The Council of State decided to provisionally suspend this administrative act, within the framework of a lawsuit seeking its nullity. This decision suspends its application, returning these functions to the regulatory commissions, although it does not imply a substantive decision on its nullity, nor does it provide for the possibility of the Government issuing a new decree with a different scope on this matter.
The Council of State decided on March 2, 2023, to provisionally suspend Decree 227 of 2023 (the “Decree 227“), by means of which, last February 16, the President of the Republic had assumed for three (3) months regulatory functions concerning residential public utilities of electricity, gas, water and basic sanitation.
The main effect of the decision is that the application of the Decree is suspended and, therefore, the regulatory commissions of these services (CREG and CRA) will continue to exercise in an ordinary manner the functions corresponding to their regulation: those attributed to them by the Law and those designated by the President since 1994.
This decision of the Council of State corresponds to an urgent precautionary measure, adopted in the framework of the review by this high court of a nullity action filed by two citizens against this decree. However, it is important to bear in mind that this decision: (i) does not prevent the possibility that the National Government may issue, at any time, a new decree on this matter, in which it may eventually vary the scope of its provisions with respect to the suspended act; (ii) does not compromise the decision that the Council of State will take on the substantive arguments of the lawsuit, which seek the nullity of Decree 227 of 2013, but simply its provisional suspension in the framework of this process.
The arguments of the lawsuit filed with the claim that Decree 227 be declared null and void are, in the summary of the Council of State, that said administrative act of the President:
- It would have been issued irregularly, “to the extent that it was not given to the head of the Nation to assume functions assigned by the Political Constitution to the legislative power“.
- It would have been issued without capacity/jurisdiction, “since the tariff regime of residential public utilities is subject to legal reserve”.
- It would have been issued with false (administrative) motivation, “inasmuch as it was ignored that, in matters of regulation of public utilities, the Constituent established specific powers to the President of the Republic and other authorities, prior express authorization by the Congress of the Republic”.
- It would have been issued in violation of the superior norms on which it should be based, “because the constitutional articles that expressly assign to the legislator the capacity to regulate the tariff regime of public services were ignored”.
To support these arguments, the plaintiffs allege, at a general level, that there is a lack of jurisdiction/capacity of the President to assume the functions of regulating the tariff regime of residential public utilities, since: (i) such powers were expressly assigned by the Congress of the Republic to the regulatory commissions and (ii) that, even in view of the existence of Article 68 of Law 142 of 1994 (which establishes the general legal regime for public utilities) —, which allows the President to reassume the functions— it is an interpretative error to assume that he may reassume all the functions of the commissions, since Law 143 of 1994 (which establishes the general legal regime for the public electric power service) is special and prevalent and this assigns tariff functions directly to the CREG.
In addition, the plaintiffs argue that the Executive did not comply with the applicable provisions regarding the publicity of the administrative act, since, despite the fact that the Law requires that, as a general rule, its draft be published at least fifteen (15) calendar days prior to its issuance, in the specific case the draft of Decree 227 was only published two (2) days in advance. This decision of the Government would not have been motivated in any way with respect to any extraordinary circumstance that would justify this action.
Based on the foregoing, in analyzing the arguments that motivate this action for annulment, the Council of State, based on an analysis of the powers of the President and his powers to delegate functions, considers that there is, in fact, a legal problem that must be analyzed in depth to determine whether Decree 227 would be removing from the commissions any general regulatory function, such as that of regulating rates, which would have been assigned by law to the regulatory commissions and, consequently, were not delegable by the President; generating, as a logical consequence, that it could not “reassume” them either.
Thus, the legality of Decree 227 will be determined by an in-depth legal analysis of these arguments, carried out by the Council of State. However, upon the decision to decree this precautionary measure is final, the provisions of Decree 227 may not be applied, which means that, at least temporarily, the regulatory commissions will once again assume the aforementioned functions.
—Click here for the full text of the Order for Precautionary Measures—
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