Quality delivered

Areti plans and carries out the modernisation and expansion works on the electricity distribution network, consisting of high (HV), medium (MV) and low (LV) voltage power lines, primary and sec- ondary substations, and systems for the remote control and meas- urement of energy drawn from and fed into the grid. The interven- tions take into account the objectives established by the national authority (ARERA), the progressive evolution of electricity appli- cations, the increase in "prosumers"50, new connections, etc., and aim to make the infrastructures increasingly resilient, with an ad- equate and enabling network configuration for future scenarios, such as widespread electric mobility and progressive electrification of consumptions.

The integrated development of the electricity grids is defined in the Master Plans for the HV, MV and LV networks, which Areti imple- ments through construction - and also decommissioning or dem- olition, and consequent containment of environmental impacts, in specific areas-, transformation, modernisation, maintenance, etc. (see Table 18). The interventions carried out each year are aimed at rationalising and upgrading the networks, increasing transport capacity and margins for further use, increasing their adaptability and reducing network losses and voltage drops, improving service continuity.

In 2021, as part of the implementation of the Resilience Plan51, 122 km of medium voltage cable at 20 kV were upgraded and 98 sec- ondary substation renovations were carried out to increase their resilience to the critical factor of "heat waves", and 36 secondary substation renovations were carried out to increase resilience to the critical factor “flooding”. For the LV networks, 118 km were put in place as part of the overall network modernisation programme, in preparation for the subsequent voltage change from 230 V to 400 V. Remote control was extended to additional secondary sub- stations and reclosers, for a total of 7,582 remote-controlled MV nodes at 31/12/2021.

Table no. 18 – Main interventions for the management and development of electricity grids and substations (2021)

In 2021, Areti carried out interventions to protect the primary and secondary substations, as part of the activities aimed at raising the levels of security for the protection of infrastructures from cyber risks, integrated technological solutions have been implemented to protect field equipment and detect any vulnerability of industrial network protocols. In addition, Quick SIEM and Blue Team ser- vices were strengthened to monitor the network infrastructure and manage incidents, ensuring security oversight in view of the estab- lishment of the Security Operation Center (SOC). Analyses were started to identify additional technological solutions for upgrading the existing technological security system. See also the chapter Institutions and Business for an in-depth analysis of research and innovation and the projects implemented in the year.

Following the launch, in the last quarter of 2020, of the plan to massively replace first-generation (1G) meters with second-gener- ation (2G) ones, which will progressively affect the entire managed territory, in 2021 Areti installed a further 316,176 2G meters; the new meters encourage greater customer awareness of consump- tion, thanks to the data available, and a reduction in estimated bill- ing.

The total number of remote-controlled meters (1G and 2G) in- stalled on low-voltage active users at 31/12/2021 is 1,646,739.

Areti manages, by virtue of the Service Agreement⁵² between Acea SpA and Roma Capitale, works on the functional and artistic-mon- umental public lighting infrastructures, for about 201,200 light- ing points located on a territory covering about 1,300 km2.

The company handles the design, construction, operation, main- tenance and renovation of lighting networks and installations, and plans interventions in accordance with the instructions of the local government departments and supervisory departments, which are responsible for new urban developments, redevelopment projects and cultural heritage.

In addition to the service provided to Roma Capitale, Areti also makes public and artistic lighting services available to other stake- holders (e.g. ecclesiastical bodies, hotels, etc.).

Table no. 19 – Public lighting in Rome in figures (2021)

Energy consumption for public lighting, which has been on a down- ward trend in recent years thanks to the gradual modernisation of the systems with the installation of LED technology lamps, will sta- bilise in 2021; as at 31/12/2021, the 208,870 LED lamps installed cover around 92% of the total number of lamps (see Relations with the environment; The use of materials, energy and water and the Envi- ronmental Accounts).

In 2021, the tender procedure to find a partner for the implemen- tation of the "POLEDRIC" project was concluded. It was launched the previous year, with the aim of developing an innovative techno- logical solution for the creation of a "smart pole", in a “smart city” perspective (see the chapter Institutions and the Company, Commit- ment to Research and Innovation).

The lighting projects carried out during the year include, by way of example, the new lighting of some parks and gardens located in central and suburban areas of the capital, for the benefit and greater safety of citizens, including the park at Tor Sapienza, the Commen- done park and the Villa Massimo park, and among the functional projects the installations in Via della Mortella and Via del Carbonio. (see boxes with more details).

The Regulatory Authority for Energy, Networks and the Environ- ment (ARERA) defines, at a national level, the commercial quality standards (timing of the technical-commercial services requested by customers, such as estimates, work on connections, activation/ deactivation of the supply, response to complaints) and technical quality standards (continuity of supply) of the electricity service; it periodically reviews them, directing operators to constantly im- prove performance.

Commercial quality is divided into "specific" and "general" levels,⁵⁷ for the distributor (differentiated for low and medium voltage supplies) and for those of the seller (see Tables 22, 23 and 24).

Every year Acea communicates to ARERA the results achieved and includes them in the bill it sends to its customers.

The 2021 commercial and technical quality results⁵⁸ related to the distribution and metering, as disclosed herein, represent the best estimate available⁵⁹ at the time of writing and may not coincide with those submitted to ARERA as part of the annual reports.

 With regard to the "specific" levels of commercial quality, com- pared with last year, there has been an improvement in the timing of the execution of simple and complex works for the construction of new ordinary connections in LV (especially for domestic users) and MV, as well as a slight deterioration in other performances, although in most cases they fall within the standards set by the regulations in force.

With regard to the "general" levels, relating to responses to writ- ten complaints/enquiries, there was a deterioration in performance compared to 2020, attributable to the work of recovering back- logs, linked to the effects that the pandemic period has had on operations (e.g. the increase in complaints due to the suspension of measurement data collection by the operator) (see table 22).

Automatic compensation to customers60 to be paid in case of non-compliance with “specific” quality levels, start from a basic amount61, which can be doubled (if the timing of the activities ex- ceeds the standard between two and three times) or tripled (if the timing exceeds the standard by three times).

For the quality aspects of the sales service, managed by Acea Ener- gia, the increase in the percentages of compliance with the stand- ards set by ARERA, already recorded in the last two years (see table 23), was confirmed in 2021.

With reference to Areti's performance related to the incentive reg- ulation of the duration and number of interruptions without prior notice for low-voltage users, the data related to the 2021 financial year - summarised in Table no. 24 - indicate that in the urban areas characterised by the highest degree of concentration of users (so- called high and medium concentration territorial areas), the conti- nuity of the service was guaranteed with a noticeably better quality compared to last year. Steady and already positive results are also being achieved in suburban and rural areas.

In addition to the indicators described above, the electricity distrib- utor is also required to comply with specific levels of service conti- nuity with reference to medium voltage users for which automatic compensation will be paid62 in cases where the number of interrup- tions during the year exceeds a defined standard.

Finally, separately for medium and low voltage users in the event of failure to comply with the maximum power restoration times, there is an additional reimbursement to be paid by the distribution com- pany to each user that is disconnected for more than 4 or 8 hours respectively.

Table no. 22 – The main specific and general levels of commercial quality – energy-distribution (2020-2021)
(ARERA parameters and Areti's performance - 2020: data reported to ARERA; 2021: estimated data)

Note: the symbol “/” is used when services were not requested during the year, “n.a.” means the data are not applicable.

Table no. 23 – The main specific and general levels of commercial quality – energy sales (2020-2021)
(ARERA parameters and Acea Energia's performance - data reported to ARERA)

(*) Free market and more protected service customers with low and medium voltage supplies, and end customers of low-pressure natural gas (predominantly domestic customers and small businesses) receive an automatic compensation calculated on a base value of € 25 if standards are not met.
The symbol “/” is used when services were not requested during the year, N.A. means the data are not applicable.

Table no. 24 – Service continuity data – energy distribution (2019-2021) – (ARERA parameters and Areti performance – 2019-2020: data certified by ARERA; 2021: provisional data)

(*) The yearly average number of disruptions per low voltage customer considers both lasting disruptions (> 3 minutes) as well as short disruptions (≤ 3 minutes but longer than 1 second).
NOTE: the three territorial areas are defined on the basis of the degree of concentration of the resident population: more than 50,000 inhabitants is defined as “high concentration”; between 5,000 and 50,000 inhabitants is defined as “medium concentration”; less than 5,000 inhabitants is defined as “low concentration”.

The companies managing the IIS are engaged in progressive digit- ising of the networks, through studies, field surveys and data entry into the geo-referenced information system (GIS). In particular, at 31/12/2021, Acea Ato 2 has over 85% of the networks traced in the GIS system; Acea Ato 5 has digitised about 4,917 km of the water network at 31/12/2021 and in 2021 completed the surveys on an- other 925 km (24 municipalities). GORI and Gesesa have geo-ref- erenced the stocks shown in Table 25 and are continuing to survey and update the data; Gesesa has already geo-referenced the water sites (wells, springs, reservoirs/partitions) and the sewage lifting and treatment plants, including their functional diagrams.

Table no. 25 – Water mains areas 2021 (geo-referenced data)

The networks are connected to a complex system of equipment and plants necessary for the operations of the aqueduct, treatment and sewerage services. Each year, the Companies carry out:

• infrastructure interventions such as modernisation or strength- ening of the plants the remote control of infrastructures, the completion, extension or the drainage of pipelines and net- works, to contain the losses and improve the efficiency and quality of the service provided;
• interventions to improve utility management (such as installa- tion and replacement of meters), in addition to everything con- cerning the relationship with customers, for which reference is made to the paragraph Customer care);
• interventions to protect people and territory, aimed at ensuring the quality of the drinking water distributed and the water re- turned to the environment (such as Water Safety Plans - WSPs- and laboratory controls; see also the section Relations with the environment and the chapter Institutions and the Company).

For a quantification of the main interventions carried out by the com- panies during the year and the analytical checks on drinking water and waste water carried out independently or by Acea Elabori, see Table 26. Acea Ato 2 pursues security and greater resilience of the supply system managed, in compliance with the Concession flows. In par- ticular, under Ministerial Decree No. 517 of 16 December 2021 "In- vestments in primary water infrastructures for the security of water supply", Acea Ato 2 obtained funding of € 150 million as the imple- menter of four strategic interventions67 within the broader project of making Rome's water supply safe and modernising it; see also the box - Interventions on strategic infrastructures, Peschiera - Le Capore and Marcio aqueducts: making them safe and authorisation procedures - paragraph Protection of the territory and safeguarding biodiver- sity in Relations with the environment. The design of strategic infra- structures is also defined, in collaboration with Acea Elabori, with specific attention to sustainability criteria (see box with details).

The companies continued in 2021 with the installation of new meters and the replacement of old ones (see figures in Table 26). As part of its mass meter replacement activities, Acea Ato 2 has continued its experience in the field of IoT, "Water meter remote reading development", in collaboration with Areti, which has led to the development and testing of a patented product called "Proteus". During the year, a total of about 17,000 Proteus NB-IoTs were in- stalled and put into operation on as many water users and public fountains in Rome. In 2021, around 1,100 meters were brought into remote reading mode, bringing the total number of installed remote reading meters to over 30,000 as of 31/12/2021.

In addition, Acea Ato 2 focused during the year on a diversified remote meter-reading strategy, which includes the introduction of specific solutions according to different installation require- ments. In fact, in addition to Proteus NBIoT devices, the company has started both the procurement of integrated market meters – devices with ultrasound technology that allow for taking measure- ments and remote reading – and the design and development of a new advanced smart metering system for the water service, from which benefits are expected in terms of, for example, optimisation of data quality and quantity, maximisation of the use of communi- cation technologies, and cybersecurity.

AdF continued to massively implement remote reading of meters in the area, through drive-by and walk-by reading, installing over 38,000 meters in 2021 and achieving coverage of 50% of the en- tire fleet of meters; the work carried out in Grosseto, Follonica and Orbetello made it possible, in fact, to almost complete the largest municipalities managed. The solution installed makes it possible to increase the frequency of readings and facilitate data collection. AdF has also created a platform for analysing, checking and moni- toring data from remote reading which, by also integrating data col- lected by fixed and mobile concentrators, will allow greater control of the flows supplied and network balance.

The continuity of the water supply is one of the fundamental ser- vice parameters for customer satisfaction, which has been subject to regulation by the ARERA. Table no. 27 shows the data of the last three years relating to disruptions and water reductions, urgent (due to accidental breakdowns of pipelines or plants, energy inter- ruption, etc.) or planned, for the Companies in question.

Table no. 27 – Number, type and duration of disruptions in the supply of water (2019-2021)

(*) The 2020 figures for Acea Ato 5, AdF and GORI have been consolidated. The 2021 figures for Acea Ato 2, GORI, Gesesa and AdF and Gesesa are still being consolidated. Any adjustments, after data consolidation, will be reported in the next reporting cycle.
(**) As envisaged by the Authority, total disruptions include both shutdowns (due to damage to pipes/pipelines and network changes) and interruptions due to disruptions and system anomalies. The number of total out of service cases is therefore used for the calculation.

The quality of the drinking water distributed mainly safeguards aspects related to health and safety of the community and is therefore an essential element of the service. The same approach also applies, however, to the water returned to the receiving wa- ter bodies, as regards safeguarding ecosystems. Consequently, all the Companies independently carry out controls on drinking and wastewater using internal laboratories or with the support of the Acea Elabori Group Company (see Table no. 26).

In particular, tests on water intended for consumption are carried out on samples collected from springs and wells, supply plants, res- ervoirs and along distribution networks, as well as samples collect- ed for extraordinary testing (users, local health authority requests, etc.) and specific parameters (e.g. radioactivity). Test frequency and sampling points are defined taking into consideration the volumes of water distributed, population served, network and infrastruc- ture conditions and specific characteristics of local springs (see also Environmental relations).

All the Water Operations Companies in the group have started preparations or begun to implement Water Safety Plans (WSP), aimed at preventing and reducing the risks inherent to the drink- ing water service; the activities in question, conducted in 2021, are illustrated in the dedicated (Water Safety Plans - WSP) section of the Water Segment chapter in the Environmental relations section, to which reference should be made.

As regards the territory managed by Acea Ato 2, the spring water collected to supply the Rome and Fiumicino area presents levels of excellent quality at the source, while in the Castelli Romani area and other areas of upper Lazio, the volcanic nature of the terrain adds mineral elements to the aquifer such as fluorine, arsenic and vanadium, in concentrations exceeding those envisaged by the law. For some time, Acea Ato 2 has been working to resolve these is- sues, such as by decommissioning some local sources of supply and replacing them with higher quality springs. In 2021, in particular, Acea Ato 2 built new drinking water plants and upgraded/expand- ed existing plants in the municipalities of Marino, Castel Gandolfo, Ariccia, Rignano Flaminio, Civitavecchia and Pomezia. It has also started work on aqueduct interconnections that will ensure greater network resilience and improve the service provided.

In 2021, AdF implemented the first phase of the project planned

in 2020 to monitor the quality of supply sources with online in- strumentation. The installation of the instruments, the acquisition of the remote-control signals and the preparation of the relative control/reporting dashboards were carried out, through which it is possible to integrate the qualitative data collected with quantita- tive information and with the meteorological and hydrogeological information made available online by the related regional services, updated on a daily basis. During the year, the first 8 supply sources were monitored, which together provide approximately 68% of the water resource distributed by AdF; these include the Santa Fiora springs, and advanced monitoring of the arsenic parameter, using a high-tech analyser tested in 2020, in the water of the Galleria Alta spring is planned. The project envisages monitoring around 75% of the resources drawn from the environment, leaving out only small and very small sources, whose suitability for online monitoring can be assessed on a case-by-case basis.

The installation of online measurement systems and the uptake of remote control makes it possible to continuously monitor the quali- ty of the water and activate early warning systems as provided for in the new quality guidelines for the safety of drinking water specified by the recent European Directive 2020/2184.

GORI supplies its users with quality water, collected from deep wells. The qualitative characteristics of the water distributed are ver- ified by the internal "Francesco Scognamiglio" laboratory, located in Pomigliano d'Arco, which uses cutting-edge instruments, including a spectrometer capable of determining all the metals indicated by the regulations in force on drinking water. The introduction of this equipment has made it possible to reduce the time required to carry out analyses and to reduce laboratory consumables, reagents, the quantity of technical gas and electricity consumption.

Gesesa participates in the technical round table, together with the Campania Water Authority, local, provincial and regional institu- tions, and Arpac and the local health authorities, dedicated to the monitoring and characterisation of the groundwater resource that, through the Campo Mazzoni and Pezzapiana wells, supplies the city of Benevento. In the previous two years it carried out an extraor- dinary control plan for the tetrachloroethylene parameter in the groundwater, finding concentrations below the values imposed by the reference legislation. In 2021, Gesesa launched a project aimed at creating an activated carbon filtration system for the treatment of drinking water at the Benevento water plant (see the dedicated box in Relations with the environment, Water area, paragraph Wa- ter quality).

In 2021, there were 131 water kiosks active (106 of Acea Ato 2, of which 31 in the City of Rome and 75 in the province of Rome, 20 of GORI and 5 of AdF, which has another 2 in the start-up phase); these are dispensers of chilled natural or sparkling water, installed throughout the territory, available to citizens and tourists, free of charge or at minimal cost. The water distributed is the same as the aqueducts and the quality is certified by regular checks conducted by the companies and the relevant local health authorities. The initiative met with a positive response and in 2021, the "kiosks" supplied a total of over 30 million litres of water (about 26.8 million litres from Acea Ato 2, about 3.2 million litres from GORI and about 35,000 litres from AdF water kiosks), with a percentage of sparkling water of about 56%. The environmental benefits are clear: the litres dispensed are equivalent to 601 tonnes of plastic saved over the year (equal to over 20 million 1.5 litre bottles) and over 1,580 tonnes of CO2 not emit- ted into the atmosphere (around 63% more than the 2020 figure of 968 tonnes of CO2 avoided), due to the lack of bottle production68 and net of emissions due to the energy consumption of the kiosks69 and the CO2 added to obtain sparkling water.

Acea Ato 2, by virtue of the new installation plan approved by the OTS, will be able to install a further 100 water kiosks; the company has also undertaken a project for the installation and maintenance of water kiosks and dispensers on behalf of third parties, which in 2021 allowed it to install two water kiosks and one dispenser at LUISS University, one at the Quirinale and one at the Ministry of Economy and Finance.

Acea Ato 2 is also responsible for water up to the "point of supply" for the drinking water fountains in the territory of Rome. . Launched by Acea in 2020, the Waidy app makes it possible to identify the water supply points located throughout the territory. In 2021 it was renamed Waidy Wow and underwent evolution aimed at improving the user experience, becoming a complete tool with better perfor- mance. The graphical interface has been improved and the number of water points mapped across the country has increased to over 50,000; a feature has been made available that allows the user to add a new water point directly. Artistic, cultural and historical content has been expanded to enhance the area, and news and in-depth ar- ticles on sustainability have been added in order to involve users and create a community attentive to environmental and social issues. A feature allows users to identify personalised routes by following the "waterways" (drinking fountains, artistic fountains, water kiosks) or to access pre-set thematic routes and related multimedia content. Finally, the app gives access to a "Web radio", a channel dedicated to infotainment with 24-hour music programming and the inclusion of "short videos on sustainability" in collaboration with LifeGate.

The Regulatory Authority for Energy Networks and Environment (ARERA) defines the specific and general levels of contractual quality for the water sector70. With resolution 547/19, the Author- ity amended and supplemented the previous regulations outlining an incentive system divided into bonuses and penalties to be attrib- uted from 2022 based on operators’ performance. In view of the distribution of the incentives, in addition to calling for controls on operators on this issue, at the end of 2021 the Authority issued for consultation the update to the methods used to verify contractual quality information for the integrated water service with regards to control procedures and penalty amounts. Additionally, with reso- lution 639/2021 of 30 December, the Authority established cer- tain flexible elements in the mechanisms used to assess contractual quality performance, including cumulative evaluation of quality objectives on a two-year basis (2022-2023).

Coinciding with the introduction of the new contractual quality incentive system, the water tariff method for the third regulatory period (2020-2023), regulated by Resolution 580/2019/R/Idr, did not maintain the possibility, already provided for the previous regulatory four-year period71, of accessing premiums relating to contractual quality in the event of the achievement of improved quality standards with respect to those defined at the national level by Resolution 655/2015/R/Idr. Acea Ato 2 has in any case main- tained the improved levels of contractual quality standards, as de- fined by the application submitted in 2016 by the Area Governing Body (Conference of Mayors of ATO 2 Central Lazio) and accept- ed by ARERA, and by the amendments subsequently made by res- olution 4/20 of the Conference of Mayors relating to the updating of the Service Charter. In particular, the improvement standards concern 39 indicators out of the 47 established by the resolution. For some services envisaged in the Service Charters attached to their respective concession agreements, Acea Ato 5 and AdF also pursue and have maintained standards that are better than those imposed by the Authority.

The timing of the delivery of data on specific and general contrac- tual quality levels to the Authority shall be subsequent to the pub- lication of this document. Therefore, unconsolidated data for all companies are presented here, based on the best estimates available at the time of publication, and are intended as indicative of performance trends; consolidated data will be published in the next reporting cycle (see Tables 28-32).

There is a mechanism for automatic compensation of customers in the event of non-standard performance on "specific" indicators, the value of which varies according to the delay in performance (see also the box describing investigations, rewards and penalties in the chapter Institutions and the Company).

The water companies, as required by the Authority, communicate commercial performance data to users in their bills once a year,A- cea Ato 2, Acea Ato 5 and AdF also publish them online, and all publish information on the quality of the drinking water distribut- ed on their websites.

Table no. 28 – The main specific and general levels of contractual quality in the water segment (2020-2021) – Acea Ato 2 (ARERA parameters, improvement standards and Acea Ato 2 performance - 2020 figures are consolidated, 2021 figures are not consolidated)

NOTE: the 2021 data are being consolidated and have still not been submitted to the STO or reported to ARERA. The symbol “/” is used when there are no services during the year.

Table no. 29 – The main specific and general levels of contractual quality in the water sector (2020-2021) – Acea Ato 5 – (ARERA parameters, improvement standards from the Service Charter, and Acea Ato 5 performance – 2020 figures are consolidated, 2021 figures are not consolidated)

(*) In 2020 there were no services found that were the subject of a resolution.
NOTE: The symbol "-" indicates that the average time cannot be calculated because the service is on/off.

Table no. 30 – The main specific and general levels of contractual quality in the water sector (2020-2021) – GORI (ARERA parameters and GORI performance - 2020 figures are consolidated, 2021 figures are not consolidated)

NOTE: The symbol “/” is used when there are no services during the year.

Table no. 31 – The main specific and general levels of contractual quality in the water segment (2020-2021) – GESESA (ARERA parameters, and Gesesa's performance - 2020 figures are consolidated, 2021 figures are not consolidated)

NOTE: The symbol “/” is used when there have been no services during the year, whereas “-” indicates that the average time cannot be calculated because the services is on/off.

Table no. 32 – The main specific and general levels of contractual quality in the water sector (2020-2021) – AdF – (ARERA parameters, improvement standards from the Service Charter, and AdF performance – 2020 figures are consolidated, 2021 figures are not consolidated)

NOTE: The symbol “/” is used when there are no services during the year.