1 The Regulatory Authority for electricity and gas: an overview of the legislation The Regulatory Authority for electricity and gas: an overview of the legislation 4 th of March 2010

Why an Independent Regulator? Law 30 th of July 1994, No. 474: Transformation of the public monopolists operating in the gas and electricity markets (Eni and Enel) into private companies (problems with EU aid rules) The shares of the new created private companies are hold by the Government and cannot be sold until an Independent Regulator is set Need to avoid the risk of conflict of interests within the Government and to ensure the stability of the framework of energy regulation 2

3 What targets need to be pursued? Law 14 th of November 1995, No. 481 has set up AEEG in order to: to protect the interests of users and consumers. to promote competition and ensure efficient, cost- effective and profitable nationwide services with satisfactory quality levels. to define and maintain a reliable and transparent tariff system to reconcile the economic goals of operators with general social objectives, and to promote environmental protection and the efficient use of resources.

What powers is AEEG entitled with? According to Law No. 481/1995 and the Legislative Decrees on electricity and gas (16th of March 1999, No. 79 and 23rd of May 2000, No. 164): Powers to regulate the energy markets (general addressees) –Tariffs for transmission, distribution, balancing… –Market rules and grid codes –Quality of service –Unbundling Powers to monitor and fine infringements for not-compliance of regulatory acts (individual addressees) Power to settle diputes between producers of electricity and transmission or distribution system operators on access to the network. 4

How does AEEG exercise its powers? Transparency –Everyone holding a “legally relevant interest” has the right to access to all the acts adopted or available at the N.R.A., with some specific exceptions Participation of interested parties –Periodical hearings of costumers to discuss the perceived quality of services –right of defence in individual procedures (decree of the President of State no. 244 of 2001) –consultation of interested parties in regulatory procedures Analysis of regulatory impact (A.i.r.)

6 (1) Which additional powers have been given to AEEG so far? Law 27 th of October 2003, No. 290 (known as “anti-black-out” decree), containing “urgent provisions for the security of national electrical system”  AEEG defines efficiency standards for power plants and fines any infringement. Legislative Decree 29 th of Dicembre 2003, No. 387 on the promotion of use of energy from renewable sources  gives AEEG the task of promoting renewable energies

7 (2) Which additional powers have been given to AEEG so far? Law 18 th of June 2007, No. 73: gives AEEG the power of -regulating functional unbundling -setting benchmark prices for the supply of electricity and gas -ensuring further protection to small consumers; setting information obligations in order to promote transparency and to overcome informative asymmetries.

(3) Which additional powers have been given to AEEG so far? Law 6 th of August 2008, n. 133: gives AEEG a new function in oil and hydrocarbon sector (which was not included in Law 481): the power to control how companies implement the “Robin Hood Tax” in order to prevent them from translating the additional tax on consumers. 8

(4) Which additional powers have been given to AEEG so far? Law 23rd of July 2009, No. 99 on energy:  compatibility between liberalization of upstream and downstream activities and regulation 9