Resolution ARG/gas 64/2009: Approval of the code for the retail sale of natural gas and gas other than natural gas distributed through urban pipeline networks
With resolution ARG 64/2009, the Authority for Electricity and Gas approved the code for the retail sale of natural gas and gas other than natural gas distributed through urban pipeline networks.

Main changes introduced by the Authority refer to the definition of a unique national value for sale price to retail customers, including a new calculation mechanism of distribution tariffs aimed to favour domestic customers with a low consumption profile, and, since October 1, 2009, the review of the formula for calculating the components to cover the wholesale marketing costs.

Resolution ARG/gas 159/2008: Tariff criteria for the 2009-2012 regulated period for the service of gas distribution and measurement and transitional rules for 2009
With resolution ARG 159/2008, the Authority for Electricity and Gas approved a new methodology for determining revenues to natural gas distributing companies that operate through local low pressure networks and serve final customers in the residential and tertiary sector. Starting from July 1, 2009 and for the duration of the three-year regulated period, i.e. until 2012, the resolution provides for the recognition of total revenues for each regulated year amounting to a value that the Authority will set at the time of approving the operators’ requests for distribution tariffs and defined as total revenue cap, representing the maximum remuneration recognized by the Authority to each operator for covering costs borne. In previous years, revenues were determined by applying tariffs set by the Authority to volumes actually distributed to selling companies in the relevant year. The resolution also provides for any positive or negative difference between the total revenue cap and revenues resulting from invoices for actually distributed volumes to be regulated through an equalization device making use of credit/debit cards lodged with the Electricity Equalization Exchange. As a result of the new mechanism, revenues are no longer related to the seasonality of volumes distributed. The introduction of this new mechanism does not cause a decline in total revenues on a yearly basis.

Law No. 99 July 23, 2009 converting the “Anti-crisis Decree‘
Within the framework of measures approved to counter the economic downturn, on June 26, 2009, the Italian Council of Ministers approved the so called “Anti-crisis Decree‘ whose article 3 concerns measures for reducing the cost of energy for companies and households and introduces the obligation for Eni to make new sales at the virtual exchange point for a total of 5 bcm of gas (so called gas release) in the period October 2009-September 2010. In particular the decree provides for these sales to be made under non discriminatory competitive procedures (bids) at the terms and conditions decided with proposal of the Authority for Electricity and Gas. The price paid to Eni is determined with a decree of the Ministry for Economic Development, as recommended by the Authority, taking into account the average prices on the most relevant European markets and the structure of supply costs borne by Eni. Any positive difference between the sale price determined by the procedure of volume allocation and that determined by the Ministry and the Authority will be destined to industrial final customers that showed a high use rate of gas withdrawals in the past three years according to criteria determined by the Ministry. The decree provides also that the Authority within 90 days from the entry into force of the same decree:

• introduces degressive elements in transport tariffs for the 2010-2013 regulatory period;
• reforms the balancing methods by adopting flexibility mechanisms providing advantages to all final customers, including industrial customers;
• promotes the supply of peak services and storage for industrial and power generation customers.

Resolution ARG/gas 184/2009 - Quality and tariff code for the natural gas transport and dispatching services and tariff regulations for the metering service of natural gas transport for the 2010-2013 regulatory period
With resolution ARG/gas 184/2009, published on December 2, 2009, the Authority set the criteria regulating the tariffs for natural gas transportation on the national and regional gas pipeline network for the third regulatory period (January 1, 2010 - December 31, 2013).
The Authority also recognized Snam Rete Gas a total amount of €33.6 million as settlement of additional costs incurred during the 2007-2008 thermal year and referring to the purchase of fuel gas for compression stations. The Regulatory Asset Base (RAB) is calculated with the re-valuated historical cost methodology.
The allowed rate of return (WACC) on the RAB has been set equal to 6.4% in real terms pre tax.

The new tariff structure confirms the recognition in tariffs of expenditures incurred for network upgrading, providing for a higher remuneration than WACC, changing in a 1-3% range in relation to the nature of expenditures and for a period of 5 to 15 years. Depreciation costs of gas transport infrastructures (gas pipelines) are determined on a 50-year useful technical life and are excluded from the price cap mechanism. Operating costs are defined with reference to operating costs incurred during 2008 and increased by a 50% rate to recognize productivity gains achieved in the second regulatory period. Fuel gas is excluded from the price cap mechanism. The revenue component related to volumes transported is determined referring to operating costs recognized in tariffs and amounts to 15% of the revenue cap.

Third Energy Package: 2009 European Directive No. 2009/73/CE
As a part of the so-called “Third Energy Package‘ published in 2009, European Directive No. 73 regulates the internal market for natural gas requesting that member states choose one of two options for ensuring  carriers’ independence in case transport systems belong to vertically integrated companies.
The two options provided are:

• Separation of ownership under two alternative modes:
  • Ownership Unbundling (OU): the company that owns the networks and manages transport activities is unbundled from its integrated parent company that will retain supply/production and sale activities;
  • Independent System Operator (ISO): the vertically integrated company retains ownership of the networks but confers their management to a third independent party.
• Strengthened functional separation:
  • Independent Transmission Operator (ITO): the vertically integrated company retains control of the company that manages transport activities and owns transport networks, provided the vertically integrated company refrains from interfering in the decision-making process of the controlled carrier company.