Regulation in Italy

Tariff regulation is an essential element capable of developing the infrastructure capital from an economic perspective, necessary to direct investments to the network. To date, the 96% of Snam revenues are from regulated activities.

Snam interacts actively with the Italian Regulatory Authority for Energy, Networks and the Environment (ARERA) as follows:

• responding, directly or through trade associations, to public consultations that the Authority holds in relation to the various activities of the industry, in preparation to define new standards or to review the standards in force;
• participating to the technical round tables established by the Authority, regarding the development of the regulatory framework;
• drafting amendments to the Transportation, Storage, and Regasification Network Codes, subsequently submitted to the Authority for approval;
• participating to the collection of data and to the investigations carried out during the year to assess the state of the industry or of the individual services and to periodically send the data requested in compliance with the reporting obligations.

In 2019, Snam contributed to the development of the regulatory system by providing the Authority with several contributions and proposals. Specifically, the activity involved the definition of tariff criteria and the quality of the transportation, storage and regasification services for the fifth regulatory period, both as part of the public consultation processes and through specific meetings. In this context, given Snam’s role in the country’s journey to decarbonisation, the innovative use of the transportation network and technologies for the integration of renewable gases (such as, for example, biomethane and hydrogen) were being closely examined. From a perspective of the development of the regulatory system with arrangements that introduce cost/benefit analyses (output based), Snam has developed a cost/benefit analysis methodology, through a process open to the participation of all the stakeholders involved, for new investments in transportation infrastructure, later approved by the Regulator. A monitoring report was also prepared for the Authority on the status of the existing infrastructures in order to consider appropriate incentivisation mechanisms for keeping fully depreciated assets in operation. In 2019, the inclusion of the new gas settlement framework, in force from January 2020, was also completed.

Regarding the services offered, new storage products and new market-based regasification capacity allocation methods for LNG terminals have been introduced aiming at meeting and supporting the ever increasing needs for flexibility for infrastructure users. Lastly, Snam contributed to the total redesign of the settlement arrangements to promote a better allocation of the quantities of energy withdrawn from the network by its customers.