Bulgarian Constitutional Court repeals renewable energy tariff fee

Written by on July 31, 2014 in Business - Comments Off on Bulgarian Constitutional Court repeals renewable energy tariff fee

Bulgaria’s Constitutional Court said on July 31 that it has declared unconstitutional the provisions in the 2014 Budget Act that imposed a 20 per cent fee on the feed-in tariff paid to solar and wind power electricity producers.

The court said that the ruling was passed with 10 out of 12 judges voting in favour, but gave no details. The full text of the ruling will be published “later”, the court said.

The proposal to create such a fee was tabled in December 2013 as an amendment to the 2014 Budget Act before the second reading vote and was passed by Parliament despite objections from President Rossen Plevneliev, who described the measure as yet another example of lack of transparency in the National Assembly.

In January, Plevneliev lodged a formal challenge in the Constitutional Court, arguing that the new fee breached the principles of free enterprise (by imposing the fee selectively on solar wind and power producers, rather than all renewable energy producers) and rule of law (by failing to observe the guidelines of the statute on lawmaking). Additionally, the challenge argued that fees can only be imposed in exchange for a service rendered by the state – which was not the case in this situation.

Although the proposal had been billed by the media as a 20 per cent tax on the revenue of renewable energy producers, the country’s Economy and Energy Ministry pointed out on December 2 2013 that this was not in fact so.

Instead, solar and wind power producers would be asked to pay back 20 per cent of their preferential feed-in tariff as a fee, meaning that any electricity produced for own consumption, sold on the liberalised market or exported would not be subject to the fee, the ministry said.

The solar and wind power industry groups estimated that the amendment would raise – or save, depending how one looks at it – about 170 million leva for the Budget, but put many of the smaller renewable energy producers on the verge of defaulting on their bank loans.

(Photo: Patrick Moore/sxc.hu)

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