Electricity: increased operator responsibility to prevent long interruptions and accelerate service restoration even during emergencies

Milan, March 13, 2017

Italian version

To increase the responsibility of operators to make electricity networks more resilient and robust[1] and to reduce service restoration times in the case of prolonged interruptions, even in the event of extreme weather conditions: these are the objectives of the new rules approved by the Authority in terms of quality of electricity services. In particular, to encourage distributors and Terna to reactivate supplies faster, including through the use of temporary power supply solutions (such as the use of generators), and to ensure greater protection for customers, the option of receiving automatic compensation, which will be paid entirely by the network operators for suspension exceeding 72 hours, has been extended. The Exceptional Events Fund[2], on the other hand, will continue to cover compensation for the first 72 hours of interruption caused by force majeure only.
Automatic compensation for households may reach around 1,000 euro[3] in the case of exceptionally long interruptions (up to 240 hours), in that, starting next winter, the current cap of 300 euro will be abolished (even higher amounts will be established for small and medium enterprises). Given that the additional charges will be borne by the network operators, the result is a strong incentive to restore the service as quickly as possible. These innovations, approved by the Authority with Resolution 127/2017/R/eel, will be valid from 1 October 2017.

In detail, current regulations establish that, in the case of long-term unplanned interruptions, the customer is entitled to automatic compensation from the distributor and/or Terna, which increases the longer the disruption to service, up to a maximum of 300 euro for domestic customers. If the interruption is caused by force majeure, such as natural disasters, compensation is paid through the Exceptional Events Fund, financed by customers and operators. However, from 1 October 2017, the previous 300-euro limit will be abolished and, in the event of interruptions caused by force majeure, after 72 hours of suspension and up to a maximum of 240 hours (10 days), compensation will be paid directly by the distributor or by Terna. The operators' direct responsibility for the payment of compensation beyond 72 hours - period of time believed sufficient for the restoration of the service even in the case of force majeure - is only waivered in the circumscribed and documented cases of suspension and postponement of reactivation operations for the purposes of operator safety therefore, the simple cases of inaccessible roads or fallen trees, which can be managed using special vehicles, are excluded).

The Authority's decision comes just a few days after the issue of the "Guidelines for the presentation of the work plans for increasing the resilience of the electricity system", on the basis of which, by 31 March, Terna and distributors with over 50,000 users will have to submit plans for the improvement of the resilience of the electricity system. The guidelines have been developed as part of the "Technical Board of Experts on Resilience"[4] formed about a year ago by the Authority, which, with a resolution at the end of 2015, introduced the concept of resilience of electricity networks to the regulations (i.e. the ability to resist stresses that exceed the system limitations and return the system to an operational even using temporary interventions).  
Resolution 127/2017/R/eel and DIEU Decision 2/2017, with the Guidelines, are available on the website www.autorita.energia.it.


[1] By resilience of a system, we mean not just the ability to withstand stresses that have exceeded the systems' limitations, but also to return it to an operational state, albeit with temporary interventions. For example, for an electricity system exposed to snowfall with formation of ice sleeves along the aerial power lines, resistance is governed by the design limits of the aerial power lines in relation to the loads resulting from ice and wind, and the provisional recovery interventions can be, for example, the provision of generators in areas where the network "crashed" due to stresses which exceeded the design limits.
[2] The Fund is created from contributions in medium and low voltage domestic and non-domestic customer bills, and from businesses through appropriate penalties.
[3] This value corresponds, for an average household, to about 2 years' free average electricity expenses or more than ten years of distribution service expenses only.
[4] The table was set up through directive Diuc 6/2016 with the purpose of developing the issue of resilience of electrical networks and analysing the incentive regulation for reducing minutes lost to force majeure. The first year we focused on defining a methodology for identifying risks and assessing investment priorities, in relation to the prevention of cracking ice and snow sleeves, also providing practical guidelines on the preparation of operator work plans aimed at increasing the resilience of the transmission and distribution electrical networks.