Examining legislative measures adopted by Hungary in the energy sector, the EC found that the law excludes certain types of costs from the calculation of network electricity and gas tariffs, in violation of the principle of costrecovery of tariffs provided for in the Electricity and Gas Regulations.

In addition, the EC found that Hungary had adopted amendments to its energy legislation which jeopardise the right of market operators to a full judicial review of the national regulator’s decisions on network tariffs.

The Third Energy Package requires that tariffs applied by network operators for the use of electricity and gas networks are regulated in order to prevent anticompetitive behaviours, and entrusts national regulatory authorities with the task of setting these tariffs or their methodologies.

The Commission sent Hungary a letter of formal notice on these issues in February 2015, and reasoned opinions in December 2016 and April 2017. Since compliance with EU law is not yet in place, the EC has decided to refer these matters to the CJEU.