Italy: Administrative Court Refers Feed-in Tariff Reductions to the Constitutional Court



In Depth

On June 23, the Regional Administrative Court of Latium (TAR Lazio) finally handed down its decision to refer the question of the constitutional legitimacy of Article 26, paragraph 3 of D.L 91/2014 (the spalma-incentivi) to the Italian Constitutional Court.
As we reported in our OTS from 12 August 2014, the spalma-incentivi required owners of photovoltaic (PV) plants with a nominal power exceeding 200 kW to choose one of the following changes to the originally awarded FiT:

  • A reduction of between 6 to8 per cent on the originally applicable feed-in tariff (FiT) rates.
  • A tariff reduction of between 17 per cent and 25 per cent against an extension of the payment period by four years.
  • An even higher reduction in a first period, followed by a corresponding increase in subsequent years.

TAR Lazio has now held that each of these three options directly and immediately harms the legal and economic position of PV plant owners, and expressed its doubts that these measures are compatible with the principles of legitimate reliance as provided for under Articles 3 and 41 of the Italian Constitution. It has therefore referred to the Constitutional Court the question of the constitutional legitimacy of the spalma-incentivi.

TAR Lazio has simultaneously rejected the procedural objections raised by the Gestore dei Servizi Energetici and the Ministry of Economic Development. In particular, TAR Lazio confirmed the exclusive jurisdiction of the administrative courts and rejected the argument that the claims refer to a private contract and should have been brought in front of the civil judge. TAR Lazio agreed with the argument made by the appellants that Article 26 of D.L. 91/2014 is self-executory (legge-provvedimento) and therefore allows private parties to challenge a legal provision directly.

The referral to the Constitutional Court suspends TAR Lazio’s decision on the appeals that are the subject of the referral. It will also cause the suspension of all other ordinary and extraordinary appeals pending before TAR Lazio and the Consiglio di Stato in relation to the spalma-incentivi, either by postponement of, or failure to schedule, the relevant hearings, or by express decision.

The Constitutional Court takes one year, on average, to hand down its decision, although significant deviations from this average have occurred in the past. Once the Constitutional Court has made its ruling, TAR Lazio and the Consiglio di Stato will take up the suspended appeals and rule in accordance with the Constitutional Court’s decision.