State Guarantees for Publicly-Owned Electricity Utilities: Iceland Constrained to Change Rules by EFTA Surveillance Authority to Be Compatible with State Aid Regime
EFTA Surveillance Authority (ESA) announced on 24 April 2013 that it had decided to close a case concerning the qualification as state aids and legality of state guarantees granted to two publicly-owned electricity utilities in Iceland , namely Landsvirkjun and Orkuveita Reykjavíkur. The previous Icelandic rules provided unlimited state guarantees to the two publicly owned electricity utilities, which was considered by ESA as state aids incompatible with EEA law . To put an end to the investigation, Iceland had to change its rules for the attribution of state guarantees to these undertakings . The main changes adopted relate to: - the end of unlimited state guarantees for the two publicly-owned electricity utilities; - the payment by the two companies of a "state guarantee premium" equivalent to the benefits derived from the state guarantee, to be adjusted each year; - the prohibition from getting a guarantee covering more than 80% of either an outstanding...