Оvergas Mrezhi and Balgarska gazova asotsiatsia (Common rules for the internal market in natural gas - Natural gas storage obligations - Judgment) [2020] EUECJ C-5/19 (30 April 2020)

Judgment This request for a preliminary ruling concerns the interpretation of Articles 36 and 38 of the Charter of Fundamental Rights of the European Union (‘the Charter’) and of Article 3 of Directive 2009/73/EC of the European Parliament and of the Council of 13 July 2009 concerning common rules for the internal market in natural gas and repealing Directive 2003/55/EC (OJ 2009 L 211, p. 94). The request has been made in proceedings between ‘Оvergas Mrezhi’ AD, a public limited company incorporated under Bulgarian law, and the ‘Balgarska gazova asotsiatsia’, a non-profit making organisation, on the one hand, and the Komisia za energiyno i vodno regulirane (Energy and Water Regulatory Commission, Bulgaria) (‘the Regulatory Commission’), on the other, concerning the legality of regulations adopted by the latter according to which the entire financial burden associated with the public service obligations imposed on the energy companies is to be borne by customers, who may be private individuals. Legal context European Union law The Charter Article 36 of the Charter, under the heading ‘Access to services of general economic interest’, provides: ‘The Union recognises and respects access to services of general economic interest as provided for in national laws and practices, in accordance with the Treaties, in order to promote the social and territorial cohesion of the Union.’ Under Article 38 of the Charter, under the heading ‘Consumer Protection’: ‘Union policies shall ensure a high level of consumer protection.’ Directive 2009/73 Recitals 22, 44 and 47 to 49 of Directive 2009/73 state: ‘(22) The security of energy supply is an essential element of public security and is therefore inherently connected to the efficient functioning of the internal market in gas and the integration of the isolated gas markets of Member States. … … (44) Respect for the public service requirements is a fundamental requirement of this Directive, and it is important that common minimum standards, respected by all Member States, are specified in this Directive, which take into account the objectives of common protection, security of supply, environmental protection and equivalent levels of competition in all Member States. It is important that the public service requirements can be interpreted on a national basis, taking into account national circumstances and subject to the respect of [EU] law. … (47) The public service requirements and the common minimum standards that follow from them need to be further strengthened to make sure that all consumers, especially vulnerable ones, can benefit from competition and fair prices. The public service requirements should be defined at national level, taking into account national circumstances; [EU] law should, however, be respected by the Member States. The citizens of the Union and, where Member States deem it to be appropriate, small enterprises, should be able to enjoy public service obligations, in particular with regard to security of supply and reasonable tariffs. … [C]onsumers should have access to their consumption data and associated prices and services costs … (48) Consumer interests should be at the heart of this Directive and quality of service should be a central responsibility of natural gas undertakings. Existing rights of consumers need to be strengthened and guaranteed, and should include greater transparency. … Consumer rights should be enforced by Member States or, where a Member State has so provided, the regulatory authorities. (49) Clear and comprehensible information should be made available to consumers concerning their rights in relation to the energy sector. …’ Article 2 of that directive contains the following definitions: ‘For the purposes of this Directive, the following definitions apply: 1. “natural gas undertaking” means a natural or legal person carrying out at least one of the following functions: production, transmission, distribution, supply, purchase or storage of natural gas, including [liquefied natural gas (LNG)], which is responsible for the commercial, technical and/or maintenance tasks related to those functions, but shall not include final customers; … 5. “distribution” means the transport of natural gas through local or regional pipeline networks with a view to its delivery to customers, but not including supply; … 7. “supply” means the sale, including resale, of natural gas, including LNG, to customers; … 24. “customer” means a wholesale or final customer of natural gas or a natural gas undertaking which purchases natural gas; …’ Article 3 of that directive, entitled ‘Public service obligations and customer protection’, provides in paragraphs 1 to 3: ‘1. Member States shall ensure, on the basis of their institutional organisation and with due regard to the principle of subsidiarity, that, without prejudice to paragraph 2, natural gas undertakings are operated in accordance with the principles of this Directive with a view to achieving a competitive, secure and environmentally sustainable market in natural gas, and shall not discriminate between those undertakings as regards their rights or obligations. 2. Having full regard to the relevant provisions of the [FEU] Treaty, in particular Article [106] thereof, Member States may impose on undertakings operating in the gas sector, in the general economic interest, public service obligations which may relate to security, including security of supply, regularity, quality and price of supplies, and environmental protection, including energy efficiency, energy from renewable sources and climate protection. Such obligations shall be clearly defined, transparent, non-discriminatory, verifiable and shall guarantee equality of access for [EU natural gas undertakings] to national consumers. In relation to security of supply, energy efficiency [and] demand-side management …, Member States may introduce the implementation of long-term planning, taking into account the possibility of third parties seeking access to the system. 3. Member States shall take appropriate measures to protect final customers, and shall, in particular, ensure that there are adequate safeguards to protect vulnerable customers. In this context, each Member State shall define the concept of vulnerable customers which may refer to energy poverty and, inter alia, to the prohibition of disconnection of gas to such customers in critical times. Member States shall ensure that rights and obligations linked to vulnerable customers are applied. … They shall ensure high levels of consumer protection, particularly with respect to transparency regarding contractual terms and conditions, general information and dispute settlement mechanisms. …’ Chapter VIII of the directive, on the national regulatory authorities, contains Articles 39 and 41 thereof. Article 39(1) provides that ‘each Member State shall designate a single national regulatory authority at national level’. Under the heading ‘Duties and powers of the regulatory authority’, Article 41(1) and (16) provides: ‘1. The regulatory authority shall have the following duties: (a) fixing or approving, in accordance with transparent criteria, transmission or distribution tariffs or their methodologies; … 16. Decisions taken by regulatory authorities shall be fully reasoned and justified to allow for judicial review. The decisions shall be available to the public while preserving the confidentiality of commercially sensitive information.’ Regulation (EU) No 994/2010 Regulation (EU) No 994/2010 of the European Parliament and of the Council of 20 October 2010 concerning measures to safeguard security of gas supply and repealing Council Directive 2004/67/EC (OJ 2010 L 295, p. 1), was repealed by Regulation (EU) 2017/1938 of the European Parliament and of the Council of 25 October 2017 concerning measures to safeguard the security of gas supply and repealing Regulation (EU) No 994/2010 (OJ 2017 L 280, p. 1), for the most part, as of 1 November 2017. Article 4 of Regulation No 994/2010 was placed under the heading ‘Establishment of a Preventive Action Plan and an Emergency Plan’. Article 4(1)(b) provided that the competent authority of each Member State, after consulting the natural gas undertakings, the relevant organisations representing the interests of household and industrial gas customers and the national regulatory authority, where it is not the competent authority, was to establish, at national level, an emergency plan containing measures to eliminate or mitigate the impact of a gas supply disruption in accordance with Article 10 of that regulation. Article 10 set out, in essence, the criteria according to which the national emergency plans were required to be drawn up as well as their objectives, the matters to be covered and the procedure according to which they were to be adopted. Bulgarian law Law on Normative Legal Acts Article 26 of the Zakon za normativnite aktove (Law on Normative Legal Acts) of 3 April 1973 (DV No 27, of 3 April 1973), in the version in force at the material time in the main proceedings (‘the Law on Normative Legal Acts’), provides: ‘(1) A draft normative legal act shall observe the principles of necessity, justification, foreseeability, transparency, coherence, subsidiarity, proportionality and stability. (2) When preparing the draft normative legal act, public consultations with citizens and legal persons shall be held. (3) Before the draft normative legal act is presented for the purposes of being issued or adopted by the competent authority, it shall be published on that authority’s website, together with an explanatory memorandum … …’ Article 28 of that law provides: ‘(1) The draft normative legal act, together with its explanatory memorandum … shall be presented to be appraised and decided on by the competent authority. (2) The explanatory memorandum … shall include: … 5. an analysis of compatibility with EU law.’ Section 5 of the Transitional and Final Provisions of the Law on Normative Legal Acts provides: ‘Unless otherwise provided therein, this law shall apply to all normative legal acts adopted by the authorities laid down in the Constitution. Articles 2, 9 to 16, 34 to 46 and 51 of the law shall apply to other normative legal acts by analogy.’ Energy Law The Zakon za energetikata (Energy Law) of 9 December 2003 (DV No 107, of 9 December 2003), in the version in force at the material time in the main proceedings (‘the Energy Law’), provides, in Article 10(1), that the Regulatory Commission is to be responsible for activities relating to energy and the supply and treatment of water and, in Article 21(1)(8), that the Regulatory Commission is to regulate prices in those cases set out in that law. Article 30 of that law provides: ‘(1) The [Regulatory Commission] shall be responsible for regulating prices: … 14. for the access and storage of natural gas at a storage site; … (2) Energy and national gas prices and services supplied by energy companies shall not be regulated by the [Regulatory Commission] where it considers that there is competition such that, in respect of a particular activity in the energy sector, prices are determined according to free market conditions. …’ Article 31 of that law provides: ‘In exercising its powers to regulate prices, the [Regulatory Commission] shall be guided, further to the principles referred to in Articles 23 and 24, by the following principles: 1. prices must be non-discriminatory, based on objective criteria and determined transparently; 2. energy company tariffs must pass on those financial costs of the energy companies which are financially justified, including the cost: … (b) of maintaining reserves and the necessary regulatory capacity for the purposes of ensuring customers a reliable supply; … 3. in addition to the costs referred to in subparagraph 2, prices may also include irrecoverable costs connected with the transition to a competitive energy market and costs associated with the performance of the public service obligations relating to the security of supply, including the protection of sites which constitute strategic infrastructure of the energy sector. 4. prices must ensure an economically reasonable return on capital; 5. prices applicable to various customer groups must relate to the costs of supplying those customers with energy and natural gas; 6. prices shall not include any crossed subsidy: … …’ Article 35 of the Energy Law states: ‘(1) Energy companies may request that the costs associated with the public service obligations imposed on them be passed on, including the costs associated with security of supply, … … (3) The entities referred to in subparagraph 1 shall, at regular intervals, lodge a request with the [Regulatory Commission] that the corresponding costs be passed on. Evidence justifying and quantifying the amount of the costs shall be enclosed with the request. (4) The [Regulatory Commission] shall determine the amount to be passed on by each company and the total amount to be passed on for the relevant period. (5) The means of passing on the costs associated with the public service obligations shall be set out in methodology issued by the [Regulatory Commission] for the purposes of a transparent apportionment of those costs among all final customers, including electricity importers connected to the national grid, the transport network operator and the electric grid operators and/or those means shall otherwise be set out in legislation.’ Article 36(1) and (3) of that law provides: ‘(1) Regulated prices shall be set by the energy companies in accordance with the requirements of this Law and the ordinances referred to in subparagraph 3. The instructions given by the [Regulatory Commission] on setting prices shall be binding on the energy companies. … (3) The methods of price regulation, the rules on price setting, fixing or variation, the specific rules on the provision of information, price offers and tariff validation, … shall be laid down in ordinances adopted by the [Regulatory Commission] on electricity, thermal energy and natural gas.’ In accordance with Article 69 of that law: ‘Energy companies shall be obliged to carry out their activities in the public interest, in the interests of individual customers and in accordance with the requirements of this Law and other normative legal acts, by ensuring security of supply, including the protection of sites constituting strategic infrastructure in the energy sector, the continuous supply and quality of electricity, thermal energy and natural gas, …’ Article 70 of that law provides: ‘(1) The Minister for Energy may impose additional public service obligations on energy companies. (2) The additional obligations referred to in paragraph 1 shall be imposed in respect of: 1. The continuity of electricity, thermal energy and natural gas supply; … (3) The additional obligations referred to in paragraph 1 shall be imposed by a decree stating: 1. the person on whom the obligation is imposed; 2. the content of the obligation; 3. the timeframe and conditions for performance of the obligation; 4. any other conditions. (4) The additional costs borne by the energy companies under paragraph 3 shall be treated as costs referred to in Article 35.’ Ordinance No 2/2013 Under Article 36(3) of the Energy Law, Naredba No 2 za regulirane na tsenite na prirodniya gaz (Ordinance No 2 on Natural Gas Price Regulation) of 19 March 2013 (DV No 33, of 5 April 2013) was adopted, which, in the version in force at the material time in the main proceedings, was last amended and supplemented by an ordinance published in DV No 105 of 30 December 2016 (‘Ordinance No 2/2013’). Article 1(2) of Ordinance No 2/2013 provides that that ordinance lays down ‘the method for passing on the costs of energy companies associated with the public service obligations imposed on them under the Energy Law’. Article 11 of Ordinance No 2/2013 provides: ‘(1) The costs endorsed by the [Regulatory Commission], incurred by energy companies as a result of their public service obligations, shall be passed on in a non-discriminatory and transparent manner in the form of prices charged to all customers. (2) The total amount of costs accepted by the [Regulatory Committee] which are associated with public service obligations shall be included in the necessary annual income of the transportation company. (3) The costs referred to in subparagraph 2 shall be reimbursed by each consumer of natural gas in the form of a proportion of the supply price, according to their recorded consumption, and shall be identified as a billing line separate from the gas network supply price — a price which shall be fixed or calculated according to the method referred to in Article 2(3). (4) The means of passing on the costs incurred by the energy companies concerned as a result of the public service obligations which were imposed on them, and the mechanism by which those costs are refunded to the energy companies which bore them, shall be calculated according to the method adopted by the [Regulatory Commission].’ Article 11a of Ordinance No 2/2013 reads as follows: ‘(1) Where a public service obligation is imposed on more than one energy company, the costs associated with that obligation shall be reimbursed to the energy undertakings concerned in proportion to the share of the obligation imposed on them, as part of the price paid by their customers. (2) In the cases referred to in subparagraph 1, the costs endorsed by the [Regulatory Commission] shall be identified as a billing line separate from the price set by the energy company concerned and reimbursed to that energy company by its customers and/or by end natural gas suppliers with which it has concluded a supply contract, in proportion to their recorded consumption. (3) The separate billing line referred to in subparagraph 2 shall be calculated on the basis of a justified estimate of the costs associated with the public service obligation for the year in question and of the forecast quantities of natural gas required for that year. (4) Where the energy company has more than one billing period in the year referred to in subparagraph 3, the separate billing line referred to in subparagraph 2 shall be adjusted for each billing period on the basis of the difference between the estimated costs and the actual costs incurred during the previous billing period under that public service obligation.’ Bulgartransgaz’s pricing method Article 17 of the method for calculating natural gas access and transport costs for networks owned by ‘Bulgartransgaz’ EAD, in the version in force at the material time in the main proceedings (DV No 76 of 30 September 2016) (‘Bulgartransgaz’s pricing method’), states: ‘(1) The costs directly attributable to the relevant year of the regulatory period shall be determined annually and shall include the following: 1. the cost of performing public service obligations, including those connected with security of supply, and of performing obligations imposed on the operator in an emergency plan adopted by decree of the Minister for Energy pursuant to Regulation [No 994/2010]; …’ Article 25(3) of Bulgartransgaz’s pricing method provides that ‘the price of transport may include costs associated with the imposition of public service obligations’ and that ‘those costs shall be identified as a separate element of the price’. The dispute in the main proceedings and the questions referred for a preliminary ruling Bulgartransgaz is a combined system operator for the gas network and, as such, operates the national transmission system for the transport of natural gas in Bulgaria to the distribution systems and certain non-household customers. It also operates the underground gas storage facility in Chiren (Bulgaria), the principal aim of which is to ensure natural gas supplies and to offset seasonal consumption fluctuations. ‘Bulgargaz’ EAD is the State gas supplier in Bulgaria, which it supplies at prices regulated by the Regulatory Commission. In 2016, it supplied 98% of the market for the sale of natural gas in Bulgaria. Distribution companies transport and supply natural gas to end suppliers. In 2016, 24 companies had a licence in Bulgaria, the total number of customers of which was 87 274, comprising 80 705 households (92%) and 6 569 businesses (8%). Overgas, which is supplied by Bulgargaz, supplies 66% of all natural gas consumers in Bulgaria. It has challenged before the Varhoven administrativen sad (Supreme Administrative Court, Bulgaria), the referring court, the legality of Article 1(2), Article 11 and Article 11a of Ordinance No 2/2013, under which, in the second quarter of 2017, Bulgargaz applied an increase of 2.40 leva (BGN) (approximately EUR 1.22) to the price of natural gas per 1 000 m³, which led, for the months of April and May 2017, to an increase in billing in the amount of BGN 85 980 (approximately EUR 43 960), the billing line of which increased to BGN 2.42 (approximately EUR 1.23) per 1 000 m on 1 July 2017. The Balgarska gazova asotsiatsia has challenged before the same court the legality of those provisions on the ground that they infringe the rules of administrative procedure and the relevant substantive law and that they are not in the public interest, since they have led to a significant increase in the price of natural gas. The Regulatory Commission, which adopted the contested provisions, maintains, in the first place, that, when drafting its provisions, it is not required to comply with certain procedural requirements governing the adoption of normative legal acts. In the second place, it contends that Article 69 of the Energy Law provides that public service obligations may be imposed on energy companies in the natural gas sector and that it is empowered to lay down the types of billing elements and the types of the State supplier’s costs which must be reimbursed to the State supplier. In that regard, it states that, in order to overcome the threat to the security of supply of natural gas in Bulgaria, the emergency situation action plan approved by the Minister for Energy in accordance with Regulation No 994/2010 provides, first, that Bulgartransgaz is to store a certain quantity of natural gas at the Chiren facility, that reserve being intended to ensure continuity of supply and is reimbursed by Bulgartransgaz only in the event of a break in that supply. According to that commission, the plan provides, second, that companies in the natural gas sector, including Bulgargaz, are also required to keep at that facility, at the beginning of the winter period, certain quantities of natural gas in order to overcome seasonal shortages, those reserves being used during the winter season to offset fluctuating consumption. The Regulatory Commission states that that plan provides, in addition, that the costs associated with the first of those obligations are to be covered by access and natural gas networks transportation prices in accordance with Article 35 of the Energy Law, the conditions and means of setting those prices being governed by Bulgartransgaz’s pricing method. It adds that the costs associated with the second of those obligations are to be covered by means of the franchised services prices, also in accordance with Article 35 of the Energy Law, pursuant to which Ordinance No 2/2013 was adopted. The Prokuratura na Republika Bulgaria (Public Prosecutor’s Office of the Republic of Bulgaria) considers that consumers are not effectively protected under the Bulgarian legislation. It considers that the provisions of Ordinance No 2/2013 which have been challenged breach principles of administrative procedure, in particular the principle of proportionality, and allow energy companies to set prices which are not commensurate with the services provided. The referring court cites the judgments of 20 April 2010, Federutility and Others (C‑265/08, EU:C:2010:205); of 10 September 2015, Commission v Poland (C‑36/14, not published, EU:C:2015:570 ); and of 7 September 2016, ANODE (C‑121/15, EU:C:2016:637 ), and states that it is unsure as to the limits which EU law imposes on the ability of Member States to intervene in the setting of prices for the supply of natural gas. Although in its view it follows from those judgments that such intervention, in relation to the supply of final consumers, may be allowed under Directive 2009/73 provided that certain conditions are met, that case-law does not dispel the doubts it entertains. In particular, those judgments do not address the question of the price component consisting of the cost of the public service obligations imposed on the energy companies and Directive 2009/73 does not state who must bear that burden. In the light of Article 3(1) and (2) of Directive 2009/73, the referring court considers that the mechanism for identifying companies subject to public service obligations or obligations to bear the cost of such services should not exempt any undertaking in the natural gas sector, not even the State supplier or the combined system operator. In addition, that court asks whether the requirements of the principle of proportionality are satisfied where the economic burden of such obligations is borne, without distinction, by final customers who, for the most part, are not energy companies. In that regard, it adds that Bulgarian law does not place any temporal limit on the obligation of the State supplier to supply natural gas at regulated tariffs, nor does it place the obligation on final customers to bear the economic burden associated with the public service obligations imposed on the energy companies. The question also arises as to which costs associated with those public service obligations may be taken into account in calculating the regulated tariffs. The referring court adds that final customers cannot challenge the decisions of the Regulatory Commission determining, for each period, the quantities of gas to be retained at the Chiren facility on the ground that they lack a direct and existing legitimate interest, and that those customers also cannot challenge the cost of performing the storage obligation at issue as set by that commission. It therefore asks whether consumers’ rights are protected to the standard required by Directive 2009/73. Furthermore, the referring court harbours doubts regarding the exemption provided for in Section 5 of the transitional and final provisions of the Law on Normative Legal Acts, which covers the Regulatory Commission. In view of the requirement under Directive 2009/73 that public service obligations are to be clearly defined, transparent, non-discriminatory, verifiable and such as to guarantee equality of access for EU natural gas undertakings to national consumers, it considers it necessary for national regulations introducing such obligations to explain the reasons for their adoption in detail. In those circumstances, the Varhoven administrativen sad (Supreme Administrative Court) decided to stay the proceedings and to refer the following questions to the Court of Justice for a preliminary ruling: ‘(1) Is a national measure such as the one at issue in the main proceedings, provided for in Article 35 of the [Energy Law] and set out in more detail in Article 11 of [Ordinance No 2/2013], according to which the entire financial burden associated with the public service obligations imposed on the energy companies is to be borne by customers, permissible under Articles 36 and 38 of the [Charter] and under Article 3 of [Directive 2009/73], considering that: (a) the economic burden associated with the public service obligations does not affect all energy companies; (b) the costs of the public service obligations are borne mainly by final customers, who are unable to contest them, even though they obtain natural gas from end suppliers at freely determined prices; (c) there is no differentiation of the financial burden arising from the performance of the public service obligations which is borne by different types of customers; (d) there is no time limitation for the application of this measure; (e) the calculation of the value of the public service obligations is made on the basis of the costs accounting method according to a forecast model? (2) Is a national legal provision such as Section 5 of the Transitional and Final Provisions of the Law on Normative Legal Acts, which releases the [Regulatory Commission] from the obligations of Articles 26 to 28 of [that law] and in particular from the obligations that exist when preparing the draft of a sub-statutory normative legal act to observe the principles of necessity, justification, foreseeability, transparency, coherence, subsidiarity, proportionality and stability, to hold a public hearing with citizens and legal persons, to publish the draft in advance together with the reasoning and to set out reasoning, including with regard to compatibility with EU law, permissible under Article 3 of Directive 2009/73/EC of the European Parliament and of the Council of 13 July 2009 concerning common rules for the internal market in natural gas and repealing Directive 2003/55/EC, in consideration of recitals 44 and 47 to 49 thereof?’ Consideration of the questions referred The first question Admissibility In so far as the Regulatory Commission challenges the admissibility of the first question on the ground that, if regard were had to the actual facts and law, which that question does not reflect, the answer to it would be clear from the case-law, it should be noted, first, that questions on the interpretation of EU law referred by a national court in the factual and legislative context which that court is responsible for defining, and the accuracy of which is not a matter for the Court to determine, enjoy a presumption of relevance (judgment of 6 October 2015, Târşia , C‑69/14, EU:C:2015:662 , paragraph 12 and the case-law cited). In particular, it is not for the Court, in the context of the judicial cooperation established by Article 267 TFEU, to call into question or to verify the accuracy of the national court’s interpretation of national law, as such interpretation falls within the exclusive jurisdiction of that court. In addition, when hearing a reference for a preliminary ruling from a national court, the Court must base its reasoning on the interpretation of national law as described to it by that court (judgments of 11 September 2014, Essent Belgium , C‑204/12 to C‑208/12, EU:C:2014:2192 , paragraph 52 and the case-law cited, and of 6 October 2015, Târşia , C‑69/14, EU:C:2015:662 , paragraph 13 and the case-law cited). The Court may refuse to rule on a question referred by a national court for a preliminary ruling only where it is quite obvious that the interpretation of EU law that is sought bears no relation to the actual facts of the main action or its purpose, where the problem is hypothetical, or where the Court does not have before it the factual or legal material necessary to give a useful answer to the questions submitted to it (judgments of 11 September 2014, Essent Belgium , C‑204/12 to C‑208/12, EU:C:2014:2192 , paragraph 54 and the case-law cited, and of 6 October 2015, Târşia , C‑69/14, EU:C:2015:662 , paragraph 14 and the case-law cited). Second, and moreover, those circumstances in no way prevent a national court from referring a question for a preliminary ruling to this Court, the answer to which, in the submission of the defendants in the main proceedings, leaves no scope for reasonable doubt. Thus, even if that were the case, that question does not thereby become inadmissible (judgment of 1 December 2011, Painer , C‑145/10, EU:C:2011:798 , paragraphs 64 and 65 and the case-law cited). In the present case, the first question bears a clear relation to the purpose of the case in the main proceedings, since, by that question, the referring court wishes to ascertain whether the national provisions the legality of which have been challenged before it are compatible with the obligations which Article 3 of Directive 2009/73, read in the light of Articles 36 and 38 of the Charter, imposes on the Member States in the natural gas sector, and it does not appear that the problem which it raises is hypothetical. In addition, that court has, for that purpose, set out sufficient factual and legal material in order for the Court to give a useful answer to that question. Furthermore, even if the referring court’s exposition of the applicable national law is inaccurate, it does not follow that the question which it refers is inadmissible. It follows from the foregoing that the first question is admissible. Substance As a preliminary matter, it should be made clear that, by its first question, the referring court seeks, as regards Directive 2009/73, an interpretation of all of Article 3 thereof. However, the case in the main proceedings concerns, in essence, the conformity, as regards that directive, of national legislation providing that the costs incurred by the natural gas undertakings on the basis of public service obligations imposed on those companies are to be reimbursed by their customers. Therefore, it is only necessary to interpret Article 3(1) to (3) of Directive 2009/73 for the purposes of disposing of this case. The Court also observes that the grounds for the request for a preliminary ruling show that both the requirement to pass on the costs connected with the obligation to store natural gas imposed on Bulgartransgaz in order to ensure the security of natural gas supply in Bulgaria and the requirement that the costs of natural gas storage obligations imposed on natural gas undertakings must be passed on in order to ensure that natural gas is correctly supplied during the winter period are at issue in the main proceedings. According to the order for reference, the case in the main proceedings concerns not only the legality of Article 11 of Ordinance No 2/2013, but also that of Article 11a of that ordinance, which concerns public service obligations ‘imposed on more than one energy company’. However, since it is, in any event, also clear from that order for reference that the principles applicable to the calculation of those costs and to the detailed rules for passing them on are similar, both types of obligation lend themselves, for the purposes of the dispute in the main proceedings, to a single assessment. In those circumstances, the referring court’s first question must be construed as asking, in essence, whether Article 3(1) to (3) of Directive 2009/73, read in the light of Articles 36 and 38 of the Charter, must be interpreted as precluding legislation of a Member State which provides that the costs associated with the natural gas storage obligations imposed on natural gas undertakings in order to ensure the security and regularity of natural gas supply in that Member State are to be borne entirely by those undertakings’ customers, who may be private individuals. Under Article 3(1) of Directive 2009/73, Member States are to ensure, on the basis of their institutional organisation and with due regard to the principle of subsidiarity, that, without prejudice to Article 3(2) of that directive, natural gas undertakings are operated in accordance with the principles of the directive with a view to achieving a competitive, secure and environmentally sustainable market in electricity, and are not to discriminate between those undertakings as regards either rights or obligations. Article 3(2) of the directive provides that, having full regard to the relevant provisions of the FEU Treaty, in particular Article 106 thereof, Member States may impose on undertakings operating in the gas sector, in the general economic interest, public service obligations which may relate, inter alia, to security, including security and regularity of supply. That provision states that such obligations are to be clearly defined, transparent, non-discriminatory, verifiable and are to guarantee equality of access for EU natural gas undertakings to national consumers. In addition, in relation to, in particular, security of supply and demand-side management, Member States may introduce the implementation of long-term planning, taking into account the possibility of third parties seeking access to the system. In addition, Article 3(3) provides that Member States are, inter alia, to take appropriate measures to protect final customers and, in particular, ensure that there are adequate safeguards to protect vulnerable customers and ensure high levels of consumer protection. The case in the main proceedings does not question whether the storage obligations imposed on the natural gas undertakings are ‘public service obligations’ within the meaning of Article 3(2) of Directive 2009/73, or whether those storage obligations satisfy the conditions set out in that article. The case in the main proceedings concerns national legislation under which the costs borne by the natural gas undertakings as a result of those obligations must be passed on in the prices which those undertakings charge their customers. The case therefore concerns the issue of whether national legislation, which consists, in essence, of State intervention in respect of the price of natural gas, whether in terms of the price of its transportation or supply, is in conformity with that directive. It should therefore be noted that, although State intervention in the fixing of the price of natural gas constitutes an obstacle to the achievement of a competitive natural gas market, that intervention may nonetheless be accepted within the framework of Directive 2009/73 if three conditions are satisfied. First, the intervention must pursue an objective of general economic interest, second, it must comply with the principle of proportionality and, third, the public service obligations that it lay downs must be clearly defined, transparent, non-discriminatory and verifiable, and guarantee EU gas undertakings equal access to consumers (see, to that effect, judgment of 7 September 2016, ANODE , C‑121/15, EU:C:2016:637 , paragraph 36 and the case-law cited). In the first place, as regards the condition relating to the pursuit of a general economic interest, it is true that Directive 2009/73 does not define that condition. However, the reference in Article 3(2) of that directive both to that condition and to Article 106 TFEU, which concerns undertakings entrusted with the management of a service of general economic interest, means that that condition should be interpreted in the light of Article 106 TFEU (judgment of 7 September 2016, ANODE , C‑121/15, EU:C:2016:637 , paragraph 38 and the case-law cited). The interpretation of the condition relating to the pursuit of a general economic interest must furthermore take account of Article 14 TFEU, of Protocol (No 26) on services of general interest, annexed to the EU Treaty, as amended by the Treaty of Lisbon, and to the FEU Treaty, which expressly recognises the essential role and the wide discretion of the authorities of the Member States in providing, commissioning and organising services of general economic interest, and of the Charter, in particular Article 36 of the Charter on access to services of general economic interest (see, to that effect, judgment of 7 September 2016, ANODE , C‑121/15, EU:C:2016:637 , paragraphs 40 and 41). With respect specifically to the natural gas sector, the second sentence of recital 47 of Directive 2009/73 states that public service obligations should be defined at national level, taking into account national circumstances, while EU law must, however, be respected by the Member States. In that context, Article 106(2) TFEU aims to reconcile the Member States’ interest in using certain undertakings as an instrument of economic or social policy with the EU’s interest in ensuring compliance with the rules on competition and preserving the unity of the internal market (judgment of 7 September 2016, ANODE , C‑121/15, EU:C:2016:637 , paragraph 43 and the case-law cited). The Member States are thus entitled, while complying with EU law, to define the scope and organisation of their services of general economic interest and they may in particular take account of objectives pertaining to their national policy (judgment of 7 September 2016, ANODE , C‑121/15, EU:C:2016:637 , paragraph 44 and the case-law cited). In that regard, the Court has stated that, in the assessment which the Member States must carry out, in accordance with Directive 2009/73, to determine whether, in the general economic interest, public service obligations should be imposed on undertakings operating in the gas sector, it is for the Member States to reconcile the objective of liberalisation with the other objectives pursued by the directive (judgment of 7 September 2016, ANODE , C‑121/15, EU:C:2016:637 , paragraph 45 and the case-law cited). Thus, EU law, in particular Article 3(2) of Directive 2009/73, read in the light of Articles 14 TFEU and 106 TFEU, allows the Member States to assess whether, in the general economic interest, public service obligations relating to the price of natural gas should be imposed on undertakings operating in the gas sector, in particular in order to ensure the security of, and consistency in, supply, provided that the other conditions laid down by that directive are satisfied (see, to that effect, judgment of 7 September 2016, ANODE , C‑121/15, EU:C:2016:637 , paragraph 52). In the present case, according to the order for reference the requirement to pass on the costs at issue in the main proceedings relates to the costs associated with the storage obligations imposed on the natural gas undertakings in order to ensure the security and regularity of natural gas supply in Bulgaria, two objectives which are expressly referred to in Article 3(2) of Directive 2009/73 as objectives of general economic interest which justify the Member States in imposing public service obligations within the meaning of that provision. National legislation which provides that the costs for natural gas undertakings associated with such public service obligations must be passed on by those undertakings through the prices which they charge their customers also furthers those objectives of general economic interest since, being intended to ensure that those objectives are cost-neutral for those undertakings, it contributes to the effective performance of those obligations by those undertakings. It is nevertheless for the referring court to ascertain whether that is the case, by taking account of the fact that the Court has previously held that it is not inconceivable that national legislation introducing an obligation to supply natural gas at a determined price may be regarded as capable of ensuring that such objectives are attained (see, to that effect, judgment of 7 September 2016, ANODE , C‑121/15, EU:C:2016:637 , paragraph 58). In the second place, as regards the second condition of compliance with the principle of proportionality, it follows from the very wording of Article 106 TFEU that the public service obligations which Article 3(2) of Directive 2009/73 allows to be imposed on undertakings must comply with that principle and, therefore, that those obligations may, from 1 July 2007, compromise the freedom to determine the price of supply of natural gas only in so far as is necessary to achieve the objective of general economic interest which they pursue (see, to that effect, judgment of 7 September 2016, ANODE , C‑121/15, EU:C:2016:637 , paragraph 53 and the case-law cited). While it is for the referring court to assess in the main proceedings whether that requirement of proportionality is satisfied, it is, however, for the Court to provide the referring court, on the basis of the information available, with the necessary indications for that purpose from the point of view of EU law (see, by analogy, judgment of 7 September 2016, ANODE , C‑121/15, EU:C:2016:637 , paragraph 54 and the case-law cited). Thus, compliance with the principle of proportionality means, first, that the measure in question must be appropriate for securing the objective of general economic interest which it pursues (judgment of 7 September 2016, ANODE , C‑121/15, EU:C:2016:637 , paragraph 55 and the case-law cited). In that regard, nothing in the file before the Court would appear to indicate that that condition is not satisfied in the present case. As has previously been found in paragraph 65 above, the fact that the costs incurred by those natural gas undertakings due to the storage obligations which are imposed on them in order to ensure the security and regularity of the supply of natural gas are reimbursed to those undertakings aims to ensure that those obligations are cost-neutral for those undertakings. Such a requirement to pass on costs would thus appear to be appropriate for securing the objectives pursued, which it is, however, for the referring court to ascertain. Second, in order to comply with the principle of proportionality, State intervention in prices must be limited to what is strictly necessary for achieving the objective pursued, which entails a periodical review of the necessity of the measure (see, to that effect, judgment of 7 September 2016, ANODE , C‑121/15, EU:C:2016:637 , paragraph 60 and the case-law cited). In the present case, it is for the referring court, in the light of the precise evidence before it, to determine whether the national legislation satisfies that condition. In that context, it is for the referring court to ascertain whether, and to what extent, the administration is bound, under the applicable national law, to conduct a periodic review, at regular and sufficiently close intervals, of the necessity and means of its intervention in the light of developments in the gas sector, it being specifically for that court, in the course of that assessment, to take into account the provisions of Regulation No 994/2010, applicable at the time of the facts in the main proceedings, now replaced by Regulation 2017/1938, which governs, inter alia, the establishment, by each Member State, of a preventive action plan and an emergency plan in order to ensure the security and regularity of the supply of gas at national level. Third, the method of intervention used must not go beyond what is necessary to achieve the objective of general economic interest being pursued (judgment of 7 September 2016, ANODE , C‑121/15, EU:C:2016:637 , paragraph 64 and the case-law cited). In that regard, the referring court has not provided any evidence from which it could be ascertained whether the calculation of the costs passed on to customers satisfies that condition, other than stating, in the formulation of its first question, that ‘the calculation of the value of the public service obligations is made on the basis of the costs accounting method according to a forecast model’. In that context, it will be for the referring court to ascertain whether the method of calculating the costs, as laid down by the national legislation, does not lead to passing on costs above those incurred by the undertakings concerned in respect of the storage obligations imposed on them and whether the method used by the Regulatory Commission to calculate the costs associated with those obligations, the determination of which falls within the powers of the national authorities, takes account of objective and non-discriminatory criteria. Fourth, compliance with the principle of proportionality must also be assessed with regard to the scope ratione personae of the measure in question and, more particularly, to those who benefit from that scope. In that regard, the Court has previously stated that it must be examined to what extent the State intervention at issue benefits individuals and undertakings respectively as final consumers of gas (judgment of 7 September 2016, ANODE , C‑121/15, EU:C:2016:637 , paragraphs 67 and 68 and the case-law cited). Compliance with that principle does not, however, preclude the public service obligations which Member States may adopt in the context of Article 3(2) of Directive 2009/73 from applying to final consumers of gas as a whole. In that case, however, it would be necessary to take account, in assessing the proportionality of the national measure in question, of the fact that the situation of undertakings is, in principle, different from that of domestic consumers, the objectives pursued and the interests present being not necessarily the same and also of objective differences between the undertakings themselves, according to their size (see, to that effect, judgment of 20 April 2010, Federutility and Others , C‑265/08, EU:C:2010:205, paragraphs 40 to 42). In the present case, the requirement to pass on the costs at issue in the main proceedings cannot, prima facie and as such, be regarded as a measure ‘benefiting’ customers or consumers who must ultimately pay for them. However, that requirement to pass on costs arises directly from the natural gas storage obligations imposed on the natural gas undertakings. Such obligations, in so far as they are intended to ensure the security and regularity of supply, benefit consumers of natural gas as a whole. In addition, there does not appear to be any reason to preclude, in principle, the requirement to pass on the costs at issue in the main proceedings from applying to all natural gas undertakings on which the storage obligations have been imposed and all the customers of those undertakings, including individuals. However, since the referring court has indicated, in its first question, that no distinction is drawn between the various types of customer in terms of the financial burden which they bear, it should be made clear that, under Articles 11 and 11a of Ordinance No 2/2013, as set out by that court, the costs at issue in the main proceedings are reimbursed through the prices paid by customers ‘according to their recorded consumption’. That would tend to suggest that, despite an apparently uniform scope ratione personae , the requirement to pass on the costs at issue in the main proceedings could, from that point of view, satisfy the requirements of the principle of proportionality. It will, however, be for the referring court to ascertain whether that is the case; it would not run counter to that principle if the economic burden of the storage obligations, borne by the various types of final customer, were to affect all customers in the same way or if, whilst not affecting all customers in the same way, the distinction drawn between the types of customer were objectively justified, for example, due to the effect of their consumption on the costs of storage. In the third place, as regards the condition that the public service obligations at issue must be clearly defined, transparent, non-discriminatory, verifiable and guarantee equality of access for EU natural gas undertakings to national consumers, it should be noted that, as regards the non-discriminatory nature of those obligations, Article 3(2) of Directive 2009/73 allows public service obligations to be imposed generally ‘on undertakings operating in the gas sector’, not on certain undertakings specifically. Moreover, Article 3(1) of the directive provides that the Member States ‘shall not discriminate’ between natural gas undertakings ‘as regards their rights or obligations’. In this framework, the system of designating undertakings responsible for public service obligations may not exclude a priori any of the undertakings operating in the gas distribution sector (judgment of 7 September 2016, ANODE , C‑121/15, EU:C:2016:637 , paragraph 71 and the case-law cited). Thus, any difference of treatment which may arise must be objectively justified. In the present case, the referring court confined itself to stating, in that regard, that, first, the economic burden associated with the storage obligations at issue in the main proceedings does not affect ‘all energy companies’ and, second, final customers cannot contest the costs of the public service obligations for which they ultimately pay. Since the storage obligations at issue in the main proceedings can, by their nature, concern only undertakings currently operating in the gas sector, the fact that the costs of those obligations are not borne by all energy companies cannot prove that the requirement to pass on those costs is discriminatory. It is nevertheless for the referring court to ascertain whether the financial burden of those obligations affects all natural gas undertakings and, if not, whether the resulting difference in treatment is justified objectively, and whether or not the rules for passing on that burden in respect of the undertakings in question are discriminatory (see, by analogy, judgment of 20 April 2010, Federutility and Others , C‑265/08, EU:C:2010:205, paragraphs 45 and 46). As far as concerns the fact that final customers are unable to contest the costs of the storage obligations for which they ultimately pay, it cannot be concluded from that fact alone that those costs are not verifiable, since it is not clear from the order for reference whether the undertakings on which those obligations have been imposed are themselves unable to challenge the decision of the Regulatory Commission which sets the costs covered by that requirement to pass on costs. Without such further information in the order for reference, it must be for the referring court to ascertain, in the light of all the evidence before it, whether the requirement at issue in the main proceedings satisfies the condition set out in paragraph 80 above. Furthermore, since the referring court also harbours doubts as to the permissibility of the requirement to pass on the costs at issue in the main proceedings as regards Article 3(3) of Directive 2009/73, on the basis that the national legislation at issue in the main proceedings has the effect of passing on the costs of the storage obligations to final consumers of natural gas, who are in part private individuals, irrespective of whether they are vulnerable consumers, it should be noted that Article 3(3) of that directive provides, inter alia, that Member States are to take appropriate measures to protect final customers and ensure that there are adequate safeguards to protect vulnerable customers and ensure high levels of consumer protection, the latter of which is also referred to in Article 38 of the Charter. However, in the present case, there is nothing to indicate that a requirement to pass on the costs associated with public service obligations imposed on the natural gas undertakings, such as the undertaking at issue in the main proceedings, which were to satisfy the conditions set out in Article 3(2) of Directive 2009/73 and the requirements of the principle of proportionality, would not be suitable for ensuring the high levels of consumer protection, including of vulnerable consumers, which that directive requires. In that regard, the Court considers, in particular, that such a requirement to pass on costs affects only part of the price of the supply of natural gas, that that part appears to depend on the actual consumption of natural gas and that it has been provided that the part of the price concerned must be indicated in a separate billing line. In addition, such legislation does not appear to preclude the Member State in question from being able, where appropriate, to intervene in determining the price of the supply of natural gas for the benefit of vulnerable consumers. In the light of all of the foregoing considerations, the answer to the first question referred is that Article 3(1) to (3) of Directive 2009/73, read in the light of Articles 36 and 38 of the Charter, must be interpreted as not precluding legislation of a Member State which provides that the costs associated with the natural gas storage obligations imposed on natural gas undertakings in order to ensure the security and regularity of natural gas supply in that Member State are to be borne entirely by those undertakings’ customers, who may be private individuals, provided that that legislation pursues an objective of general economic interest, that it complies with the requirements of the principle of proportionality and that the public service obligations which it lays down are clearly defined, transparent, non-discriminatory, verifiable and guarantee equality of access for EU gas undertakings to national consumers. The second question By its second question, the referring court asks, in essence, whether Directive 2009/73 must be interpreted as precluding legislation of a Member State which releases the regulatory authority of that Member State, within the meaning of that directive, from the obligation to comply with certain provisions of national legislation governing the procedure for the adoption of normative legal acts where it adopts an act imposing a public service obligation within the meaning of Article 3(2) of the directive. As a preliminary matter, the Court observes, first, that the Bulgarian Government has challenged the jurisdiction of the Court to rule on that question on the ground that it does not concern EU law, but national law, since the national legislation at issue in the main proceedings does not constitute a transposition of EU law. It is nevertheless the case that, by its question, the referring court wishes to know, in essence, whether Directive 2009/73 allows a regulatory authority, within the meaning of that directive, in exercising regulatory powers under that directive, to be subject to a procedure for the adoption of normative legal acts which differs from the procedure otherwise provided for in the national legislation. Since the second question thus clearly concerns EU law, the Court has jurisdiction to answer it. Second, the Regulatory Commission contests the admissibility of that question, since it claims that Directive 2009/73 does not contain any requirements regarding the procedure under which national sub-statutory normative legal acts must be adopted. However, the issue of whether the second question concerns a matter unconnected with EU law on the ground that that directive does not require the legislation of the Member States to provide for similar rules to those from which the Regulatory Commission is exempted by the national legislation at issue in the main proceedings relates to the substance of the question referred, and not its admissibility (see, by analogy, judgment of 21 October 2010, Padawan , C‑467/08, EU:C:2010:620 , paragraph 27 and the case-law cited). The question is therefore admissible. As far as substantive law is concerned, it should be noted that, according to Article 3(2) of Directive 2009/73, Member States may impose on undertakings operating in the gas sector, in the general economic interest, public service obligations which are clearly defined, transparent, non-discriminatory, verifiable and guarantee equality of access for EU natural gas undertakings to national consumers. By requiring that such obligations be ‘clearly defined’, ‘transparent’ and ‘verifiable’, that provision means that the legal acts by which such obligations are imposed must be justified, published and amenable to judicial review. Furthermore, Article 41(16) of Directive 2009/73, under the heading ‘Duties and powers of the regulatory authority’, provides that decisions taken by regulatory authorities are to be fully reasoned and justified to allow for judicial review and that their decisions are to be available to the public while preserving the confidentiality of commercially sensitive information. However, Directive 2009/73 does not provide for any detailed procedural means beyond those specifications to which those authorities should conform in adopting legal acts that impose public service obligations within the meaning of Article 3(2) of that directive. In those circumstances, Member States are free to release their regulatory authority, in adopting such a legal act, from the obligation to comply with certain provisions of their national legislation governing the procedure for the adoption of normative legal acts, provided that their legislation otherwise ensures that, when adopting such a legal act, that authority must satisfy the conditions provided for in Directive 2009/73. In the present case, it is for the referring court to ascertain whether, notwithstanding being released from compliance with Section 5 of the Transitional and Final Provisions of the Law on Normative Legal Acts, the Regulatory Commission is nevertheless required, as it claims, to satisfy those conditions. In the light of all of the foregoing considerations, the answer to the second question referred is that Directive 2009/73 must be interpreted as not precluding legislation of a Member State which releases the regulatory authority of that Member State, within the meaning of that directive, from the obligation to comply with certain provisions of national legislation governing the procedure for the adoption of normative legal acts where it adopts an act imposing a public service obligation within the meaning of Article 3(2) of the directive, provided that the otherwise applicable national legislation ensures that that legal act complies with the substantive requirements of that provision and is fully reasoned, published while preserving the confidentiality of commercially sensitive information and amenable to judicial review. Costs Since these proceedings are, for the parties to the main proceedings, a step in the action pending before the national court, the decision on costs is a matter for that court. Costs incurred in submitting observations to the Court, other than the costs of those parties, are not recoverable. On those grounds, the Court (Tenth Chamber) hereby rules: 1. Article 3(1) to (3) of Directive 2009/73/EC of the European Parliament and of the Council of 13 July 2009 concerning common rules for the internal market in natural gas and repealing Directive 2003/55/EC, read in the light of Articles 36 and 38 of the Charter of Fundamental Rights of the European Union , must be interpreted as not precluding legislation of a Member State which provides that the costs associated with the natural gas storage obligations imposed on natural gas undertakings in order to ensure the security and regularity of natural gas supply in that Member State are to be borne entirely by those undertakings’ customers, who may be private individuals, provided that that legislation pursues an objective of general economic interest, that it complies with the requirements of the principle of proportionality and that the public service obligations which it lays down are clearly defined, transparent, non-discriminatory, verifiable and guarantee equality of access for EU gas undertakings to national consumers. 2. Directive 2009/73 must be interpreted as not precluding legislation of a Member State which releases the regulatory authority of that Member State, within the meaning of that directive, from the obligation to comply with certain provisions of national legislation governing the procedure for the adoption of normative legal acts where it adopts an act imposing a public service obligation within the meaning of Article 3(2) of the directive, provided that the otherwise applicable national legislation ensures that that legal act complies with the substantive requirements of that provision and is fully reasoned, published while preserving the confidentiality of commercially sensitive information and amenable to judicial review. [Signatures] * Language of the case: Bulgarian. © European Union The source of this judgment is the Europa web site. The information on this site is subject to a information found here: Important legal notice . 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