ACER – Supreme Court holds that Parliament acted in accordance with the Constitution

The Norwegian Supreme Court in a plenary decision holds that Parliament acted in accordance with the Constitution when it in 2018 consented to the implementation of the rules of the EU's Third Energy Package into the EEA Agreement. The organization Nei til EU (No to the EU) argued that the decision was more than a “little intrusive” transfer of authority and should have been made with a three-quarters majority in Parliament, and thus that Parliament had acted unconstitutionally when the package was approved with simple majority.

One purpose of the Third Energy Package is to facilitate the trade of electricity and natural gas across borders. The establishment of the EU Agency for Cooperation of Energy Regulations (ACER) is part of the package. When the Third Energy Package was implemented into the EEA Agreement, the EFTA Surveillance Authority (ESA) was provided with similar authority with respect to the EFTA countries (including Norway) as ACER’s authority in the EU, one distinction being that ESA may only direct relevant decisions to the national regulatory authorities.

The central question for the Supreme Court has been whether the correct procedure was followed when the Norwegian Parliament dealt with the matter, considering whether and to what extent statutory powers were transferred from Norwegian authorities to ESA.

The Supreme Court states that ACER/ESA cannot decide whether to build new interconnectors or prohibit restrictions on electricity exports. Nor can ACER/ESA determine electricity prices. No to the EU agrees with this. However, the organization has argued that decisions made by ACER/ESA can indirectly affect electricity prices. The Supreme Court believes that such an effect can only be marginal in context of what follows from the fact that the interconnectors exist and are part of the European electricity market of which Norway is already a part. Electricity prices are a function of several factors, such as transmission capacity, weather conditions, and the price of other types of energy.

The conclusion is that even though authority was transferred in an important area of society – the energy sector – international organizations did not gain the authority to make decisions of great social significance in Norway. The Supreme Court unanimously concludes that the transfer of authority is less than a little intrusive and that the Norwegian Parliament did not violate the Constitution in 2018.

The Supreme Court further clarified two key questions, which are relevant for implementation of future EU acts. Firstly, that the assessment should focus on the specific transfer of authority in the relevant act, and not be influenced by previous transfers of authority in the same area. Secondly, the Supreme Court emphasised that the Parliament’s view plays a significant role in cases where there is reasonable doubt about whether the transfer of authority is “little intrusive”. If the courts find that it is beyond reasonable doubt that the transfer of authority is more than a little intrusive, the Parliament’s view shall not be given weight. The court’s decision has important implications for future cases involving the transfer of authority, as it clarifies the framework for constitutional control under the Norwegian Constitution.

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