CONSENT TO USE OF COOKIES ON INITIAL ACCESS TO THE WEB SITE

Snam uses cookies as part of this site to ensure an excellent browsing experience. This site also uses third-party cookies. The cookies used cannot identify the user. For more information about the cookies used and how to delete them, click here. By continuing to browse this site, you consent to the use of cookies.

to pagetop

Applicable rate framework and principal developments

Tariff regulation in Italy

By means of Resolutions 514/2013/R/gas, 438/2013/R/gas and 531/2014/R/gas, the Energy Grid and Environment Regulatory Authority (ARERA) defined the tariff criteria for the fourth regulatory period, in force from 1 January 2014, for transportation and regasification activities, and from 1 January 2015 for storage activities. Furthermore, with resolutions 575/2017/R/gas, 653/2017/R/gas and 68/2018/R/gas, the Authority defined tariff criteria for the transport and re-gasification sectors respectively for the transitional period 1 January 2018 – 31 December 2019, and 1 January 2019 – 31 December 2019 for the storage sector.

 Download XLS (17 kB)
Fourth regulatory period

Transport

4 years + 2 years (transitory period)

January 2014

December 2019

Regasification

4 years + 2 years (transitory period)

January 2014

December 2019

Storage

4 years + 1 years (transitory period)

January 2015

December 2019

The following graphic shows the main tariff components for each of the regulated activities carried out by Snam, based on the regulatory framework in force as at 31 December 2017.Further information regarding major new rate developments occurred, with respect to each business sector, is provided in the chapter “Business segment operating performance – Tariff regulations” of this Report.

 

Transportation

Regasification

Storage

(*)

The rate of return on net invested capital (WACC) in force from 1 January 2016 was set by the Authority by means of Resolution 583/2015/R/com of 2 December 2015, “Rate of return on invested capital for infrastructural services in the electricity and gas sectors: calculation and updating criteria”. The duration of the WACC regulatory period for infrastructure regulations in the gas sector is set at six years (2016-2021), and a mechanism is provided for updating the rate at mid-period according to the prevailing situation.

 

 

 

 

End of regulatory period (TARIFFS)

Current period:
31 December 2017

Current period:
31 December 2017

Current period:
31 December 2018

Transitional period:
1 January 2018 – 31 December 2019

Transitional period:
1 January 2018 – 31 December 2019

Transitional period:
1 January 2019 – 31 December 2019

Calculation of net invested capital recognised for regulatory purposes (RAB)

Revalued historical cost

Revalued historical cost

Revalued historical cost
Deduction of restoration costs recognised

Return of net invested capital recognised for regulatory purposes

5.4% 2016-18 (*)

6.6% 2016-18 (*)

6.5% 2016-18 (*)

Incentives on new investments

Current period
(investments in 2014-2017):

+1% for 7 years
(regional network development investments)

+1% for 10 years
(national network development investments)

+2% for 10 years
(entry point development investments)

WACC +1% on investments made in 2014-2016 to offset the regulatory time-lag

Transitional period
(investments in 2018-2019):
+1% for 12 years
(investments in new transportation capacity and with positive cost-benefit analysis)

Return on investments t 1 (from 2017 investments) to offset regulatory time-lag

Current period
(investments in 2014-2017):

+2% for 16 years
(new terminals or expanding existing terminal capacity >30%)

WACC +1%
on investments made in 2014-2016 to offset the regulatory time-lag

Transitional period
(investments in 2018-2019):
+1.5% for 12 years (investments in new regasification capacity)

Return on investments t 1 (from 2017 investments) to offset regulatory time-lag

Current and transitional period:

Withholding for 8 years of 20% of revenues in excess of revenue recognised resulting from insolvency procedures
Return on investments t-1 to offset the regulatory time-lag (from 2014)

Efficiency factor
(X FACTOR)

Current period:
2.4% – on operating costs

Current period
and transitional period:
0%

Current period:
1.4% – on operating costs

Transitional period:
1.3% – operating costs

 

Transitional period:
To be defined in P.T. 2019

Regulation in European countries of interest to Snam: main features

The countries of interest where Snam operates through international investments have implemented tariff regimes with distinct reference parameters by context, or negotiated regimes that are, therefore, non-regulated from a tariff standpoint. Snam constantly monitors the regulatory evolution in these contexts.

Materiality (Graphic)

TAG
GCA Transportation
 

  • Differentiated RAB between Revalued Historical Cost and Book Value There is also different treatment of (pre-212) old assets and new investments;
  • There are differentiated return rates for the share of RAB financed through Equity (Cost of Equity(*) 8.92% Actual Pre-Tax) and for the share financed through Debt (Cost of Debt 2.7% Nominal Pre-Tax).

TIGF
Transportation

  • RAB revalued annually using inflation (Consumer Price Index) taking into account new investments and amortisation and depreciation (Current economic cost method);
  • WACC return rate equal to 5.25% Actual Pre-Tax.

Storage

  • Storage under regulated system from January 2018:
  • WACC return rate equal to 5.75% Actual Pre-Tax; RAB around €1.2 billion.

IUK
Transportation

  • Exemption system until October 2018;
  • Shift from an exemption system to a regulated system at the expiry of the long-term contracts (October 2018).

TAP
Transportation

  • Third Part Access exemption on the initial capacity (10 bcm/y);
  • Exemption from tariff regulation on the initial and expansion capacity.

(*) This value includes a premium for the risk related to the marketing of capacity equal to 3.5%.

to pagetop