Code of the output-based regulation of the electricity distribution and metering services for the regulatory period 2016-2023 - TIQE

December 22, 2015

Italian version

With resolution 646/2015/R/eel, the Regulatory Authority for Electricity Gas and Water approves the "Code of the output-based regulation of the electricity distribution and metering services for the regulatory period 2016-2023" (TIQE 2016-2023), coming into effect on 1 January 2016.
The code - the outcome of a structured consultation process, with the publication of four separate documents (5/2015/R/eel; 48/2015/R/eel; 415/2015/R/eel and 544/2015/R/eel) and numerous thematic meetings - is comprised of 3 parts, each with specific application areas:

Part 1 - Distribution of electricity: regulation of continuity of supply and voltage quality. The main innovations are listed below, looking to the gradual stabilization of the regulation to maintain optimal quality levels and develop procedures for the recognition of costs based on the total expenditure (totex):

• for the duration of interruptions:
  • maintenance mechanism for the indicator of duration of long unplanned interruptions below the long-term target level set in 2004, applying penalties when the values of this indicator are worse than the target level and giving rewards when they are better than the target level;
  • experimental regulation for the three-year period 2017-2019 incentivizing the reduction of the duration of planned interruptions with MV and LV origins (measure to be adopted by 30 June 2016);
  • gradual alignment of the standards on prolonged interruptions to the one currently in force in urban centers; from 2020: 8 hrs for all LV users and 4 hrs for all MV users;
• as for the number of long and short unplanned interruptions: confirmation of rewards-penalties regulation and transfer of long-term objectives to the end of the new regulatory period;
• as for voltage quality: the foundations are laid down for the introduction of a guaranteed standard on transient interruptions and voltage dips for MV users and for new initiatives regarding compliance of the Root mean Square value of supply voltage for LV users.

The following aspects are specifically considered: mandatory recording of interruptions, continuity of supply indicators, incentivizing regulation of the duration and number of unplanned interruptions, individual regulation for MV users, planned interruptions, regulation of prolonged or extended interruptions, voltage quality, quality contracts and resilience contracts.

Part 2 - Distribution and metering of electricity: regulation of commercial quality guaranteed and overall levels. The main innovations are the following:

• reduction of maximum  time for services related to estimates and execution of work requested by end customers;
• expansion of services that qualify for quick estimation (by phone, by the supplier).
• introduction of a number of criteria underlying the conclusion of agreements between distribution companies and applicants for large-scale connections and activations.

The following aspects are specifically considered: commercial quality indicators, guaranteed and overall commercial quality levels, automatic compensation, mandatory registration and information, data verification implementation procedures, large-scale connections and activations, metering service performances.

Part 3 - Selective promotion of investments in distribution grids. This part has the purpose of incentivizing the appropriate development of investments in distribution grids, guiding the choices of distribution companies toward investments that will allow the maximization of net system benefits by means of output-based incentivizing mechanisms, developed according to criteria of selectivity.
The aspects specifically considered - which represent the main innovation of the new measure - concern both the innovative features of medium voltage distribution grids in areas with high use of distributed generation from renewable sources, and the evolution of distribution grids in urban areas, especially with reference to the development of distribution capacity in the risers of buildings. Smart city type experiments are also planned, with innovative features on low-voltage grids.
The resolution also establishes the quality regulation mechanisms to which distribution companies have optional access.
Small sized companies admitted to the individual cost recognition scheme will have specific service quality obligations.
Finally, the measure provides for the following:

• in the course of 2016, the Regulatory Authority will integrate the provisions for the selective promotion of investments in distribution grids, including the provisions regarding the development of risers in urban areas;
• the establishment of a service quality Working Table, coordinated by the Offices of the Regulatory Authority, on the following topics, which necessitate further study: resilience of the electrical system (mechanical and electrical prevention of interruptions caused by severe events), mechanisms for quick service recovery, rewards-penalties regulation for long unplanned interruptions, including those due to force majeure (incentivazion for quick service recovery), traceability of individual standards for MV users with respect to industrialized areas and special contracts for MV users;
• the voltage quality Working Table, established by resolution ARG/elt 198/11, should proceed with its activities, and further study the topic of the individual standard for MV users on transient interruptions and voltage dips;
• defer to a subsequent measure the regulation of the comparative publication of the performance of electronic meters remote management systems.

This sheet is for disclosure purposes only; it is not a measure.