There has been, and still is, much legal dispute over the matter of whether the EEG surcharge (EEG = Erneuerbare-Energien-Gesetz (Renewable Energy Sources Act) was payable in the case of leased power plants and, if so, under what conditions. This issue is currently the subject of a large number of court cases. The question at the core of the issue is generally whether the party leasing the power plant has validly become its operator. This depends in particular on the manner in which the economic risks are distributed in the contracts between the power plant owner and the lessee.
In an as yet unpublished decision handed down on 15 June 2022 (case 15 O 1271/20), Munich Regional Court adjusted the criteria for the definition of “plant operator”. One key point of contention in this and other proceedings is the question of whether a short notice period for the lease stands in the way of the lessee being deemed the plant operator. Unlike other courts, Munich Regional Court is of the opinion that the notice period in lease agreements has no relevance when it comes to the question whether a lessee qualifies as the plant operator or not.
The good news first: The Munich Regional Court ruling and its clearly worded grounds support the existing plant lease models. The lease notice periods are basically irrelevant when it comes to the distribution of the economic risks of the operation of the plant – what matters is, rather, that it is the lessee that bears the economic risks of operating the plant during the term of the lease. The bad news is that Munich Regional Court’s ruling shows once again that although the EEG surcharge has been abolished, transmission system operators are actively putting power plant leases to the legal test, which means that companies are finding themselves facing claims for very significant back payments of EEG surcharges. Because Munich Regional Court’s ruling may well go through the entire appeal process, i.e. via Munich Higher Regional Court to the Federal Court of Justice, the risks associated with plant leases remain.
Background
Power plant leasing has become common practice throughout Germany over recent years, and the rationale behind this is often twofold: First, the law explicitly states that the plant operator does not have to be the owner of the plant; there is no question, therefore, that the leasing of power plants is possible and that the plant can be operated by a lessee. Second, the (in the meantime abolished) EEG surcharge was not payable on electricity that the plant operator supplied to itself. In the past, energy-intensive companies increasingly went down the road of leasing large and small power plants and using the produced electricity for themselves.
In the context of power plant leases, transmission system operators, who have the right and the obligation to collect the EEG surcharge, are now increasingly seeking clarification of the legal question of whether the plant lessee and electricity consumer has actually also become the plant operator. The lawsuits filed by the transmission system operators not only concern so-called capacity lease (“slice lease”, Scheibenpacht) scenarios, which are a special kind of plant lease, but also leases in which the entire power plant is to be operated by one lessee. These lawsuits generally involve the transmission system operators suing the plant owner for payment of the EEG surcharge for electricity (allegedly) “delivered” to the plant lessee. In its defence, the plant owner then argues, among other things, that the power plant was leased out and the lessee acted as the plant operator; as the plant operator, the lessee generated and consumed its own electricity.
Plant operator must bear the economic operational risks
In a lease scenario the courts make an overall assessment, involving a number of different criteria, to determine whether the lessee is the operator. Under established case law, the plant operator has to bear the economic risk of operating the plant and has the right to use the plant for its own account and with its own economic opportunities (first criterion). Further criteria factored into an assessment of the status of plant operator are the possibility to influence the operating procedures at the plant (second criterion) and the actual right of disposal over the plant (third criterion).
Especially with regard to the first criterion, i.e. the distribution of the economic risk of operating the plant, the courts have to look into the details of the contractual relationship between the lessor and the lessee. This is complex in the individual case because there is frequently not just one single contract, but a whole set of them (e.g. a lease contract together with a fuel procurement contract, a management contract and a service exchange contract). Considerable uncertainty has arisen in recent months as a result of Duisburg Regional Court having ruled that economic risks did not pass over because the contract provided for a right of (regular) termination of the lease; in another case, Düsseldorf Higher Regional Court (case I-27 U 12/20, 27 U 12/20) pointed out that even the possibility to terminate without notice in the event of a plant failure can minimise the plant lessee’s economic risk and thus the lessee cannot be qualified as an operator. This comes as something of a surprise given that termination rights in leases are not only customary in the market, but are even provided for by law; they can therefore hardly be used as an argument against operator status. The increasingly strict (lower court) case law on the transfer of plant operator status has led to considerable legal uncertainty around power plant leases.
Munich Regional Court is now – loudly and clearly – pushing back. Its decision was based on a lease that was terminable on either one or four months’ notice, depending on the circumstances. In its grounds for the decision – which has not been published yet – the court made it clear that the option to terminate the contract has no influence on categorisation as plant operator. The termination of a contract has no effect, it argues, on the bearing of the economic risk during the term of the contract.
Gleiss Lutz commentary
Determining the plant operator in multi-person relationships will continue to occupy the courts – if only because the decision handed down by Munich Regional Court will presumably go through all the stages of appeal (Munich Higher Regional Court and possibly the Federal Court of Justice). The transmission system operators are also examining other scenarios and, although the EEG surcharge has been abolished, are continuing to sue for payment of surcharges that – in their opinion – should have been paid in the past.
With recent months having seen the prerequisites for the valid transfer of operator status tighten considerably, the Munich Regional Court ruling can be seen as a positive sign for affected companies who trusted in the permissibility of plant leases. The transmission network operators – and some courts – called de facto for lessees to be required to also shoulder fundamental risks attaching to the plant, therefore making them the “beneficial owner” of the plant. In view of the clear wording of section 3, no. 2 EEG, which can also be applied to fossil-fuelled power plants, the only criterion is who actually “uses” the plant; assumption of fundamental risks is not a prerequisite for the operation of the plant in this sense. Munich Regional Court’s ruling is to be welcomed insofar as it makes it clear in terms of operator status that, above all, it is the bearing of risk during the operation of the plant that is the key factor.
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