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Reform of the current market mechanisms of standard offer regime for domestic users and SME in the electricity sector. Establishing the “Tutela SIMILE” standard offer, which is similar to those of the free market. Further obligations for electricity and gas distribution system operators

July 11, 2016

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With resolution 369/2016/R/eel the Italian Regulatory Authority for Electricity Gas and Water establishes the reform of the market mechanisms for price protection for domestic and non-domestic users in the electricity sector, providing for the revision of the standard offer supply conditions (reformed standard offer regime or MTR service) and the establishment and the regulation of a new protection tool capable of promoting switch to the free market (Standard offer similar to a supply by the Italian Free Electricity Market or Tutela SIMILE standard offer).

The resolution, which follows consultations 421/2015/R/eel and 75/2016/R/eel, as regards the reformed standard offer regime, postpones the revision of the contractual and economic conditions of this regime to a subsequent measure. It defines (in Annex A) the general regulation for Tutela SIMILE standard offer but postpones the detailed definition of certain aspects until a subsequent measure. Finally, it introduces new disclosure obligations for the electricity and natural gas distribution system operators towards the Regulatory Authority and to the Single Buyer. Tutela SIMILE standard offer and the reformed standard offer regime are expected to become operational on 1st January 2017.

In brief, the Tutela SIMILE standard offer regulation provides for:
  • the right for all domestic users and small operators served in the standard offer to participate, as well as for consumers who have the right to the standard offer regime and request the activation of a new or previously deactivated delivery point or a transfer. Participating in SIMILAR standard offer and, therefore, signing a contract in this regime is optional;
  • the Single Buyer, who is the Administrator of the Tutela SIMILE standard offer, shall carry out identification procedures for the suppliers accepted and subsequently monitor the persistence of the acceptability conditions for suppliers (according to what is stipulated in the relevant Regulation), and prepare the Central Site, structured in two different sessions, one aimed at domestic users and one at non domestic users who have the right to standard offer. Contact between the user and the supplier only takes place through the Central Site, through which users can access information on Tutela SIMILE Standard offer, compare the offers of the accepted suppliers, choose the offer for which they wish to enter into a contract, through a specific webpage of the chosen supplier (who may refuse the contract with the single consumer, including with the aid of switching with reserve, in line with what is already provided for in the free market);
  • the obligations for suppliers to be accepted to operate in the Tutela SIMILE standard offer framework. Suppliers shall meet requirements relating to financial reliability, reputation and operational nature. In this regard, on 30th September 2016 in the free market or in the respective protection services, they shall alternatively serve:
    • at least 50.000 withdrawal points for electricity end users who have the right to the electricity standard offer regime;
    • at least 100.000 delivery points for electricity end users and/or redelivery points for natural gas end users who have the right to the relevant protection services;
  • the introduction of a maximum number of consumers to be served through Tutela SIMILE standard offer by each single supplier accepted.This number is initially equal to 500 000 and can then subsequently be revised according to the increase in function of the number of accepted suppliers and of the users that access Tutela SIMILE standard offer. In order to manage this maximum number, a reservation mechanism is established on the part of the consumers towards the single supplier selected;
  • the definition of the contract general conditions (table given in Annex 1) that each supplier shall adopt. These conditions have been defined with the purpose of standardising the Tutela SIMILE standard offer contract and of making comparisons easier for the single end user. The Tutela SIMILE standard offer contract has a duration of one year (it shall not include automatic renewal or extension clauses) and only concerns the supply of electricity (additional services and promotions cannot be provided). By the third month before the end of the Tutela SIMILE standard offer contract, the consumer  will receive appropriate written communication from their supplier indicating:
    • the date at which the Tutela SIMILE standard offer contract will terminate;
    • that it is possible to subscribe to a free market offer with the same supplier or with another supplier freely chosen by the customer;
    • that in the case of not entering into a free market contract, the contract and economic conditions of the free market defined by what is indicated by the Regulatory Authority will be applied to the customer.
  • the definition of the economic conditions applied in Tutela SIMILE standard offer, which can be compared to the economic conditions for the reformed standard offer regime. The price shall be composed of:
    • a one-off bonus - expressed in euro for withdrawal points - granted as a single payment to the user in the first Tutela SIMILE standard offer bill, the level of which (which vary  depending on the type of customer) is defined by each supplier at the moment of the acceptance procedure; in the case of early termination of the contract, the supplier has the right to request for it to be returned in proportion to the period between the date of termination of the contract and the original date of termination indicated.
    • the PED amount due and the DISPBT component applied to standard offer regime  customers;
    • the PCR amount due, appropriately introduced for Tutela SIMILE standard offer in order to guarantee the coverage of the risks connected to supplying electricity;
    • the reference PCV amount due for the Tutela SIMILE standard offer customers defined by the Regulatory Authority;
  • the promotion of Tutela SIMILE standard offer through the Regulatory Authority's website and helpdesk, including via the toll-free phone number (numero verde), and with the aid of facilitators who have the task of informing customers and helping them access the Tutela SIMILE standard offer, possibly even cooperating with them in entering into a contract (which can also be carried out by the facilitator in the name and on behalf of the customer).In this regard, it is provided that the consumer associations recognised in the framework of the CNCU and the organisations that represent the PMI, that on 30th September 2016 agree to the preliminary agreement with the Regulatory Authority provided for in resolution 549/2012/E/com, can operate as facilitators. They can therefore be accredited with the role of facilitator by 30th November 2016 at the Single Buyer. For every contract concluded with the support of a facilitator, the latter will receive consideration, the amount of which will be defined in a subsequent measure.

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