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Gas distribution

The year 2010 is the second year of the third regulatory period (2009-2012) for setting tariffs for gas distribution and metering. The regulatory reference for this period was introduced by resolution AEEG (Italian Authority for Electricity and Natural Gas) ARG/gas no. 159/08 of November 2008.

Due to the positive completion of the preliminary surveys launched by AEEG in the second half of 2009 regarding the balance sheet data transmitted for determining tariffs, HERA SpA was among the operators that obtained, from December 2009, the final approval of the reference tariffs for 2010, with resolution ARG/gas no. 206/09. The determination of tariffs pursuant to resolution 206/09 was confirmed and several details of the calculation procedure were finalised with the recent resolution ARG/gas no. 115/10 of 28 July 2010.

The tariff levels approved for 2010 were identified by the AEEG taking into account, in particular, the gradual implementation of the recognition of capital costs, introduced for the purpose of diluting, over the four-year regulatory period, the variances registered compared to the values approved using the previous methodology. The tariff adjustments up to 2010 take into account, on a secondary level in terms of economic impact, the changes in net capital employed in 2008 and the updating of operating costs reimbursed according to the price cap rule, applying annual productivity recovery rates which for HERA amounted to 3.2%. Parallelly, said resolution 206/09 approved the mandatory tariffs to be applied in invoicing to sellers, with reference to six macro-regional areas in which Italy is divided.

In the picture described above, gas distribution and metering revenues for the first half of 2010 for HERA SpA amounted to Euro 82.5 million, with distribution volumes of 1,371 million of cubic metres, with a corresponding unit return of Euro cents 6.02 per cubic metre. The amount of revenues reported already takes into account a suitable estimate of the effects of tariff equalisation.

Compared to the first half of 2009, given a change in distributed volumes of 9% (increased from 1,256 million cubic metres to 1.371 million cubic metres) revenues increased by about 7%, from Euro 76.9 million to Euro 82.5 million. The increase of Euro 5.6 million, was primarily due to the growth in permitted revenues forecast for 2010 by resolution 206/09, compared to the 2009 values, specifically motivated by the setting up of the second portion of the gradual implementation of recognition of capital costs identified using the methodology of resolution 159/08. Secondly, the increase in tariffs compared to 2009, recorded on a year-over-year basis, is highlighted if compared to the accruals in the first two months, due to the specific caution taken at that time in forecasting revenues for the half-year financial statements as at 30.6.2009, given the significant level of uncertainty present at that time regarding the regulatory framework.

Taking into consideration Marche Multiservizi SpA in the scope of consolidation of the HERA Group as at 30 June 2010, it should be noted that the consolidated value of revenues from gas distribution and metering for the Group amounts to Euro 90.7 million, for 1,475 million cubic metres distributed and a corresponding unit revenue of Euro cents 6.15/cubic metre. It is noted that the final approval of the reference tariffs for Marche Multiservizi was given by resolution 115/10, which superseded the determination of the tariffs by the AEEG on its own motion, with resolution 206/09.

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