On April 5, 2018 the Senate discussed the Senate bill amending Act No. 458/2000, the Energy Act (the “Bill”). The purpose of the Bill is to adjust the method of covering costs associated with relocation of energy equipment.
Businesses in the energy industry have the right to place their energy equipment on real property owned by third parties. If, however, the owners of the real property where the energy equipment has been placed need to have it relocated for any reason, pursuant to the current version of Act No. 458/2000, the Energy Act (the “Energy Act”), they are obliged to reimburse the owner of the energy equipment for the costs associated with said relocation, regardless of the reason for the relocation.
Since relocation costs can reach six digits and more, often much higher than the consideration real property owners receive for the restriction on their rights due to the energy equipment placed on their real property, a group of senators has proposed introducing a number of exceptions where those requesting relocation would not be required to reimburse the owner of the energy equipment for the costs of the relocation, but rather the costs would now be borne by the owner of the energy equipment.
The Bill currently states that relocation costs would be borne by the equipment owner (i) if the equipment is damaging the real property owner’s property and the equipment owner does not correct the situation, or (ii) if the relocation is necessary due to a change or required removal of a structure or landscaping or (iii) if the relocation is necessary due to building a structure on a plot that was zoned for building at the time the equipment was placed on it pursuant to a legal regulation valid at the time, with other exceptions to be stipulated by an ERO decree.
The Bill further specifies that if the applicant pays the relocation costs, the owner of the (relocated) energy equipment must provide the applicant with information on the anticipated costs and a detailed breakdown of the relocation costs, only billing for the actually necessary costs.
The Senate sent the Bill for discussion in committees, which should be complete by July 4, 2018. If the Senate approves the Bill, it will be passed to the Chamber of Deputies for further discussion.
We can expect a widespread professional debate regarding the Bill, since the proposed changes raise a number of constitutional, legal and economic questions that will need to be addressed, in particular the nature of the easements where the owners of the land have already undertaken to permit the restriction of their rights to the plots. There is also some concern that any new costs for the owners of energy equipment will pass on into distribution prices for end customers.