1 The Regulatory Authority for electricity and gas:, The Regulatory Authority for electricity and gas: objectives, tasks, independence, accountability and organisation Fabio Tambone Head of Institutional International affairs 4 th of March 2010

2 THE ITALIAN REGULATOR FOR ELECTRICITY AND GAS role: from where and the evolution independence, autonomy and accountability reporting and dialogue three year plan international commitment third EU energy package Italian regulator: facts and figures AEEG

3 The Regulator sets its own organisation its internal rules and procedures for overall decision-making based on criteria of transparency The Government sets rules and procedures for individual decision-making in order to maximise guarantees Independence, autonomy, accountability (1/3)

4 Independence, autonomy, accountability (2/3) Board appointment: – proposal by the Council of Ministers, approval by two- thirds majority of the relevant Parliamentary Committees – mandate 7-year terms not renewable Financing: –AEEG financed by levy directly from regulated entities which it sets by Law (1/1000 as a maximum of annual revenues, currently fixed at 0,3/1000) –yearly report on financial activities, which audited by Italy’s Court of Accounts Difference between the Board and the operational structure: –AEEG Board (5 Members) defines, addresses and controls all the activities, while the operational structure is in charge of operative and management tasks

5 Independence, autonomy, accountability (3/3) Accountability: –appeal procedure: judgment of first instance in front of Administrative Court; as judgment of second instance in front of the Council of State who delivers final decisions –obligation each year to submit an annual report on the activities to the Parliament and to the Prime Minister –ex-post auditing of accounts by Corte dei conti (National Auditing Office) Transparency: –publication of decisions on AEEG’s website and in the Italian Official Journal –yearly general public hearings –three year Strategic rolling Plan –hearings with stakeholders (companies, consumers, environmentalists, trade unions and business groups) periodically to collect relevant issues and interests and occasionally before major decisions (i.e. tariff reforms) –hearings with Parliamentary Committees (e.g. in case of Parliamentary investigations) to give advice on specific subjects.

6 Regulatory Authority for Electricity and Gas (AEEG) The framework of accountability in AEEG advice, proposals and Annual Report Laws and general policy guidelines Antitrust Competition infring. State Council Regional Administrative Court Regional Administrative Court appeals sentences appeals European Commission active participation directives CEER ERGEG advice and notice complaints Consumers associations & other stakeholders hearings Regulated companies data and information regulation requests for advice Parliament Government & Ministers Government & Ministers President of the Republic formal appointments proposal for appointments approval (2/3) of proposal

7 Reporting and Dialogue (1/2) Institutions: Annual Report Hearings Recommendations

8 Reporting and Dialogue (2/2) Other stakeholders Public Consultation  from 1997 to 2007 have been launched 209 public consultations Regulatory Impact Analysis  in 2007 five RIA were made on: social tariffs, the new regulatory tariff period for electricity service; tariffs for gas distribution; definition of the new load profiling for the electricity service Three years and annual plans Hearings, seminars, forum, focus group

9 Three Year Plan (1/4) National and international scenarios Strategic objectives  operational objectives

10 Three Year Plan (2/4) A) Promoting the development of competitive markets A1 Developing and harmonising the electricity and gas markets A2 Promoting the adequacy of supply and containing the market power in the hands of dominant operators A3 Promoting the setting up of transnational electricity and gas markets A4 Guaranteeing transparent and non-discriminatory access to the regulated infrastructures B) Supporting and promoting the efficiency and affordability of infrastructural services B1 Promoting the adequacy, efficiency and security of infrastructures B2 Guaranteeing the affordability of network services B3 Promoting the efficiency of metering activities

11 C) Protecting energy service clients C1 Managing the complete opening up of the markets from the demand side C2 Guaranteeing universal service and protecting specific client categories C3 Improving service quality levels D) Promoting the rational use of energy and contribute to environmental protection D1 Supporting and disseminating energy efficiency for end use D2 Contributing to sustainable development choices E) Guaranteeing the implementation of regulatory discipline E1 Overseeing the correct application of legislation by regulated subjects E2 Ensuring the implementation of regulatory discipline Three Year Plan (3/4)

12 F) Fostering dialogue with other system actors F1 Developing relationships with institutional subjects F2 Underpinning tools for consultation and dialogue with operators and consumers F3 Strengthening Regulatory Impact Analysis (RIA) F4 Bolstering communication and relationships with the mass media G) Increasing the Authority’s functional and operational efficiency G1 Supporting the development of human resources G2 Improving organisational and financial efficiency. Three Year Plan (4/4)

13 International Commitment CEER/ERGEG Regional Initiatives (Central South ERI, South South- East GRI) SEE/ ECRB MEDREG Twinning Projects (Lithuania,Czech,Turkey,Ukraine) FSR IERN

14 Third EU energy package NRAs’ harmonization towards adequate levels of power, independence, autonomy, accountability. EU Agency of Energy regulators, based on coherent characteristics such as independence, power, accountability.

15 Setting up: 4 December 1996 Operations start: 23 April 1997 Headquarter:Milan Subsidiary office:Rome Staff: currently 134 (max allowed: 180 of which 120 permanent contract) Expenditure in 2007: 38.7 million € Italian Regulator: facts and figures

16 Organisation: current structure