25. Revenue

The breakdown of revenue for the period, which totalled €3,970 million (€3,882 million in 2014), is shown in the following table:

The reasons for the most significant changes are described in the “Financial review” section of the Directors’ Report.

The Group generates all of its revenue in Italy. An analysis of revenue by business segment can be found in Note 32 – “Information by business segment”.

Core business revenue

Core business revenue, which totalled €3,856 million (€3,784 million in 2014), is analysed in the following table:

Natural gas transportation

Core business revenue (€2,040 million) consisted mainly of fees for the transportation service (€2,035 million), pertaining primarily to Eni S.p.A. (€1,274 million) and Enel Trade S.p.A. (€333 million). Transportation revenue includes the chargeback to users of the costs of connecting the Company’s network to that of other operators (€59 million)⁵¹ . Snam provided its transportation service to 139 companies in 2015.

Liquefied Natural Gas (LNG) regasification

Core business revenue (€18 million) relates to fees for LNG regasification carried out at the Panigaglia (SP) LNG terminal, and mainly concerns Enel Trade S.p.A. (€7 million) and Eni S.p.A. (€1 million). Snam provided its regasification service to four companies in 2015.

Natural gas storage

Core business revenue (€397 million) relates mainly to fees for modulation (€314 million) and strategic (€83 million) storage, and mainly concerns Eni S.p.A. (€60 million) and Enel Trade S.p.A. (€11 million). Snam provided its natural gas storage service to 118 companies in 2015.

Natural gas distribution

Core business revenue (€1,387 million) relates essentially to: (i) fees for natural gas transmission services (€1,027 million); (ii) ancillary and optional services (mostly “Activation”, “Deactivation”, “Suspension and reactivation of the gas supply” and “Moving and removal of meters”) and revenue for Authority incentives connected with the achievement of quality standards (€32 million in total). Core business revenue relates mainly to Eni S.p.A. (€703 million) and Enel Energia S.p.A. (€90 million). During the course of 2015, Snam used its networks to distribute the gas of 260 commercial companies.

Core business revenue from the construction and upgrading of natural gas distribution infrastructure linked to concession agreements under IFRIC 12 amounted to €321 million (€316 million in 2014).

Core business revenue is reported net of the following items involving tariff components, in addition to the tariff, applied to cover gas system expenses of a general nature. Amounts received from Snam are paid in full to the Energy and Environmental Services Fund (CSEA).

Additional fees for the transportation service (€791 million) consist primarily of the following fees: (i) CRVOS, introduced by the Authority by means of Resolution ARG/gas 29/11 to cover the expenses mentioned in Article 9 of Legislative Decree 130/10, incurred by the Energy Services Operator (GSE) for paying the amounts due to the storage company relating to the SG guarantee factor (€292 million); (ii) GST and RET, respectively to cover expenses for offsetting tariff breaks for disadvantaged gas sector customers and expenses for energy-saving measures, and interventions and the development of renewable sources in the gas sector (€240 million in total); (iii) CVFG, to cover expenses arising from the application of the guarantee factor for LNG regasification revenue pursuant to Article 18 of Resolution 92/08 (€96 million); (iv) CRVBL, to cover expenses associated with balancing the gas system (€67 million); (v) CRVI, to cover expenses for reducing gas consumption (€67 million); (vi) UG3T introduced by means of Resolution 134/14/R/gas to cover expenses arising from the default service provided to customers who are directly connected to the regional transportation network (€25 million).

Additional fees for the distribution service (€294 million) consist primarily of the following fees: (i) RE, to cover expenses for calculating and implementing energy savings and the development of renewable energy sources in the gas sector; (ii) RS, to cover gas services quality; (iii) UG1, to cover any imbalances in the equalisation system and any adjustments; (iv) UG2, to offset retail sales marketing costs; (v) UG3int, to cover expenses related to interruptions to the service; (vi) UG3ui, to cover expenses related to any imbalances in specific equalisation mechanism balances for the Default Distribution Service Provider, as well as any arrears expenses incurred by Suppliers of Last Resort, exclusively for end customers whose supplies cannot be suspended; (vii) UG3ft, to cover expenses relating to the service for temporary providers on the transportation network; and (viii) GS, to cover the tariff compensation system for economically disadvantaged customers.

Other revenue and income

Other revenue and income, which amounted to €114 million (€98 million in 2014), can be broken down as follows:

Other income (€52 million) refers mainly to income from the sale of natural gas (€27 million) other than for balancing purposes and to refunds from the Authority in relation to the achievement of quality and technical standards and various operating indemnities pertaining to the natural gas distribution service.