Resolution ARG/gas 159/08 - “Consolidated act on the regulation of the quality and tariffs for natural gas metering and distribution services for the 2009-2012 regulatory period (TUDG): approval of part II, Tariff regulation for gas distribution and metering services for the 2009-2012 regulatory period (RTDG). Temporary measures for 2009”.
With this resolution, published on 17 November 2008 (and subsequent amendments), the Authority defined the tariff criteria for the distribution and metering services for the third regulatory period, from 1 January 2009 to 31 December 2012. In summary, the resolution provides for:
- Recognition of the net capital invested for the site by the adjusted historical cost method and of the net capital invested with respect to centralised operations (non-industrial buildings and other fixed assets) by the parametric method;
- Recognition of the operating costs of distribution operations on a parametric basis and differentiated depending on company size and density of the customers connected to the network;
- Recognition of the operating costs of metering and sales operations using equal parametric components for all companies;
- Assessment, at standard cost, starting in 2011, of all investments on the basis of a price list defined by the Authority (Modern Equivalent Asset Value (MEAV) method, based on the concept of new replacement cost);
- Calculation by the Authority of the reference tariffs for each company, corresponding to the costs recognised for remunerating net invested capital, amortisation and depreciation, and operating costs;
- Subdivision of the national territory into six tariff areas and calculation by the Authority of the respective mandatory tariffs that distributors must apply to users of their own networks;
- Introduction of an equalisation mechanism, managed by the Authority through the Cassa Conguaglio Settore Elettrico (Electricity Equalisation fund), to guarantee equivalence between the revenue obtained by each company by application of the mandatory tariff, which, naturally, does not reflect the specific costs of each company, and the costs recognised for such company, using the reference tariff.
The return rate (WACC) of net capital invested (RAB) is set at a real rate of 7.6% before taxes for the distribution service and at 8% in real terms before taxes for the metering service.
For the new investments relating to the modernisation of the odorisation system in the REMI cabins and the replacement of the cast-iron pipes with hemp and lead sealed joints, commissioned following 31 December 2008, a greater return of 2% over the base rate (WACC) was recognised for a period of eight years.
The method for updating the price cap tariffs is applied to revenue relating to operating costs, which are indexed to inflation and reduced by a fixed annual productivity return coefficient set at 3.2% for operating costs relating to distribution and 3.6% for operating costs relating to metering.
The revenue components which are related to returns and amortisation and depreciation are determined on the basis of the annual update of net capital invested (RAB). In particular, in the third regulatory period, the amortisation and depreciation is deducted from the price-cap mechanism and calculated on the basis of the useful economic and technical life of the distribution infrastructure which is 50 years.
Resolution ARG/gas 235/10 – “Updating of mandatory tariffs for 2011 for providing natural gas distribution and metering services and tariff options for gas distribution and metering service other than natural gas by channelled networks. Start-up of the procedure for re-exercising the power of tariff regulation pursuant to the orders of the Regional Administrative Court of Lombardy, Sect. III, 11 October 2010, Nos. 6912, 6914, 6915 and 6916. Provisions on tariff options for gas distribution and metering service other than natural gas by channelled networks for 2010”.
With this resolution, published on 16 December 2010, the Authority approved the mandatory tariffs for 2011 and initiated a procedure to adopt modifications to the regulation in force on the subject of calculating tariffs for providing natural gas distribution and metering services and other gases in order to comply with the orders of the Regional Administrative Court of Lombardy which partially grant the appeals brought by several operators against the Consolidated Act for the regulation of gas distribution and metering tariffs for the 2009-2012 period, approved by Resolution ARG/gas 159/08 and subsequent amendments and modifications.
The Authority therefore started a procedure to assess the required modifications to the tariff regulation in force and, in the interim while the procedure is carried out, it has suspended calculation of the reference tariffs for 2011.
The final approval of the reference tariffs for 2009 and 2010 was deferred to a subsequent order.
Lastly, the resolution provides for a one year postponement, starting in 2012, of the introduction of the MEAV method for assessing the standard costs of investments for tariff purposes, pending definition of the pertinent price list by the Authority.
Resolution ARG/gas 119/11 – “Compliance with the decisions of the Council of the State no. 2242/07 and no. 2243/07 of 10 May 2007 and of the Lombardy Regional Administrative Court no. 3517/09 and no. 3518/09 of 23 April 2009 regarding the calculation of the constraint on revenues from natural gas distribution for the companies Napoletanagas S.p.A. and Toscana Energia S.p.A. for the thermal years from 2004-2005 to 2007-2008 and closure of the process under Electricity and Gas Authority Resolution 171/05 of 2 August 2005 implemented on the application of the company Italgas S.p.A. for the thermal year 2005-2006”.
With this resolution, published on 13 September 2011, the Authority recognised, on the closure of the process under Authority Resolution 171/05, as subsequently amended and updated by Resolution 44/07, implemented on the application of the company Italgas S.p.A., the adjustment of the distribution revenues for the thermal years between 2005-2006 and 2007-2008 by a total amount of €26.5 million. With the same decision, in accordance with the Council of State’s decisions 2242/07 and 2243/07 of 10 May 2007 and of the Regional Administrative Court of Lombardy’s decisions 3517/09 and 3518/09 of 23 April 2009, the Authority granted an adjustment to distribution revenues to the companies Toscana Energia S.p.A. and Napoletanagas S.p.A., for the 2004-2005 to 2007-2008 thermal years, restricted to the Management Component (MC) of the Distribution Revenue Limit (DRL), respectively quantified at €5.4 million and €5.6 million. Lastly, the Authority commissioned the Cassa Conguaglio Settore Elettrico (Electricity Equalisation Fund) to liquidate the amounts relating to the applications presented by the three companies through the gas distribution tariff equalisation account provided for in Article 93 of Appendix A of Resolution ARG/gas 159/08.
Resolution ARG/gas 195/11 – “Updating of mandatory tariffs for 2012 for providing natural gas distribution and metering services and tariff options for gas distribution and metering service other than natural gas by channelled networks”.
With this resolution, published on 30 December 2011, the Authority approved the mandatory tariffs for the year 2012 suspending the calculation of the reference tariffs for 2012, in anticipation of the process for evaluating the amendments due to the tariff regulation in force implemented by Resolution ARG/gas 235/10.
Lastly, the resolution provides for a one year postponement, starting in 2013, of the introduction of the MEAV method for assessing the standard costs of investments for tariff purposes, pending definition of the pertinent price list by the Authority.