An arbitration tribunal has rejected electricity distribution company REN’s legal argument that that the ‘extraordinary contribution' demanded by the government of the energy sector was unconstitutional.
REN, Portugal’s National Energy Network, was just one of the companies in the energy sector that saw the special tax as illegal as well as painful and challenged it in court.
The arbitration tribunal that examined the REN case considered the imposition of the special levy as lawful as the money raised is assigned to a specific objective, i.e. a fund for the sustainability of the energy sector.
The arbitration tribunal held that, contrary to the REN lawyers' argument, most other energy stakeholders including producers of renewable energy, have been called on to make an effort to reduce tariffs and that as the tax was not for general government spending the sector's players had to pay up.
In the REN case, which of course is subject to appeal, the company is required to pay about €800,000 per annum and oil giant Galp Enegia will have to stump up nearly €30 million per year.
Portugal’s formerly state owned electricity supply company EDP is looking at a bill of €69 million annually with the cost inevitably being passed on to the consumer.
