PRESS RELEASE

ENERGY: ANTITRUST TO GOVERNMENT AND PARLIAMENT - IMPLEMENTATION DECREE FOR EUROPEAN DIRECTIVE III WILL OBSTRUCT COMPETITION UNLESS CHANGED

Strengthen independence of transmission system Operator and keep infrastructure implementation plans free of discriminatory consequences. Greater clarity in the regulations on changing suppliers. 'No' to extensions of protection regime boundaries.

Review various aspects of the draft legislative decree on implementation of the "third package" of Community directives in the electric power and natural gas sectors and the prevention of barriers to competition through liberalization. The Antitrust Authority submitted these recommendations in a report to Government and Parliament.

The Antitrust Authority, which also recommends the drafting of a consolidated law on the subject, has pinpointed six key points where intervention is needed:

1) The Government procedures used to identify the infrastructures that are most consistent with the national energy strategy.

The Authority finds the current version of the decree to manifest potentially discriminatory effects between company projects still being designed and those already being implemented. The Government's status as the controlling shareholder of the two incumbents, Eni and Enel, only heightens the problem. Rather than specifying the minimum individual installations and infrastructures for achieving its goals during initial application of the law, the Executive should instead limit itself to notifying the market of the minimum requirements for different installations and infrastructure types, subdividing them into large geographic zones and specifying preferred time frames.

2) The rules for supervisory Authority members in the context of the "independent transmission system Operator" model.

The Antitrust Authority recommends augmenting the independence of the Supervisory Authority even further in order to promote subjects who are as independent as possible from Eni, the vertically-integrated undertaking. The minimum recommended intervention calls for at least two members of the "half plus one" Supervisory Authority components (not subject to Energy and Gas Authority review) to meet impartiality requirements, which the current version of the decree only applies to "half minus one" members (subject to Energy and Gas Authority review).

3) The activities regulated by the vertically integrated undertaking should remain directly owned and controlled by the independent transmission system Operator.

According to the Authority, a specific measure is needed to return storage, regasification and gas distribution activities (which are currently under the direct control and ownership of Snam Rete Gas, the largest transmission system operator) back to direct ownership and control by Eni, the vertically integrated undertaking. Not long ago, the Antitrust Authority confronted even worse problems attributable to access discrimination and insufficient investing in infrastructure.

4) Antitrust competence.

According to the current version of the draft decree, the Antitrust Authority is scheduled to conduct a fact-finding study of the gas network separation model five years after the new regulations enter into effect. According to the "third package" Directives of the European Commission, a similar review is required by 03^rd March 2013. The Antitrust Authority has asked for the national and Community review schedules to be synchronized.

5) "Negotiated" conditions for buffer storage access by non-domestic clients.

While calling for buffer storage assignment to domestic clients and small industries (consumers of less than 50,000 cubic meters per year) to be regulated, the draft decree allows for other industrial and power generator clients to negotiate their buffer storage access conditions. Given the quasi-monopoly on

storage capacity (97% by Stogit), however, the Antitrust Authority finds it preferable for access by industrial and power generator demand to be regulated as well, so that economic conditions of access to the storage can be defined by the sector regulator.

6) Measures for retail sales, especially electricity.

The Authority has signaled the need for greater clarity in the regulations that define the procedural phases involved in changing suppliers (already reduced to three weeks in the draft decree, for the better). It also asks for the currently planned protection boundaries not to be extended any further, because they should only be extended in a gradual manner in order to ensure healthy competition in the retail markets. This type of goal cannot be achieved until the market has settled down and is no longer experiencing the types of dysfunctions that trigger protests by consumers and consequent Antitrust interventions to protect them.

Rome, 07^th April 2011