THE ITALIAN REGULATOR FOR ELECTRICITY AND GAS role: from where and the evolution independence, autonomy and accoun

1. The Regulatory Authority for electricity and gas:objectives, tasks, independence, accountability and organisationFabio TamboneHead of Institutional International affairs4th of March 2010

2. THE ITALIAN REGULATOR FOR ELECTRICITY AND GAS • role: from where and the evolution • independence, autonomy and accountability • reporting and dialogue • three year plan • international commitment • third EU energy package • Italian regulator: facts and figures AEEG

3. Independence, autonomy, accountability (1/3) • The Regulator sets • its own organisation • its internal rules and procedures for overalldecision-making based on criteria of transparency • The Government sets • rules and procedures for individual decision-making in order to maximise guarantees

4. Independence, autonomy, accountability (2/3) • Board appointment: • proposal by the Council of Ministers, approval by two-thirds majority of the relevant Parliamentary Committees • mandate 7-year terms not renewable • Financing: • AEEG financed by levy directly from regulated entities which it sets by Law (1/1000 as a maximum of annual revenues, currently fixed at 0,3/1000) • yearly report on financial activities, which audited by Italy’s Court of Accounts • Difference between the Board and the operational structure: • AEEG Board (5 Members) defines, addresses and controls all the activities, while the operational structure is in charge of operative and management tasks

5. Independence, autonomy, accountability (3/3) • Accountability: • appeal procedure: judgment of first instance in front of Administrative Court; as judgment of second instance in front of the Council of State who delivers final decisions • obligation each year to submit an annual report on the activities to the Parliament and to the Prime Minister • ex-post auditing of accounts by Corte dei conti (National Auditing Office) • Transparency: • publication of decisions on AEEG’s website and in the Italian Official Journal • yearly general public hearings • three year Strategic rolling Plan • hearings with stakeholders (companies, consumers, environmentalists, trade unions and business groups) periodically to collect relevant issues and interests and occasionally before major decisions (i.e. tariff reforms) • hearings with Parliamentary Committees (e.g. in case of Parliamentary investigations) to give advice on specific subjects.

6. The framework of accountability in AEEG approval (2/3) of proposal Parliament proposal for appointments President of the Republic Consumers associations &otherstakeholders Government & Ministers advice, proposals and Annual Report Laws and general policy guidelines formal appointments complaints hearings requests for advice Competition infring. Antitrust directives European Commission regulation active participation data and information sentences advice and notice Regulated companies Regional Administrative Court CEER ERGEG appeals appeals State Council Regulatory Authority for Electricity and Gas (AEEG)

7. Reporting and Dialogue (1/2) • Institutions: • Annual Report • Hearings • Recommendations

8. Reporting and Dialogue (2/2) • Other stakeholders • Public Consultation  from 1997 to 2007 have been launched 209 public consultations • Regulatory Impact Analysisin 2007 five RIA were made on: social tariffs, the new regulatory tariff period for electricity service; tariffs for gas distribution; definition of the new load profiling for the electricity service • Three years and annual plans • Hearings, seminars, forum, focus group

9. Three Year Plan (1/4) • National and international scenarios • Strategic objectives  operational objectives

10. Three Year Plan (2/4) • A) Promoting the development of competitive markets • A1 Developing and harmonising the electricity and gas markets • A2 Promoting the adequacy of supply and containing the market power in the hands of dominant operators • A3 Promoting the setting up of transnational electricity and gas markets • A4 Guaranteeing transparent and non-discriminatory access to the regulated infrastructures • B) Supporting and promoting the efficiency and affordability of infrastructural services • B1 Promoting the adequacy, efficiency and security of infrastructures • B2 Guaranteeing the affordability of network services • B3 Promoting the efficiency of metering activities

11. Three Year Plan (3/4) • C) Protecting energy service clients • C1 Managing the complete opening up of the markets from the demand side • C2 Guaranteeing universal service and protecting specific client categories • C3 Improving service quality levels • D) Promoting the rational use of energy and contribute to environmental protection • D1 Supporting and disseminating energy efficiency for end use • D2 Contributing to sustainable development choices • E) Guaranteeing the implementation of regulatory discipline • E1 Overseeing the correct application of legislation by regulated subjects • E2 Ensuring the implementation of regulatory discipline

12. Three Year Plan (4/4) • F) Fostering dialogue with other system actors • F1 Developing relationships with institutional subjects • F2 Underpinning tools for consultation and dialogue with operators and consumers • F3 Strengthening Regulatory Impact Analysis (RIA) • F4 Bolstering communication and relationships with the mass media • G) Increasing the Authority’s functional and operational efficiency • G1 Supporting the development of human resources • G2 Improving organisational and financial efficiency.

13. International Commitment • CEER/ERGEG • Regional Initiatives (Central South ERI, South South- East GRI) • SEE/ ECRB • MEDREG • Twinning Projects (Lithuania,Czech,Turkey,Ukraine) • FSR • IERN

14. Third EU energy package • NRAs’ harmonization towards adequate levels of power, independence, autonomy, accountability. • EU Agency of Energy regulators, based on coherent characteristics such as independence, power, accountability.

15. Italian Regulator: facts and figures • Setting up: 4 December 1996 • Operations start: 23 April 1997 • Headquarter: Milan • Subsidiary office: Rome • Staff: currently 134 (max allowed: 180 of which 120 permanent contract) • Expenditure in 2007: 38.7million €

16. Organisation: current structure