The Authority for electrical and gas Energy is an independent authority created by the Law 14th November 1995 N° 481 having the function of regulating and controlling of the electricity and gas energy sectors.
An independent authority is a public administration that makes its decisions on the basis of institutional law and its own procedures and regulations, with a high degree of autonomy in its judgements and assessments as regards executive power. The powers of sector regulation relate to tariff fixing, levels of quality of services and the technical-economic conditions of access to and interconnection with the networks, services where the market would not be able to guarantee the interest of users and consumers by reason of technical or legal obstacles or other restrictions that limit the normal functioning of the competitive mechanism.
- What is its general purpose?
The Authority has the task of pursuing the purpose stated in Law N° 481 of 1995 where it wishes to “guarantee the promotion of competition and efficiency” in the electricity and gas sectors as well as “to ensure adequate levels of quality” of services. Public administrations and companies are obliged to provide the Authority, not only with notices and information, but also co-operation to enable it to carry out its function.
- What is the competence of the Authority?
On the basis of the Law N° 481 of 1995, in carrying out its regulatory and controlling functions, the Authority for electric and gas energy has competence as regards:
The fixing of basic tariffs for regulated services, to be considered as maximum prices net of tax deductions and their up dating using the price cap method (namely ”the maximum limit of price variation pegged for a several year period”)
- Quality of service
The definition of directives concerning the production and rendering services by the respective providers, general and specific levels of quality of service and methods to refund the users and consumers should these be lacking. Supervision on levels of quality as defined by the Authority and the adoption of Service cards. Levels of services can relate to aspects of both a contractual nature (such as the speediness of action with complaints) and technical (such as the continuity of services and safety).
- Market forms
Formulation of observations and suggestions to the Government and Parliament as regards the market forms and the adoption and activation of European Directives.
Notification to the watchdog Authority for competition and the market of the existence of possible infringement of the law of 10th October 1990 n.287, referring to actions and behaviour of companies operating in the sectors subject to control.
Formulation of observations and suggestions to the Government and Parliament as regards services to be made subject to concessions or authorisation; transmission of proposals to the Ministry for Trade and Industry concerning concession, convention and authorisation arrangements and the renewal of current ones.
- Accounting and administration separation
The issuing of directives for accounting and administration separation of the various phases of services in electrical and gas energy in order to guarantee the promotion of competition and efficiency.
- Checking and control
Control of the carrying out of services with powers to obtain documents, inspection, access and fines, determining the cases where compensation is to be paid by the operating company to the users and consumers.
- Complaints and petitions
The evaluation of complaints, petitions and communications presented by users and consumers, individuals or associates, imposing, where appropriate, modifications to the method of the provision of services.
- Resolution of disputes
The management of conciliation and arbitration procedures relating to disputes between users and the operating companies.
- Information and transparency
The diffusion and publication of knowledge relating to the conditions for providing of services aimed at guaranteeing maximum transparency, the competitiveness of the offer and the possibility of selecting best choices by intermediate and end users.
A non profit making limited company formed by GRTN. This guarantees the supply of electrical energy to “tied” users, that is, to those customers that still cannot access the free energy market and thus cannot choose their own supplier. (from 1st July 2004 only domestic consumers are tied).
The term antitrust is understood to mean the total number of legal regulations that have been laid down to protect competition in the economic markets. This collection of regulations forms a protection of a general character for the prime benefit of competition, that is, the competitive mechanism, preventing companies, either individually or jointly, from prejudicing the regular competitive economy by their adoption of conduct that could involve agreements restricting competition, by the abuse of a dominating position and concentrations aimed at the creation or strengthening of a monopoly position.
"Antitrust" is also defined as being the organ or authority that supervises the observance and respect for these regulations, namely, the Italian Authority on Fair Competition (IAFC)
THE AUTHORITY, THE GUARANTOR OF COMPETITION AND THE MARKET
The Authority, the guarantor of competition and the market, entitled also antitrust or IAFC is an independent administrative authority, instituted by Law n. 287/1990.
The Authority has the following tasks: the watchdog over abuses of dominant positions, supervision of agreements and/or cartels that could prove to be harmful or restrictive for competition, the control of concentration operations (mergers or take-overs) that exceed a certain value as communicated to the Authority who then assesses the market impact, consumer protection as regards incorrect commercial practices and damaging publicity, the evaluation and approval of cases of conflict of interest with elements of the Government.
From 1st July 2010 the bihourly tariffs have been introduced by means of which electrical energy has differential costing depending on the time that the consumption of energy occurred.
The bihourly tariff shall be applied exclusively to customers equipped with an electronic meter (able to measure consumption during the various time spans, “F!” “F2” and “F3”) and that have not changed their own electrical energy contract, selecting among the various offers available in the free market.
Certificates of energy efficiency that the Authority for electrical and gas Energy uses as a means of incentivation to save energy, in force as from 1st January 2005. The new method is based on the obligation for most distributors of electricity and gas energy to reach precise objectives in energy saving by means of projects carried out with the end users, either their own or of others.
An annual certificate that attests the production of electrical energy from renewable and assimilated sources. This type of certificate was born in Italy by means of the Bersani Decree (art.11) then to be governed and defined by Decree MICA 11th November 1999. The Green Certificate is conferred by GRTN (Management of the National Transmission Network) to electric energy produced by use of renewable energy sources by plants that started operations after 1st April 1999, and for the first eight years of their operations. For the years following 2002 the Bersani Decree lays down percentage increases of the afore mentioned quota, to be fixed with a subsequent decree of the Ministry of Industry.
- What sector is interested?
Green certificates: production of electricity from renewable sources
White certificates: efficiency and saving in the end use of energy
- What is it?
Green certificates: a commercial certificate that attests a production of electricity from a renewable source
A commercial certificate that attests energy saving
- What is the logic of the system in which it is included?
Green certificates: a green electricity market is created, obliging a minimum production saving. The green certificate is the document that attests that the obligation has been respected.
White certificates: a market of efficiency and saving is created, obliging a minimum saving. The white certificate is the document that attests that the obligation has been respected.
- As regards point 3 who is under this obligation?
Green certificates: the large producers and importers of electricity from renewable sources
White certificates: the distributors of electrical and gas energy
- Who issues it?
Green certificates: the manager of the network (Grtn)
White certificates: the manager of the market (Gme) on the basis of indications from the Authority
- Who can obtain it?
Green certificates: any producer of electricity from renewable sources with new plant
White certificates: the companies that carry out action of efficiency and saving
- What can you do with it once obtained?
Green certificates: it is used to show that regulations have been respected or is sold to persons as per point 4
White certificates: it is used to show that regulations have been respected or is sold to persons as per point 4
- Where is it traded?
Green certificates: bilateral contracts and on the Electric Market
White certificates: bilateral contracts and on the Electric Market (expected operation in 2005: quota exchanges from 2006)
- How much is the total obligation?
Green certificates: for 2002 and 2003 the obligatory quota of energy produced from renewable energy for producers and importers on an annual basis is 2%. As from 2004 and until 2006 the obligation quota is increased annually by 0.35%: the increases in the obligatory quota for the three year period 2007 – 2009 and 2010- 2012 will be determined by decrees issued by the Ministry for Productive Activities.
White certificates: Energy saving = one megatonne oil equivalent in 2005 reaching 1.6 megatonne oil equivalent for the electrical sector and 1.3 megatonne oil equivalent in the gas sector in 2009. Following this the Ministry for Productive Activities and the Ministry for the Environment and Protection of Territory will decide.
Components of the electric tariff covering respectively:
- General expenses relating to the electric system
- Costs sustained in the common interest
- UC1 tariff components are understood to mean single components expressed in Euro/kWh and in Euro/user per year to cover imbalances in the equalisation mechanism.
- UC2 tariff components cover a further revenue component in favour of the production of electrical energy of producers/distributors for the tied market, set up for the transition to the new organisation al arrangement of electrical energy generation, relating to the requirements of the development in public utility services, corresponding to the general interests of the Country and is indicated in the Document of Economic and Financial programming 2000-2003.
- GR tariff components are understood to mean single components expressed in Euro/kWh and in Euro/user per year, by which a gradual process in the effects of the new tariff system compared to the current tariffs is guaranteed.
The price paid by the user for services of connection to the distribution network by means of the extension of the distribution line to the intake point of the user, or for modification to the existing connection.
Service of transport of gas from one point to another in the network, operated by the distributor on request by the gas owner.
The legislative Decree n° 79 of 16th March 1999 (Bersani Decree) adopts the European Directive 96/92/CE relating to the liberalisation of the European energy market. The decree introduces liberalisation in production, importing, exporting and in the sale of electrical energy to users considered suitable. The purpose of the decree is to create a system of free competition, regulated however by norms to protect the end user, in coherence with the principle of public utility of electric energy.
The natural gas sector has recently been subject to important regulations at a national and community level; in particular the process of regulation was started by the Gas Directive (Directive 98/30 CE of Parliament and the European Council of 22nd June 1998), containing common rules for transport, distribution, supply and storage of natural gas. The Gas Directive was adopted in Italy in May 2000 by the Letta Decree (Legislative Decree 23rd May 2000 n°164).
The decree radically modified the conditions for carrying out public services in the distribution of gas by local networks, with the purpose of introducing competition, promoting efficiency and quality of supply.
In synthetic terms, in order to liberalise the sector and to create a single European natural gas market, the Gas Directive introduced the following basic principles:
- Access to the networks at equal conditions
- Suitability. Determining of the minimum categories of persons admitted to access directly the transport and distribution networks (so called “suitable users”, all other users are subsequently “unsuitable users). In Italy as from 2003 all users are suitable.
- Unbundling, In order to liberalise the market, integrated gas companies are obliged to handle a separate accounting system for activities of importing, transport, distribution and storage of gas, so as to highlight the allocation of revenue and costs between the various segments of the activities of gas companies. The unbundling can be accounting or corporate (more significant). Italy opted for an unbundling of corporate type.
Legislative decree n° 22 of 5th February 1997 –“the Adoption of the Directive 91/156/CEE on waste, 91/689/CEE on dangerous waste and 94/62/CE on packaging and waste packaging
- Electric energy
Activities of management and coordinated regulation of production plants, National Transmission Networks and auxiliary services – activities conducted by appropriate regulations and entrusted to the Terna Company.
- Natural gas
Activities of management and coordinated regulation of cultivation and storage plants, the transport and distribution network and auxiliary services – activities conducted by appropriate regulations.
The term is generically applied to activities of transport of gas and is distinguished between primary distribution (through the pipelines and the distribution network) and secondary distribution (through the network of local pipelines) by means of medium and low-pressure networks.
The decree n*164/00 makes these two clear; in Italy at present distribution is carried out by concerns (distributing companies), different from those operating in transport.
Active Energy (power)
Electric energy transformable into energy of another kind (e.g. mechanical energy; it is measured in Watt (W).
Reactive Energy (power)
In an electric system in alternating current this represents continuous energy exchanged between the different electromagnetic fields associated with the functioning of the same electric system and all the equipment connected to it. It is measured in reactive Volt Amperes (RVA). Contrary to active energy (power) it cannot be transformed into energy of another kind.
The sun, wind, water resources, geothermal resources, tides, wave motion and the transformation into electrical energy of vegetable products or organic/inorganic waste
Euribor (European interbank offered rate)
Interbank rate of reference. For the free market a new method was introduced that provides for the application of EURIBOR, as stated by the Art.5 of the Legislative Decree n°231 of 9/10/2002, increased by 5 percentage points in case of belated payment of invoices relating to services/supply rendered to the user.
Electronic equipment that apart from carrying out the traditional function of measuring the energy consumed is read and managed at a distance.
A system of wholesale selling of energy that determines which generation or plants should be called upon to meet demand at any time and fixes the price of the energy at that specific time.
The consumer who purchases gas for his own use.
The Manager of the Electrical Market (Gestore del Mercato Elettrico (GME) is a limited company 100% controller by GRTN.
It has the task of managing operationally the electricity market to create the best conditions so that the operators in the sector may work within a framework of neutrality, transparency and free competition.
GME also guarantees the availability of electrical Energy in the market and arranges for supply and demand are in harmony. (GME has been entrusted with the management of the Electric Market).
GME has also the task of managing the non-electrical markets, namely the Green Certificates and the Energy Efficiency Certificates.
GRTN, (Gestore della Rete di Trasmissione Nazionale) Manager of the Network for National Transmission)
A limited company, owned by the Treasury, responsible for the transmission and despatch of electrical energy.
The GRTN has also the mandate to handle the unified management of the Network for National Transmission, independently from the ownership of the network itself, so as to guarantee equality in treatment for all electrical operators.
Gross Calorific Value of natural gas that expresses the volume of heat produced by a standard cubic metre of gas and expressed in MJ/m3
A traditional heat-measuring unit corresponding to 4.186,8 joules.
1,000 volts. The volt is the unit of measurement of the force of an electrical current
The unit of measurement of power; 1kW = 1.000 W.
The unit of measurement of electrical energy equal to the electrical energy produced in one hour by a machine having 1 kW power.
The levels of quality of service of distribution and sale are fixed at a national level by the Authority for electrical and gas energy, aimed at promoting an overall improvement in services offered. They are split between:
- Specific quality levels, relating to a single performance to guarantee to the user
- General levels of quality relating to overall performance to guarantee to the user
A representation of the demand for energy from the network over the course of time. The expression can be on an hourly basis or a quarter of an hour
The acronym LPG (Liquified Petroleum Gas) describes all the mixtures of hydrocarbons propane and butane that are obtained both from the refining of crude petroleum and to a lesser extent from the extraction of natural gas.
Few compression atmospheres permit the production and storage of this gases in liquid form. The liquid form permits therefore a greater ease in transportation of LPG compared to other combustibles.
A coefficient determined on the basis of the altimetric zone, the climatic zone and day degrees of the locality served. This is substantially a corrective consumption coefficient.
This is the meter, i.e. that part of the supply plant of the user that serves as an interceptor for measuring gas and for connection to the user’s internal plant. The measuring group can also contain a corrector of the volumes measured.
The overall piping of large dimensions for transporting natural gas over long distances and at high pressure.
Type of tariff option for electric users who pay the electricity consumed in a different way depending on the time bands or the days of the week.
Since in its natural state gas is odourless, in order to detect any losses from the pipe and plant, a substance is normally added to the gas that gives it a characteristic smell that can easily be detected.
The relative gas pressure: low pressure (LP) and
- Gas pressure not exceeding 0.04 bar, where the gas distributed is natural or manufactured;
- Gas pressure not exceeding 0.07 bar, where the gas distributed is liquefied petroleum gas.
Equal Reconciliation is an instrument for the solution of disputes and to provide an adequate and efficient protection of the rights of citizen consumers without the need to resort to legal steps.
All consumers of the sales companies that have followed the appropriate protocol may make use of the Equal Reconciliation.
This procedure may be followed only when a complaint has already been registered and where no satisfactory reply has been received within the deadlines fixed by the resolutions of AEEG or where no satisfactory reply has been received by the user.
The procedure takes place by approaching one of the Consumer Associations that has subscribed to the Equal Reconciliation.
The request for settlement must be signed by the user using the pre-printed form and sent via the Association to the sales company, together with all documentation necessary for handling the dispute.
The action on the part of the user and subsequent communication to A2A Energia, of reading consumption shown by the meter.
Type of tariff option for electric users who pay in the same way the electricity consumed during a day’s period, irrespective of the time bands or the days of the week.
Combination of measurement points that apply to an area, and the availability of a singe person (physical or juridical) not having a continuity solution, with the exception of areas separated solely by a road, a made up road, or watercourses or connected anyway by an electric line available exclusively to the same person.
Before the complete liberalisation of the market, that took place on 1st January 2003, a “suitable customer”, in conformity with the Decree 164 of 2000 (Letta Decree), was understood to mean that physical or legal person authorised to enter into contracts of supply, purchase, or sale with any producer, importer, distributor or wholesaler, both in Italy and abroad. The threshold of individual suitability of the regulation was based on an annual consumption in excess of 200,000m3. From 1st January 2003 all end users are “suitable” and can select freely their gas selling company.
The unit of measurement for calculating the volume of gas used under determined conditions, defined “standard”, i.e. at an atmospheric pressure and at a temperature of 15°.
Gas reserves in store, in a location with particular biological characteristics, generally this is an exhausted mine.
The range for determination of tariffs for distribution activities, formed by the combination of localities served by the same distributor.
Terna,(the National Electric Network) is the company responsible for the transmission and dispatch of electrical energy on the network at high and extra high voltage throughout the Italian territory (activity conducted by GRTN until November 2005).
Terna is a limited company listed on the Stock Exchange.
According to the terminology introduced by the European Directive concerning the internal electrical energy market, (96/92/CE) this indicates the market quota not open to competition where the user cannot select his supplier.
A tied market is guaranteed , in conformity with the legislative decree n° 79/99, the single national tariff (see: Tied user)
According to the terminology of the European Directive 96/92/CE regarding the internal market of electric energy, this relates to users not admitted to operate in the free market, but that are subject to regulatory tariffs.
According to Decree n°79/99, art.2 § 7 this is the end user that, not forming part of the category of suitable users, is authorised to enter into supply contracts exclusively with the distributor who carries out this service in the territorial area where the user is located.
From 1st July all non domestic users acquired suitability.
In the case of supply to large users connected at high or medium voltage, it is possible to adopt a system defined multihour, that allows for different tariffs for peak periods (F1), hours of high load (F2), hours of medium load (F3) and idle hours (F4). The subdivision during the day and the week of these bands is different for supply at medium voltage and high voltage.
The activity of transport and transformation of electrical energy on the interconnected network (I.e. connected to the import border and to the generation plants, at high and extra high voltage.
- Natural gas
The transport of natural gas through the pipeline network, excluding the cultivation pipelines and the distribution networks
- Electrical energy
Refers to electrical energy and indicates the activity of Transmission and Distribution
As from January 1999 the official Reference Rate TUR replaces the Official Discount Rate TUS, fixed by the Bank of Italy, in case of belated payment of invoices relating to services/supplies rendered to the user. A sanction of TUR is applied increased by 3.5%.
kWh Kilowatt /hour
mWh megawatt /hour equal to 1.000 kWh
gWh gigawatt /hour equal to1.000.000 kWh
tWh terawatt /hour equal to 1.000.000.000 kWh
Capacity to provide an electric current. The voltage splits into the following measurement units:
- Extra high voltage higher than 150kV
- High voltage between 35 and 150 kV
- Medium voltage between 1 and 35 kV
- Low voltage lower than 1 kV
The Ronchi Decree defines waste as “substances and objects forming part of certain categories where the holder discards, has decided to, or is obliged to discard.”
The Ronchi Decree classifies waste by origin, urban and special and depending on the degree of danger, dangerous or not dangerous.
Measuring unit for power
A physical or legal person who purchases and sells natural gas and who does not conduct activities of transport or distribution inside or outside the system in which he is established and operates.