Extraordinary intervention by Arera to prevent price doubling

8 November 2022


Arera (Authority for Electricity, Networks, and Environment Regulation) intervenes to put a brake on the increase in electricity prices for households still under protection.

“The wholesale prices of gas, which have reached abnormal levels in recent months due to the ongoing war in Ukraine, concerns over pipeline security, and financial tensions, would have led to an increase of approximately 100%, despite the government’s intervention with the Aiuti bis decree,” Arera says. “To further limit price increases for households and businesses, the Authority has decided to exceptionally postpone the necessary recovery of the difference between the forecasted prices for the last quarter and the actual costs, which have also been characterized by extraordinarily high increases.”

“In the third quarter of 2022, the national electricity price (PUN) almost doubled compared to the second quarter of 2022 and nearly quadrupled compared to the average level of the corresponding quarter of 2021. The exceptional intervention by the Authority for the fourth quarter of 2022, combined with government interventions, reduced the increase in the reference price of electricity for the typical household under protection to +59%.”

“This quarterly update pertains solely to electricity. The price of gas for customers still under protection, based on the new calculation method introduced in July, will instead be updated monthly and published in the first days of the following month based on the average of actual prices in the Italian wholesale market.”

“The gas price value paid by customers for October consumption will be published on the arera.it website within 2 working days from the beginning of November. The method, in effect until the end of gas protection for domestic customers (expected in January 2023), for which the Authority has sent a notification to the Government and Parliament requesting an extension of the deadline. In the same notification, a postponement of the end of electricity protection for micro-enterprises and consequently also for domestic customers has been requested.”

“The exceptional nature of the situation, with a conflict causing supply uncertainties and continuing to push prices higher,” says Arera President Stefano Besseghini, “merited an equally exceptional intervention, especially considering that Parliament and the Government are engaged in a transitional phase.”

“According to the provisions of the ‘Aiuti Bis’ decree, Arera also intervened for the fourth quarter on the components of general system charges, zeroing them out for both the electricity and gas sectors for the majority of users and confirming the application of the negative component UG2 for the benefit of gas consumption up to 5,000 smc/year. These interventions, along with the confirmation of the reduced VAT rate of 5% on gas, have a positive impact on 30 million domestic users and over 6 million small businesses, artisans, and traders.”

“With regard to gas, the new update method, while unable to address the exceptional market price levels, aims to secure supplies for consumers. The Authority has also provided precise information on billing mechanisms during October and subsequent months, indicating that the previous month’s price will be used for advance billing.”

“Specific transparency obligations have also been introduced for sellers, who, in the event of price recalculations compared to previously billed amounts, must not only provide appropriate information on the bill (as required by the rules of ‘Bolletta 2.0‘) but also create a dedicated section on their website to explain the reason for the recalculation and the pricing determination method.”

(Note: The Government and the Authority may further intervene considering the extreme price volatility.)

Taken from Green Company Magazine (Volume 8) – see all magazine issues

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