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Regulatory framework

Regulatory framework

Legislation

The first half of 2010 was marked by various legislative interventions that impacted the local public utilities market.

On 22 July 2010 the Council of Ministers definitively approved the scheme of the Presidential Decree setting forth the implementation regulations for the reform of local public utilities, pursuant to art. 23 bis of Law Decree no. 112 of 25 June 2008, converted with changes into Law no. 133 of 6 August 2008, as amended. Specifically, the law requires that local authorities issue a framework resolution within one year from the entry into force of the regulation, following a verification of whether it is effectively possible to achieve competitive operation of local public utilities. It also establishes the threshold over which an in house assignment will be subject to the opinion of the Antitrust Authority, which is equal to a financial value of the service of Euro 200 thousand. The general principles for the call for tenders are listed, which mainly include qualitative criteria for assessing the bids based on price criteria, for procedures regarding both the quality of the partner and the assignment of operational duties to them. A call for tender must also indicated the value of the assets in the event of substitution by a new operator, meaning an amount equal to the original book value prior to amortisation/depreciation, without prejudice to the sector provisions and agreements stipulated prior to the regulation entering into force.

For energy services, it is important to note several guiding principles to be taken into consideration in implementing EU energy regulations (specifically, Directive 2009/72/EC for the internal electricity market and Directive 2009/73/EC for the internal natural gas market), set out by European Community Law 2009 (Law no. 96 of 4 June 2010). In general, the criteria focus on the need to ensure increased competition and greater efficiency in the energy markets, including through the combination of small companies. Moreover, at regulatory level, it envisages more intense coordination between the activities of the AEEG (Italian Authority for Electricity and Natural Gas) and those of the Italian Antitrust Authority. For the natural gas market, among the guiding criteria it is important to note: the setting up of “intelligent” metering systems, in order to more effectively diversify supply prices; the need to ensure a suitable separation of activities in the chain (transport, balancing, distribution, storage); the introduction of tools for optimising the networks; the provision of specific protection as regards economic terms and conditions and continuity of supply, both for residential customers and non-residential customers with consumption less than or equal to 50 thousand cubic meters per year, who are considered “vulnerable customers”. Lastly in implementing Directive 2009/28/CE on the promotion of energy from renewable sources, the provision specifies a principle of simplification of authorisation processes for the construction and operation of plants powered by renewable sources. The incentivation of these energy resources was set out by the economic manoeuvre approved with Law no. 122 of 30 July 2010, converting Decree-Law no. 78 of 31 May 2010, setting forth urgent measures for financial stabilisation and economic competitiveness. Specifically, the regulation requires that a Ministerial Decree be issued by the end of the year, in order to establish specific criteria for reducing the general charges of the electricity system. These criteria must guarantee that the amount deriving from the collection of Green Certificates by Electricity Services Operators, starting from those pertinent to 2011, is 30% less than the amount pertinent to 2010, and that said reduction is 80% accounted for by the reduction of excess Green Certificates. The provision also confirms the non-tax nature of the TIA (Environmental Hygiene Tariff), which, despite entering into force with Legislative Decree no. 152 of 3 April 2006, has been subject to various institutional opinions regarding its legal nature.

Other changes in legislation regard the plants subject to the system for trading carbon dioxide (CO2) quotas, which were affected by Law no. 111 of 19 July 2010, converting Law Decree no. 72 of 20 May 2010, setting forth urgent measures for the deferment of terms on environmental and transport matters, as well as for the assignment of CO2 emissions quotas. This provision sets out the new assignment of quotas for the period 2008-2012, to plants which started operations after April 2009 which had not received their due quotas due to the exhaustion of the “reserve for new entries” (27 million tonnes of CO2).

It is also noted that Law Decree no. 105 of 8 July 2010, which grants the Council of Ministers the task of reaching an agreement with the regions and autonomous provinces to identify the urgent interventions concerning energy transmission, distribution and generation.

Lastly, for the integrated water service, it is important to note the provisions set forth by Law no. 42 of 26 March 2010, which, in art. 1.1 quinquies establishes the upcoming closure of the ATO (Water and Waste Regulatory Authorities), granting mandates to the regions to assign the functions carried out by these Authorities according to principles of subsidiarity, differentiation and adequacy.

 
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