ENERGY INFRASTRUCTURE

With Resolution 50/2018/R/eel of 1 February 2018, the Authority approved a mechanism for recognising charges otherwise not recoverable due to the failure to collect general system charges.
At 31 December 2021 the total receivables accrued by the Company amounted to € 69 million, including billed interest. Such interest was excluded from the mechanism for the reinstatement of general charges by Resolution 300/2019/R/eel and subsequently readmitted to the mechanism by Resolution 495/2019/R/eel.
With Circular no. 2/2020/elt of 30 January 2020, CSEA prepared a method for adding the applications already submitted in order to include the portion relating to interest on arrears invoiced in accordance with the initial provisions of art. 1.4, letter a), number iv) of Resolution 50/2018//R/eel. On 18 February 2020, a formal request to participate in the mechanism for reimbursing the default interest billed was formally submitted and the amount requested was received equal to € 2.9 million on 30 March 2020.
On 27 December 2019 Resolution 568/2019/R/eel was also issued, which provides for the reimbursement of amounts due not otherwise recoverable relative to network services equivalent to the model for the recognition of uncollected general system charges.
This mechanism was confirmed with Resolution 461/2020/R/eel published on 19/11/2020, which better defined the methods for access to the reimbursement request. This Resolution included recognition of tariff fees for electricity metering, distribution and transmission services, the UC3 and UC6 tariff components and certain fees for specific services, regarding invoices expired by at least 12 months, net of a 10% deductible.
The Authority set date of 30 June 2021 as the limit for presentation of applications for admission to the mechanism, nevertheless offering DSOs the option, to request a 50% advance of the reimbursement amount due with requests to be sent by 7 December 2020 and payment by 31 December 2020. Areti SpA therefore decided to take advantage of this option, sending a request for participation on 4 December 2020. The total amount for network services for Gala for network tariffs uncollected is approximately € 11.0 million, while the amount paid by CSEA with value date 30 December 2020 as payment of balance was € 5.4 million. On 30 June 2021, the request was completed to settle the shortfall due to the non-collection of the network services tariffs; as established by art. 2.5 of Resolution 461/2020/R/eel, the CSEA, having approved the application for admission sent by areti, recognised with value date of 28 September 2021, the amount of € 5.1 million as the balance of the uncollected Gala network tariffs.
In July 2021, the additional 2021 request regarding the reinstatement of the general system charges was also submitted to CSEA, as provided for in CSEA Circular no. 13/2021/elt. As a result of the collection received from Gala in June 2021, following the Court of Rome ruling no. 8096/2021, areti has taken steps to make the calculations for the restitution of the general system charges collected in the previous requests. These calculations resulted in the amount to be repaid to CSEA, equal to approximately € 3.2 million, being paid at the end of October 2021.

Currently, also taking into account the changes in the regulatory framework deriving from the approval of the mechanism for reimbursing general expenses accrued over time, the reduction in the value of the Areti receivable from Gala was prudentially determined.

From the regulatory perspective, with the aforementioned Resolution no. 32/2021/R/eel of 2 February 2021 published on 5 February 2021, ARERA made provisions related to the mechanism for recognising, in favour of sellers, the general system charges not collected from end customers and already paid to the distribution companies, with the strategic aim of improving the risk management tools through the implementation of measures intended, on the one hand, to guarantee the system and end customers with respect to the economic consequences of possible sales operator default and, on the other, to ensure the solidity and reliability of the processes involving them, keeping their exposure under control and contained with evolution of the minimum guarantee systems and the recovery mechanisms for unpaid payments of sellers with particular reference to the portions related to general system charges in the electricity sector.
The measure, which concluded the procedure to comply with the rulings of the aforementioned administrative courts, follows the guidelines expressed in the consultation document no. 445/2020/R/eel and establishes a mechanism for recognising, in favour of sellers, the general system charges not collected from defaulting end customers and in any case already paid by the sellers to the distribution companies, by providing for their payment by the CSEA. Furthermore, the measure supplemented the rules on guarantees in the transport contracts, regarding their sizing with reference to general system charges.
The Mechanism covers the period between 2016 (entry into force of the Standard Network Code) and any adoption of specific measures, including legislation, aimed at a different management of the collection chain of general system charges and the related system of guarantees.
Parties that benefit from it are therefore users of the transport system provided by the distribution companies, holders of existing or terminated transport contracts which, as sellers, are the only contractual counterparty with the obligation to pay general system charges to the distribution companies (pursuant to art. 3, paragraph 11 of Italian Legislative Decree 79/99).
At the same time, the measure continues to require that the distribution companies have the right to request (and the sellers, users of the transport service, must provide): (a) suitable guarantee of payment of the entire fee for the service, including the part related to general system charges, albeit at a conveniently reduced amount so that it represents the best estimate of the amounts normally collected by the sellers from their end customers; (b) payment of the total amount of the fee invoiced and therefore also any portion of the part related to any general system charges not (yet) collected, now without prejudice to the benefit of the reimbursement mechanism envisaged by Resolution 32/2021.

Resolution 32/2021 therefore confirmed: 

• the obligation, arising from primary legislation, for the seller to pay in full the system charges invoiced by the distributor, which in turn has the obligation to repay them in full to GSE and CSEA; 
• the right of the seller, limited to the charges not collected from end customers but paid to the distributor, to access the offsetting mechanism set out by Resolution no. 32/2021; 
• the regulatory framework previously envisaged with Resolution 109/2017, including the obligation for the seller to provide the guarantee in favour of the distributor, according to the parameters indicated herein related to the best estimate of the amounts normally collected from end customers; 
• recognition of the right of the distributor to govern contractually with the seller a suitable guarantee clause for compliance with the seller’s obligations; 
• recognition of the right to access the offsetting mechanism in favour of the seller as of 2016, including in the case of a contract terminated by the distributor due to non-compliance (of said seller); 
• the obligation of the seller to collect system charges from the end users and, with the professional due diligence pursuant to art. 1176 of the Italian Civil Code, to recover arrears from end 98 customers, being the only party designated to interact with the latter, in fact and in law.

Finally, it is noted that, with notice sent to Areti as a counterparty on 2 April 2021, Gala SpA filed an appeal before the Council of State in order to: (i) ascertain and penalise the alleged non-compliance with rulings of the Council of State nos. 5619/2017 and 5620/2017 of 30 November 2017 and, at the same time, (ii) partially annul Resolution 32/2021/R/eel of 2 February 2021 (on the reimbursement of traders in case of failure to collect the GSCs) due to circumvention of the aforesaid ruling. In summary, Gala considers that the aforesaid rulings of the Council of State – which, by partially annulling the network code, confirmed that system charges apply to end customers (as parties obligated to pay them) and reiterated the absence of the power of the Authority to transfer onto the Traders the obligation to pay the system charges (as deriving from the imposition of guarantees to cover said charges, in addition to the right of the distributors to terminate the contract with the Traders in the event of failure to pay said system charges) — have not been adequately met by ARERA with the subsequent administrative measures issued, the last of which is Resolution no. 32 mentioned, which reiterates the technicalities already omitted, thus breaching the aforesaid rulings.
Given the unusual procedural motion — Resolution no. 32/2021 was not appealed by Gala before the Regional Administrative Court before the deadline and the part appealed before the Council of State was not indicative of new elements with respect to the previous resolutions on the matter — a rejection due to lack of grounds is foreseeable; nevertheless, the intention of Gala could be to obtain the obiter dicta for use in the pending civil cases.
On 1 July 2021 a hearing in closed session was held, after which the Council of State, with an enquiry order, ordered a supplement to the discussions in relation to the parties of the cases defined by the compliant judgements not evoked, namely Green Network SpA, Utilitalia, Aiget - Associazione Italiana di Grossisti e Trader, Esperia SpA and the Bankruptcy Esperia SpA in Liquidation; the Council of State also asked ARERA to clarify the calculation procedure followed for determining the General System Charges normally collected. The case was adjourned to the closed session of 21 December 2021. With an order communicated on 27 December 2021, Gala was put back on time in order to renotify the integration of the cross-examination of Utilitalia; at the same time, the case was referred to Section II for the establishment of the council chamber for discussion of the appeal.
In this regard, it is useful to specify that, from a survey carried out on the portal of the administrative court, three appeals are still pending for the aforesaid Resolution no. 32/2021, one of which (592/2021) filed by the association of traders and resellers “ARTE”. The appeal was entrusted to the same legal expert of Gala and the request addressed to the administrative judge is the same one formulated in the aforementioned compliance proceedings.

2G digital meter project 
In an increasingly advanced technological and energy context, the “2G Digital Meter” project was launched by Areti with the aim of replacing the first-generation electricity meter system with the 2G Smart Metering system in compliance with the requirements of ARERA Resolution 306/2019/R/eel.
Following the selection procedure of the supplier of the field equipment (meters and concentrators) and the related Central Purchasing System (Management Centre) concluded in September 2019 with the publication of the award and subsequent submission to ARERA of the Request for Authorisation to Recognise Investments (RARI), which were followed in 2020 by preliminary activities related among other things to the assessment of the suitable actions to counter the spread of the Covid-19 epidemic, ARERA with resolution no. 293/2020 of 28/7/2020 approved Areti’s PMS2 (commissioning plan of 2G Metering system), as per the latest revision presented on 14 July 2020 and set the date for initiation of Areti’s PMS2 as 1 January 2020, admitting the investments regarding the 2G smart-metering system of Areti to the scheme for specific recognition of capital costs, starting from the same date.
Considering the difficulties linked to Covid-19 and in line with the restrictions and operational limits to contain the spread of the virus, installation continued of the concentrators and 2G meters, launched in the second half of 2020. On 31 December 2021, the number of installations performed was approximately 10,800 concentrators and 374,000 meters, in line with the targets set in the RARI.
To ensure compliance with the new measurement processes and the operation of the new technology (concentrators and electronic meters), a complex evolution of the areti application map was required. In addition to the introduction and integration of a new system for remote management and remote reading of the second-generation field equipment (Beat Suite), it was necessary to make changes to the main applications related to logistics and warehouse processes, field processes (replacement of the concentrator and first generation meter), commercial systems (development and management of the PDFM system), integration systems (middleware) and WFM and mobile systems, in addition to the development of a new metering acquisition, validation and publication system.
In particular, the progress of the development activities of the application map allowed for the release of all the functions planned for the wave date of December 10. Further milestones will follow in the course of 2022 to release integration and optimisation features in addition to what has already been implemented in the new application map.
Since May, the new corporate website was published online containing a large section dedicated to the new 2G digital meter.
The activities dedicated to the refinement of the new operational and managerial reporting continued, as did the adjustment of the existing reporting. At the same time, data are being made available for the analytics systems with a view to monitoring the new processes for measurement and mitigation of risks to the regularity of the metering service.

Areti’s single EData Lake
In 2021, the analysis environment of data for the distribution business was further extended. The calculation infrastructure operates in the Google Cloud environment. Activities run from the definition of a data model to the process of releasing it to an analysis environment, including infrastructure management.

As for data integration, to date the following are available:

• 1G remote management system, both for Landis and GME meters; 
• Company Electric GIS mapping system; 
• Company IP GIS mapping system;
• Integrated Low Voltage Network Survey in all tabular areas; 
• SAP (IS-U and MDM); 
• TESS system (commercial quality); 
• RadarMeteo weather data recorded and forecasts; 
• SAP PM; 
• SAP MM; 
• SAP IS-U PDFM; 
• Remote management system; 
• Remote control system: load profiles at 10 minutes; 
• ORBT history (selection of several tabular areas).

Network diagnostics and monitoring project 
The project is divided into three main lines of action: 

• Primary station diagnostics;
• Substation diagnostics; 
• Overhead line diagnostics.
   

1. Primary station diagnostics with UGV Drones
   The project involves the development of an UGV (Unmanned Ground Vehicle) prototype for autonomous or remotely piloted inspection of primary stations. The Autonomous UGV drone has sensors for detecting environmental parameters (temperature sensors, partial discharges, cameras) and sensors for moving autonomously in the environment (lidar, GPS and cameras). It executes inspection plans independently and can be remotely controlled for targeted security checks and operations. The system may also transmit inspection information to an operator located at a location other than the place of operation.
   In 2021, the construction and testing of the Autonomous drone charging station was completed, where the drone is able to park and charge autonomously at the end of missions. Developments related to the control room and improvements to on-board sensor management resulting from the initial experiment are being released.
    
2. Substation diagnostics (CS-Plus)
   The project involves testing an integrated IoT solution for remote monitoring, diagnostics and management services: e.g., environmental parameters, digital access management, etc.
   In 2021, developments were completed for the two PoCs aimed at testing an access control solution for the Substation and Roadside Cabinet. Field experimentation was also completed with the installation on four Secondary Cabins of the IoT solution with services for 1. access control, 2. ambient temperature, 3. transformer temperature, 4. humidity, 5. Flooding.
    
3. Overhead line diagnostics
   The project involves the combination of periodic analyses of satellite images using artificial intelligence algorithms (developed to detect man-made and/or vegetation interference) and targeted inspections with drones to enable a continuous monitoring of overhead lines.
   During 2020, the platform for management of the process was developed and went live and operation of the process itself was launched. The process was found to be highly innovative both by the Politecnico di Milano university Drone observatory and Space Economy observatory. In 2021, installation of the system continued, as did optimisation of the platform’s features. The GIMMI project was also presented by Areti to the final conference of the Drone Observatory at the Utility table alongside Eni and Enel. Field inspections performed in conjunction with the HV and MV Asset Management units are currently underway.

Development of Areti telecommunications network 
The TLC project involves the creation during 2020-2021 of a highspeed and high-reliability fibre-optic network that will link all primary stations, which constitute the main backbone of the telecommunications network and from which all smart-grid services will be launched, and the linking of around 150 substations via fibre optic.
This network will ensure security and reliability in the transmission of information between the centre and the periphery useful to allow the proper operation of Operation Technology systems and network management systems, also the remote control of equipment installed in substations and, where possible, the metering points and other types of sensors in order to convey to the central systems all the information acquired through sensors and field equipment. This network will also allow implementation of advanced automation for substations linked by fibre optic, in order to significantly improve the quality of the electricity service.
Over a three-year period, all primary stations will be linked via fibre optic (owned or IRU) and about a thousand substations will be connected to the main network. This objective will be made possible thanks to the synergy between the optimisation of the electrical grid and the laying of fibre optics, which will substantially reduce the impact on the territory by reducing the inconvenience for the public.

LV and PL remote control
In 2021, the number of secondary substations remotely controlled in LV amounted to 300 and corrective actions have been carried out and new functionalities have been implemented on the SCADA, in order to provide a more stable and complete system for the monitoring of events and measures on the low voltage network.
In particular, the visualisation on the SCADA map of assets and guidelines has been made easier, new reports have been released to identify situations of particular interest and a more effective management of the activities on the network has been guaranteed, thanks to the functionality that allows for the assignment to each Room operator (automatically and/or manually) of the complete supervision of a part of the network. Furthermore, the possibility of simultaneous configuration activities on LV network assets by several operators has been implemented and data on events occurring daily on the distribution network have been made available automatically to external systems.
The new SCADA system for the management of public lighting equipment is currently capable of remotely controlling more than 2,500 installations. This system is also undergoing continuous corrective and evolutionary maintenance to improve its functionality.
Among that with the greatest impact, the management of the automatic reclosure of protection devices in the field has been made available, which will allow for, depending on the event that caused the disruption, restoration of the functionality of the equipment without the intervention of teams on site. Furthermore, in addition to an easier visualisation on the map of assets and guidelines, new reports, the availability of data from external systems and the simultaneous management of configuration activities similar to the LV network, the calendar has been implemented for the suitable management of alarms during the daily switching on and off of public lighting systems.

In 2021, extraordinary maintenance and modernisation and safety activities agreed to with Roma Capitale continued regularly, thus creating new lighting points as part of the lighting re-engineering and development projects. Regarding the Public Lighting Service, following the opinion given by the AGCM (Antitrust Authority) in Bulletin no. 49 of 14 December 2020, Roma Capitale began checking the conditions of congruity and economic convenience of the performance terms pursuant to the service contract between the Administration and Acea SpA (and through it Areti) compared with the terms pursuant to the CONSIP Luce 3 Convention and, in addition, on the basis of the positions expressed by the AGCM in the said opinion, expressed queries over the legitimacy of the award to Acea SpA. On 08.02/2021, Roma Capitale communicated the results of the said checks, affirming definitively “the congruity and convenience of the economic terms currently in being with respect to the qualitative and economic parameters of the CONSIP – LUCE 3 convention” and confirming “the correctness of the prices applied for the public lighting service”, overcoming definitively all reserves on the congruity of the prices charged in the context of the contractual relationship in being between RC and Acea SpA With the same note, which, in any event, does not affect the Administration’s intention to issue a new call for tenders in order to re-tender the service, the Administration therefore ordered the resumption of the procedures for the payment of Acea/areti’s ascertained receivables in relation to the Service Contract. Following this intention, Roma Capitale, in July 2021, undertook to settle the acknowledged receivables.