Article published in Italian on dirittobancario.it on May 17, 2017

Energy Alert

Energy attracts the attention of the bill of law for the market and the competition (in Italian DDL Concorrenza or DDL). The text revised by the Senate has been passed, on 3 May 2017, ONto the Chamber of Deputies for its final approval.

The topics ruled BY the DDL Concorrenza, with reference to energy, concern:

  • Liberalization of the energy market and greater competitiveness of the operators with specific reference to the energy and gas customers which are connected through a low voltage connection and those with annual consumptions not exceeding 200,000 smc (standard cubic meter)
  • Strong reduction of the period in which the rejection or cancellation by the GSE of the White Certificates or Energy Efficiency Certificates (TEEs) may become effective, after their granting by the GSE, if it founds the non-compliance of the proposed project with the rules in force on the date of its submission
  • Protection for the good faith investors that have constructed photovoltaic plants having a capacity from 1 to 3 kW, where the installed modules are found to be non-certified or with certifications that aren't compliant with the law requirements
  • A new regulation of the fuel distribution

Let's analyze such new rules.

With reference to the first part of provisions, the DDL Concorrenza wants to achieve the target that, from 1 July 2019, there will be the conscious transition of the final clients to the market, following the mechanisms that can ensure competition and plurality of the suppliers and the offers in the free market.

Before the transition to the free market, a provisional regime is provided, during which the full comparability of the offers and their public evidence will be ensured. The reduction of the costs of the electricity and gas bills are also provided.

Authority for energy and gas pays a central role. The Authority will implement specific measures to:

  • Introduce the obligation for energy and gas suppliers on the Italian market to provide with a proposal offer of supply on a variable price basis and another one on a fixed price basis for such users, with the indication of the average composition of the energy source utilized for the supply and the quantity of greenhouse gas issued per kWh and to ascertain the minimum information, included the essential clauses of the commercial contract
  • Define the modalities to create a dedicated computer portal for the collection and open data publication of the bids existing on the retail electricity and gas market and the setting up of an advisory technical committee (consisting of 6 representatives, one of the the Authority, one of the MSE, one of the competition and market authorization Authority, one designated by agreement among the most representative organizations of non-domestic consumers, one by agreement among the market operators and one of the national Council of consumers and users) with the role of linking and collecting emerging instances of different stakeholders on the contents of the portal
  • Adopt guidelines to promote the comparability of the commercial offers of energy and gas in favor of purchase groups and the realization of informatics platforms to facilitate the aggregation of the small consumers

The Authority will also have to submit to the MSE a report on the monitoring of retail electricity and gas markets, verifying operation of the information portal, compliance with the switching and billing timing, and the adjusting and implementing of the brand unbundling and the protection of families in economic disadvantages.

In addition, a List of electricity entities licensed to the sale of energy to final customers will be set up and the obligation of installments payment with the right to interest only in the case of large amounts of invoices.

An important news is also the automatic introduction of the "close-out netting" clause (id est the automatic interruption clause with the obligation to compensate for each other's positions). This is a clause that should help increase the liquidity of energy markets, reducing transaction costs for the benefit of consumers.

However, it is necessary to wait for the approval of the implementation discipline by the Authority and the MSE.

Regarding the sanctions regime applicable to energy efficiency, paragraph 90 of the DDL Concorrenza has established power of the GSE to provide with the rejection of the disclosure or the annulment of the securities recognition measure in the event that "GSE finds the non-compliance of the project proposed and approved with the law in force at the date of submission of the project and such differences do not arise from any discrepancies between what is transmitted by the proposer and the actual situation of the intervention or from untrue documents or false or misleading statements made by proposer." In this particular case, the "non-compliance of the project proposed and approved with the law in force at the date of submission of the project", the DDL Concorrenza restricts the period of effectiveness of the rejection of the reporting or cancellation of the decision to issue the TEE. The rejection can only be made from the date of commencement of the reporting period subject to the request for verification and certification of the savings. The annulment of the TEE's recognition by the GSE at the end of the verification procedure may, however, only concern the period after the outcome of the verification. Notwithstanding the already approved accounts or the completed studies have been done.

The DDL Concorrenza has introduced a specific penalty for small-size photovoltaic plants that have been built with non-certified or certified non-compliant modules. The penalty provides for the 30% reduction of the incentive tariff and the cancellation of the increase for European origin. Although the stated objective is to safeguard the good faith of those who have invested, this sanction applies only to small photovoltaic plants of up to 3 kW.

Regarding fuel distribution, the DDL Concorrenza at paragraph 99 reaffirms the principle of liberalization for the exercise of distributors, which, as stated by art. 83 bis, paragraph 17, of the Law Decree no. 112/2008, cannot be subject to conditions (such as the cessation of existing plants), nor to commercial constraints (numerical contingencies, distances or minimum areas).

The news concerns the obligation of the so-called "third product" to be complemented by petrol and diesel. In fact, is demanded to a decree of the MiSE, to be adopted within 6 months from the entry into force of the measure, the task of identifying when the obligation imposed by operators to provide the presence of several types of fuels (including methane by road) involves technical obstacles or excessive and non-proportional burdens such as to render the constraint not applicable. A compromise solution is thus reached with respect to the previously envisaged ban to introduce eco-compatible fuel distribution requirements for new plants, which does not consider, however, the need, warned at European level and supported by the Regions, to pursue low environmental impact policies.

Innovations have then been introduced with a view to rationalize the distribution network. To this end, a register of the road plant of fuel distribution is set up at the MiSE, to expand the relevant ministry database and feed it with data transmitted by the Customs Agency (first applied within 1 September 2017 and, subsequently, within 30 June of each year). To this mechanism, introduced in order to increase the competitiveness of the fuel market and to facilitate the consumer's knowledge of this information, may access the same Agency, the Regions, the administration responsible for issuing the authorization or concession, as well as the GPL Equalization Fund.

At the time of the introduction of the aforementioned register, which are required to register within 6 months from the entry into force of the DDL all the holders of the license for the installation and operation of fuel distribution plants (including those in suspension), is provided the obligation to declare to the MiSE, to the Customs Agency and to the relevant Region and Municipality if the plant is in one of the situations of incompatibility with regard to road safety, as in details provided for in paragraphs 113 and 114. If so, Such plants shall be adjusted within 12 months from the entry into force of the DDL, subject to the cessation of the activity, with the simultaneous obligation to dismantle the plant, as well as the cessation of the authorization or concession or of the operating license.

The omission of such self-certification implies the imposition of penalties up to a maximum of 7,000 euros per month of delay, the proceeds of which will enter into the Fund for the rationalization of the fuel distribution network until 31 December 2017 and, after that date, in the state budget.

The ownership of this Fund is transferred to the Acquirente Unico S.p.A. through the OCSIT (Italian Central Storage Organization), as a result of the assignment to it of the competences of the Cassa conguaglio GPL, which was abolished on January 1, 2018.

Finally, the procedures for ceasing the plants that have stopped operations are regulated, in such a way as to prevent the onset of dangers for environmental and sanitary safety.