PRESS REALEASE

ELECTRICITY MARKET:  ANTITRUST AUTHORITY LAUNCHES TWO SEPARATE INVESTIGATIONS INTO ANTI-COMPETITIVE CONDUCT BY MAJOR COMPANIES IN THE SICILY MACRO-AREA

Two separate investigations have been launched. The first shall determine whether Enel and Enel Produzione abused their dominant position. The second shall assess whether an agreement restricting competition was set up by Edipower and its members - A2A trading, Edison trading, Iride mercato and Alpiq Energia Italia – and their respective holding companies. Both cases of alleged competitive misconduct involved withholding productive capacity in order to maintain high prices for energy sold on the Electricity Market in Sicily, to the detriment of final consumers

On January 27th, 2010, the Autorità Garante della Concorrenza e del Mercato decided to launch two separate investigations to determine whether the largest electricity producers for the Sicily macro-area have been engaging in anti-competitive behavior in the wholesale markets. According to the Antitrust Authority, the unusual fluctuations witnessed in energy prices of the Sicily macro-zone could be traceable to an abuse of dominant position by Enel and Enel Produzione and an internal agreement among the 'toller' members of Edipower (A2A trading, Edison trading, Iride mercato and Alpiq energia italia, which hold contracts for providing fuel to Edipower in exchange for energy produced) and their parent companies. The two proceedings were launched in response to a notification received from the Autorità per l’Energia Elettrica ed il Gas (AEEG - Italian Regulatory Authority for Electricity and Gas) concerning various anomalous behaviors detected in the electric energy wholesale markets of the Sicily macro-zone. These anomalies might not be explicable by structural factors alone, and could very well be attributable to the main operators in the Sicilian wholesale market and their strategic maneuvering to increase prices in the Sicilian zone.
On the basis of the Antitrust Authority's initial findings, Enel seems to have withheld productive capacity in order to create supply shortages and set higher prices in the Day-Ahead Market, to the detriment of consumers.
According to the Autorità per l’Energia’s (Authority for Electricity) analysis, generating capacity was also withheld by Edipower's 'tollers.' The Antitrust Authority has reason to suspect that collusive activity by Edipower tollers was designed to reduce the quantities being offered on the Day-Ahead Market in order to raise zone-based prices in the Sicilian market. The agreement may have also involved Edipower generator plants throughout the country, encompassing both Northern and Southern macro-zones. The plausibility of collusion among the tollers is further enhanced by the extensive share-capital ties that interconnect them. For instance, 50% of Edison (which owns 50% of Edipower) is owned by EdF and A2A, whereas 25% of Alpiq Holding S.A., which holds a 20% share in Edipower, is owned by EDF, with 5% owned by A2A.

Rome - February 02nd, 2010