Main factors of the pricing framework


The transportation, regasification of LNG, storage and distribution of natural gas are regulated by the Electricity and Gas Authority, which has been operative since 1997, and is responsible for the regulation of the national electricity and natural gas markets. Among its functions are the calculation and updating of the tariffs, and the provision of rules for access to infrastructures and for the delivery of the relative services. The following are the primary tariff components for each of the regulated activities carried out by Snam, based on the regulatory framework in force as at 31 December 2011.

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End of regulatory

• 31 December 2013

• 30 September 2012

• 31 December 2014

• 31 December 2012

Calculation of net
invested capital

recognised for regulatory
purposes (RAB)

• Revalued historical cost

• Revalued historical cost

• Revalued historical cost

• Deduction of restoration
costs recognised

• Revalued historical cost

• Parametric method for centralised assets

Return on net invested
capital recognised
for regulatory purposes
(pre-tax WACC)

• 6.4% (transportation)

• 6.9% (metering)

• 7.6%

• 6.7%

• 7.6% (distribution)

• 8% (metering)

Incentives on new

• 1% over 5 years
(on safety investments)

• 2% over 7/10 years
(on capacity upgrade

• 3% over 10/15 years
(on entry capacity
upgrade investments)

• 2% over 8 years
(on expanding existing
terminals by less
than 30%)

• 3% over 16 years
(on expanding existing
terminals by more
than 30%)

• 4% over 8 years
(on upgrading
existing capacity)

• 4% over 16 years
(on developing new
storage fields)

• 2% over 8 years
(on replacing cast-iron
pipes and renovating
odorisation systems)

Efficiency factor

• 2.1% on operating costs

• 0.5% on operating costs

• 0.6% on operating costs

• 3.2% on distribution
operating costs

• 3.6% on metering
operating costs

Gas demand

• 15% of revenues exposed
to change in demand

• 10% of revenues exposed
to change in demand

• No exposure to change
in demand

• No exposure to change
in demand

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Snam’s presence in the territory

Infrastructure as
at 31 December 2011

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