112 bis of the consolidated text of the Water Law and regulates the fee for the use of continental waters for the production of electrical energy in intercommunity demarcations.

Thus, the Supreme Court declares “the nullity of the second transitory provision, as well as of the first additional provision, second paragraph, of the aforementioned Royal Decree 198/2015, as both are contrary to the legal system, rejecting otherwise the various claims made in this resource “, reports Europa Press.

The Court considers that there is “a frontal collision of the regulations with the law” and this cannot “provide for retroactive application, here at the maximum degree, as it could, depending on the cases and the type of retroactivity, provide the formal law, and at the same time Margin also that the law, by subjecting the terms and conditions of the concession fee to the results of the concession authorization, is recognizing in an obvious and necessary way the impossibility of receiving the fee until the condition iuris is fulfilled -or fails- “.

In this sense, it points out that “the formal obligations tied to such periods 2013 and 2014 are also void, by derivation or consequence, as they refer to the same periods, without it being necessary, for that reason, to undertake the particular and individualized analysis of the probable vices or infractions that, autonomously, they could suffer “.

The canon remains

The judgments suppose to estimate part of the demand of the companies, although the Supreme Court did not withdraw the fee, which represented an increase in the fee for the use or exploitation of continental waters for the production of electrical energy of 22%, which was later raised to 25.5%.

This canon was added to the taxes created in the framework of the electricity reform addressed by the PP, which also included the 7% tax on generation, and whose collection was intended to address the electricity system deficit.

According to ‘El País’, this ruling by the Supreme Court means that the Government will have to return around 500 million euros to the electricity companies -mainly to Iberdrola and Endesa- for the improper collection of that fee.

According to calculations by Banco Sabadell analysts, according to the companies’ hydraulic generation, Iberdrola would receive about 250 million euros -with 13,111 GWh hydraulic production- and Endesa about 150 million euros -7,681 GWh hydraulic production-.

The return of the payment for the canon will not affect the electricity bill of the consumers, since it will correspond to the Public Treasury, on which the confederations of the hydrographic basins depend.

In 2019, the Court of Justice of the European Union (CJEU), in response to preliminary questions raised by the Supreme Court, already endorsed the canon imposed on different electricity companies for the use of water in the hydrographic basins for the production of energy and the taxes that are applied in Spain to the production and storage of fuel and nuclear waste, after concluding that they do not violate Community regulations.


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