Tariffs

ELECTRICITY SERVICE PRICING

In Italy, there are two main types of electricity markets: the stand- ard market service and the free market. In the standard market ser- vice, the operator of reference of the territory, which operates in a monopoly regime, offers the supply service to the customer at economic and contractual conditions regulated by ARERA. On the other hand, in the free market the services offered and related pric- es are the result of competition among all operators. In this context, customers choose their supplier and the offer that most meets their requirements. The legislation has established the gradual abandon- ment of the standard market service, setting the dates by which the transition to the free market system will become definitive, the full entry into force of which is now set for January 2024. 

The costs of supplying electricity are made up of four items of ex- penditure: “energy” (supply and retail marketing), transport and meter management (costs for delivery to customers and reading consumption), system charges (costs for activities in the general interest of the electricity system, borne by all end customers) and taxes (consumption tax and VAT).

According to the latest ARERA data available, the number of cus- tomers still subscribing to the standard market service continues to fall and, in terms of withdrawal points, it accounts for a total of 43% of Italian domestic and non-domestic customers (it was 47.7% the previous year).

The expansion of the free market is evident observing the volumes of electricity sold: free market customers, in fact, consume 84% of the total energy intended for the end market72 (82.7% in the previous year).

For a "standard" consumption of the standard market - equal to 2,700 kWh/year, with a power of 3 kW - the estimated total annu- al expenditure for electricity, updated to the fees defined by ARE- RA in the last quarter of the reference year and excluding taxes, was € 515 in 2021, an increase compared to the previous year (€ 44 per year).

Chart no. 30 – Electricity price trend for a standard domestic customer (€ cent/kWh) (2020-2021)

WATER SERVICE PRICING

By Resolution no. 580/2019/R/IDR of 27 December, the Energy, Networks and Environment Regulatory Authority (ARERA) ap- proved the Water Tariff Method (WTM-3) for the period 2020- 2023, the guiding principles of which are to overcome the Water Service Divide, making operating and management costs more ef- ficient, promoting environmental sustainability and increasing the public's awareness of their water consumption habits. Moreover, the added tools and checks envisaged ensure that any tariff increases are only possible as a result of investments actually made or certi- fied improvements in management.

Table no. 33 – Average water prices applied (2021)

⁷²Based on the number of served collection points and the volumes sold in 2020 (ARERA annual report September 2021).