“Mandatory pricing of heat production was applied indefinitely, regardless of whether such measures are still justified and necessary to achieve the goal of ensuring fair competition following a certain period of time,” KT declares.
According to the court, when regulating economic activity, the state cannot create unfavorable, unequal conditions and restrict the initiative of companies.
According to the CT, the indefinite application of mandatory pricing by heating companies created conditions for limiting their rights and legitimate interests more than is necessary to ensure the public interest, as well as disregarding the constitutional principle of proportionality.
The Supreme Administrative Court of Lithuania applied to the Supreme Administrative Court following suspending the administrative case between the company “Biovatas” and the State Energy Regulatory Council (VERT) last March.
Back in October 2021, Biovatas asked the Vilnius District Administrative Court (now the Vilnius Chamber of the Regional Administrative Court) to cancel the decision of the energy market regulator, which recognized the company as a regulated independent heat producer.
“Biovatas” stated that in October 2019, funds from the company “Fono” were financed by own and borrowed funds at the market price – 3.872 million. EUR (including VAT) purchased separate facilities and real estate of the Alytus district boiler house more than five years following their former owner used EU support to modernize them. Biovatas itself stated that it did not use EU support.
Nevertheless, according to VERT, the support clause remains, so the new owner should be subject to mandatory pricing for heat production.
According to “Biovato”, the value of the purchase-sale agreement was close to 4 million. EUR for the value of the boiler house modernization project. The company claimed that following five years, the equipment it purchased was depreciated, at that time the value of other buildings and other assets was only 129 thousand. euros.
The LVAT ruling states that in October 2010, the Lithuanian Business Support Agency allocated 1.929 million to “Fon” for the modernization and adaptation of the boiler room to burn biofuel. EUR (without VAT) support. The project was completed at the end of 2013, and since 2014, VERT “Fonui” has started applying mandatory heat production pricing.
In October 2021, the Vilnius District Administrative Court rejected Biovato’s complaint, which is why the company applied to LVAT.
The decision to assess whether the provision of the Heat Economy Law, that independent heat producers, when they have received EU support, is subject to mandatory heat production pricing for an indefinite period, complies with the main law of the country, was adopted by the CT last April.
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2024-04-18 18:15:34
