Owners of early generation Conto Energia I photovoltaic (PV) plants are currently receiving letters from the Gestore dei Servizi Energetici (GSE) announcing that it will adjust the Feed-in Tariff (FiT) downwards and claim reimbursement of, or set-off with, the excess payments it made in past years. An example of one of these letters is attached here.

Background

The Ministerial Decree of 28 July 2005 (the original version of the Conto Energia I) provided for an annual adjustment of the FiT to account for inflation. The Ministerial Decree of 6 February 2006 removed this adjustment for inflation with retrospective effect. This even applied to PV plants that had already qualified for the FiT under the original version of the Conto Energia I.

At first instance, in 2008, the Administrative Court of Milan and the Highest Administrative Court (Consiglio di Stato) ruled the Ministerial Decree of 6 February 2006 null and void, stating that it violated not only the general principle of legal acts not being retroactive (Article 11 of the preliminary provisions of Civil Code), but also the general principles of certainty of laws and legitimate expectation of the citizens (Regional Administrative Court of Milan, Sez. IV, 10 November 2006 n. 2125, as confirmed by Cons. Stato, Sez. VI, 4 April 2008 no. 1435). Based on these rulings, the GSE continued to publish the inflation-adjusted FiT rates for early generation Conto Energia I plants year by year until 2012.

In a parallel proceeding, however, the Consiglio di Stato decided not to follow its own 2008 decision and submitted the question to the Plenary Chamber. In May 2012, the Chamber ruled the opposite of the Consiglio di Stato’s 2008 decision and confirmed the legitimacy of the retrospective abolition of the inflation adjustment relating to early generation Conto Energia I plants. The Consiglio di Stato argued that the Ministerial Decree of 6 February 2006 did not actually modify a previous legal provision but only interpreted it in a different, and acceptable, manner (Cons. Stato, A.P., 4 May 2012, no. 9).

It took until 26 March 2013 for the GSE to react to the Plenary Chamber’s reversal of the Consiglio di Stato’s decision. On that date, it released the news bulletin, in which it stated it would no longer adjust the Conto Energia I FiT rates in line with inflation. The GSE did, however, continue to pay the increased rates that had already been generated by the inflation adjustments.

Current Situation

The GSE has now sent out the letters referred to above, informing early generation Conto Energia I plant owners that the GSE will i) readjust the FiT to its original amount, prior to any adjustment for inflation, and ii) claim reimbursement of, or set-off with, all excess payments made until now. The GSE also invites recipients of these letters to submit comments and observations within 10 days.

There are a number of questions that can be legitimately raised with respect to the GSE’s latest move:

  • Could PV plant owners have legitimately relied on the inflation adjustment after the 2008 decision, at least until the second decision of the Consiglio di Stato in 2012 – meaning it might be illegal for the GSE to claim back the excess amounts paid until 2012?
  • Could PV plant owners have also legitimately relied on the fact that the GSE would not claim back the excess amounts, after it only declared in 2013 that it would stop any further inflation adjustment and did not mention the prospect of PV plant owners having to reimburse the GSE?
  • PV plant owners have paid taxes on the excess amounts that should now be reimbursed in full. How will these taxes be reimbursed to them?

In our opinion, PV plant owners who have received these letters from the GSE should respond to the GSE and should also consider whether or not to file an appeal before the Regional Administrative Court.