It will soon be five years since the now-famous August 2015, when, due to significant power shortages in the national electricity system, it was decided to introduce the so-called 20th power level, i.e. the highest possible restrictions on electricity consumption. As a result of consumers’ failure to comply with the introduced restrictions, there were (and still are) massive proceedings by the ERO President to impose fines. However, some entrepreneurs can avoid the penalty due to the expiry of the 5-year limitation period.
Sporne przedawnienie
The statute of limitations for monetary penalties under the Energy Law has caused quite a bit of controversy in recent years. Suffice it to say that until a few years ago, the law did not contain any provisions relating to the statute of limitations, and thus it was permissible for the President of the Energy Regulatory Office to impose fines regardless of the period that had elapsed since the unlawful behaviour. Then, for a few months, there was a provision ordering the application of the Tax Ordinance in the alternative (5-year statute of limitations), but eventually the starting point was returned and punishment of entrepreneurs was again unlimited in time.
In 2017, the situation was sorted out by a major amendment to the Code of Administrative Procedure, which introduced a general legal framework for all administrative fines. Pursuant to Article 189g §1 of the Code of Administrative Procedure, an administrative fine may not be imposed if five years have elapsed from the date of the violation of the law or the occurrence of the consequences of the violation of the law. The provision entered into force on 1 June 2017 and applies to all proceedings for the imposition of a fine that have been and will be initiated after that date.
Entrepreneurs who are currently in the process of administrative proceedings for the imposition of a fine for non-compliance with the restrictions introduced in August 2015, or who expect that such proceedings may be initiated against them, should keep a close eye on the limitation period. This is because, in order to 'fit' within the limitation period, the ERO must issue an administrative decision before the expiry of the five-year period, not merely initiate proceedings.
Shield 1.0 froze, Shield 3.0. unfroze
If it were not for COVID-19, all the unpunished fines for the 20th power stage would have become time-barred in August 2020. (the specific date depends on the days on which the customer in question failed to comply with the restrictions imposed).
There are currently still many cases pending at the ERO that have not been concluded with an administrative decision. Some of them have been initiated relatively recently, with our experience showing that the average time for such proceedings at the ERO is about 1.5 years, and up to 2 years for more complex cases.
However, it should be borne in mind that the so-called “Anti-Crisis Shield 1.0” introduced a top-down suspension of all administrative time limits (including limitation periods). The provision in this respect entered into force on 31 March 2020, and therefore the limitation periods were frozen from that date.
In contrast, the administrative time limits were unfrozen in the provisions of Shield 3.0, according to which the time limits continue to run 7 days after the entry into force of this law (16 May 2020 + 7 days). This means that a trader wishing to invoke the statute of limitations for a criminal offence (as well as the ERO when imposing a penalty) will have to calculate in detail when the statute of limitations has actually expired. The period of suspension of time limits due to COVID-19 will have to be added to the August deadline.
Niejasne przepisy i zmienna linia orzecznicza SOKIK-u
Even if the entrepreneur does not manage to avoid the penalty due to the statute of limitations, one should not fold one’s arms. The decision of the President of the ERO can always be appealed to the Court of Competition and Consumer Protection (SOKIK). The chance of winning is not small at all, and all because of the defectively written provisions of the Energy Law imposing a penalty for non-compliance with the restrictions. Without going into the details, the point is that the provision imposing the fine explicitly refers only to regulations under which the Council of Ministers may introduce restrictions on power consumption in the territory of the Republic of Poland. However, the legislator forgot that such restrictions can also be introduced by the Polish Power Grid. This was the case on 10 and 11 August 2015, the first two days of the restrictions. It was only from 12 August 2015 that the Council of Ministers regulation came into force. However, it was mainly in the first two days that a huge number of entrepreneurs did not comply with the restrictions introduced. Firstly, because the highest power levels were in force at the time, making it mandatory in principle to shut down production altogether, and secondly, everyone was taken by surprise by the situation, and it took some time for the relevant procedures to be implemented in industrial plants and companies.
As far as the SACK is concerned, until 2-3 years ago, the court's line of rulings was one hundred percent uniform - the SACK dismissed the entrepreneur's appeal and upheld the fines imposed by the ERO President. At present, the situation is quite different - there are at least a dozen rulings which break the previous line and overturn the decision of the President of the Energy Regulatory Office.
In order to penalise an entrepreneur also for the first two days of restrictions, the ERO has to make a so-called broadening interpretation of the regulations, which, however, according to the legal doctrine, cannot be applied to regulations imposing any penalties. However, this does not prevent ERO from imposing penalties on entrepreneurs for the 20th degree of power supply.
This may be an opportunity for entrepreneurs to avoid a penalty, or at least have it reduced – if not before the ERO, then on appeal.
Is there anything to be happy about?
It is possible to rejoice that something that should work properly does not, and thus favours entrepreneurs. In this case, it is staff shortages at the ERO and the lengthiness of proceedings, which can lead to many cases being time-barred. Defectively written regulations, in turn, make it questionable from a legal point of view to impose a penalty.
Overall, however, this is probably a cause for concern.
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