No reimbursement of recurring operating and maintenance costs for fish migration aids pursuant to Art. 34 EnA

Facts

The A. AG, based in the canton of Valais, operated the Ernen hydroelectric power plant until 9 September 2023. On 10 September 2023, the power plant reverted to the canton of Valais and the concession municipalities due to declarations of reversion. Since then, it has been operated by B. AG as the prospective new concessionaire and owner of the facilities, based on a provisional continuation of operations permit issued by the State Council of the canton of Valais on 6 September 2023. The procedure for the new concession award is still pending.

The water intake in Gluringen (canton of Valais) diverts water from the Rhone via a 12 km long headrace system to the Ernen power plant. According to the canton of Valais’ strategic planning, the water intake significantly impairs fish migration in the Rhone. Therefore, on 16 September 2015, [A. AG] was ordered by decision to plan a remediation measure. The project developed envisaged the construction of an upstream fish passage (fish lift and fish pass) and a downstream fish passage (attraction flow). In addition, protective measures such as a finer screen for the winter water intake and a fish protection screen were planned. The planning approval for the project was granted on 20 September 2017 by the competent Department of Finance and Energy of the canton of Valais after consultation with the Federal Office for the Environment (FOEN).

On 8 May 2020, [A. AG] submitted an application to the canton of Valais for reimbursement of the eligible costs. The canton of Valais forwarded the application with its comments to the FOEN on 12 May 2020. With a ruling dated 14 December 2021, the FOEN ordered compensation for [A. AG] for the eligible costs of the fish migration aids amounting to CHF 1,594,340.- (incl. VAT). In doing so, the FOEN stated that operating and maintenance costs (incl. energy for the fish lift) were not among the costs eligible for compensation pursuant to Art. 34 EnA.

On 31 January 2022, [A. AG] filed an appeal with the Federal Administrative Court and requested the annulment of item 1 of the operative part of the FOEN’s ruling. It sought compensation to cover both the one-off costs of the remediation measure (CHF 1,485,000.- excl. VAT or CHF 1,599,345.- incl. VAT) and the recurring costs for the maintenance and operation of the fish migration aid amounting to CHF 24,000.- excl. VAT per year. With a judgment dated 25 October 2023, the Federal Administrative Court dismissed the appeal, stating that Art. 34 EnA only covers planning and construction costs of a remediation measure, but not recurring operating and maintenance costs.

With an appeal in public law matters dated 4 December 2023, [A. AG] and [B. AG] appealed to the Federal Supreme Court. They requested the annulment of the Federal Administrative Court’s judgment and the extension of the compensation assurance to include the recurring costs for maintenance and operation of the fish migration aid. In the alternative, they requested that the matter be referred back to the FOEN for a new determination of the scope and amount of the compensation assurance.

Considerations

The Federal Supreme Court first examined whether the FOEN, when deciding on compensation pursuant to Art. 34 EnA, should have reached its decision in agreement with the canton of Valais concerned. The appellants argued that the FOEN had issued an unlawful ruling without agreement with the canton of Valais. However, the Federal Supreme Court concluded that Art. 62 para. 2 EnA does not require formal consent from the canton concerned, but merely coordination between the FOEN and the canton. The term “agreement” within the meaning of Art. 62 para. 2 EnA is to be understood from its legislative history as an instrument of coordination, not as formal approval. Moreover, there is no legal dispute between the Confederation and the canton of Valais that would require a mediation procedure pursuant to Art. 44 para. 3 Cst. Therefore, no violation of Art. 62 para. 2 EnA or Art. 44 para. 3 Cst was found.

In a second step, the Federal Supreme Court examined the interpretation of Art. 34 EnA. The appellants argued that the wording of the provision clearly provided for full cost reimbursement and that operating and maintenance costs represented a significant part of the total costs. However, the Federal Supreme Court found that the wording of Art. 34 EnA is not unambiguous. The term “measures” within the meaning of Art. 83a WPA and Art. 10 FishA implies a certain one-off nature, as the measures are considered complete once implemented. Operating and maintenance costs, however, arise after implementation of the measures and merely serve to maintain the legally compliant state. It is therefore not excluded that these costs are no longer considered “costs for the measures”.

The Federal Supreme Court further stated that the principle of legality pursuant to Art. 5 para. 1 Cst requires detailed statutory regulation for regularly recurring state benefits. Since Art. 34 EnA contains no provision on recurring compensation, this speaks against reimbursement of indefinitely recurring operating and maintenance costs. Moreover, the systematic position of Art. 34 EnA in the…