OBSERVATIONS: LIBERIALIZATION OF THE ELECTRICITY MARKET
PRESS RELEASE
The Italian Antitrust Authority has communicated to the parliament its opinions on the draft of the legislative decree intended to promote the liberialization of the Italian electricity market, as per EC Directive 96/92.
The Authority has first formulated some general observations:
1) The concessions should be substituted, wherever possible, with administrative authorizations. In particular, in the electricity sector, as brought out in a recent opinion, concessions should not extend beyond transport and distribution networks.
2) The Authority foresees the risk of over-regulation in the draft of the decree, which would continue also after the market has been liberialized. To this we must add that the regulating activity is mostly placed in the hands of the central administration, ignoring the competences assigned to the Electrical Energy Authority and thus in contrast with what has been established by the "Norms for competition and the regulation of public utilities" Law No. 481/95.
Looking more precisely at the merits of the draft of the decree, as regards the production of electrical energy, the Authority has pointed out that:
- the basis for measuring quota which, starting from 1 January 2003 "no subject can control directly or indirectly", must be productive capacity and not production;
- it would be better if this quota, fixed by the decree at 50%, were reduced;
- as it would also be better to set in place a detailed binding programme establishing procedures that would be used and the times when Enel would be obliged to reduce, within 2003, its energy generation capacity.
As regards transmission, to guarantee that producers are granted non-discriminatory access to the network, the Authority asks that:
- independently of how the transmission networks are owned, it must clarified, respecting Art. 7 of the EC Directive, that all decisions and interventions, relative to the maintenance, management and development of the transmission network are under the sole authority of the managing entity;
- the several activies - as in Art. 13, paragraph 2, of the draft of the decree - are attributed to independent companies and put in place in the market as soon as possible.
As regards the free market, the approach indicated in the draft of the decree of defining the times and ways in which the market will be opened contains a serious limitation and establishes over time one's degree of freedom of choice of supplier of the majority of the demand, in fact, even after 2003, 60% of the consumption of electricity in Italy will in all cases remain bound to a single supplier.
The Authority suggests that the widening of the number of "suitable clients" to include companies which are registered as public companies (in forma societaria), as groups of companies, as consortia and as public consortia (societa' consortili) whose consumption of the previous year exceeded 40 Gwh be made to coincide with the beginning of the liberialisation of the market.
As regards distribution and sales, the Authority - aside from remarking on an excess in the granting of concessions and their length, and on the competences assigned to the Ministry of Industry - wants above all to mention that the sale of electricity to end clients can be competitive, separate from the running of a distribution network. The draft of the decree instead places the two activities together as a single unit. This means excluding, even over the medium-term, the possibility of developing competition in the sale of electrical energy to bound clients and these represent 60% of the market. So the system chosen in the draft of the decree, besides its dubious compatability with the EC directive, guarantees that the liberalization of the final phase of the sale of electrical energy, established in Art. 1 of the draft itself, will be a reality only for the suitable clients.