Experimental regulation incentivising the reduction in the duration of interruptions with prior notice of the electricity distribution service

October 06, 2016

Italian version

With Resolution 549/2016/R/eel, the Regulatory Authority for Electricity Gas and Water approves the experimental regulation that incentivises reduction in the duration of interruptions with prior notice, originating in medium and low voltage supply, in the period 2017-2023; the measure incentivises selective improvement processes to be achieved in the three-year period 2017-2019, providing for subsequent maintenance levels for the next four-year period 2020-2023. The new regulation adds to the one in force on the number and duration of interruptions without prior notice.

Resolution 549/2016/R/eel gives effect to many of the guidelines outlined in consultation document 247/2016/R/eel, in accordance with the following principles:

1. the incentivisation of the reduction in the duration of interruptions with prior notice should be sustainable and should not undermine the development and maintenance of the power grid;
2. considering the experimental nature of the regulation, the forms of penalty should be restricted, in order to allow for greater participation by distribution companies, but also able to discourage possible opportunistic behaviour.

Distribution companies participating in the awards-penalties regulation of interruptions without prior notice in the period 2016-2023 may join the new mechanism. Regarding the improvement phase in particular, Resolution 549/2016/R/eel provides for increased operator responsibility and accountability, requiring the distribution companies to identify their territorial areas subject to the new regulation and the improvement targets - for each of them - for every year of the three-year period 2017-2019. Awards (only) are provided, annually and for each territorial area, for improvements achieved compared to the initial starting level (average duration of interruptions with prior notice of the years 2012, 2013 and 2014), but not below the reference level. In fact, this reference level (differentiated by concentration level: 17 minutes for high concentration, 35 for average and 64 low) is the level of the duration of interruptions with prior notice below which no awards are given. With regard to the maintenance phase, for the period 2020-2023, Resolution 549/2016/R/eel provides for keeping the level-target of duration of interruptions with prior notice programmed by companies for 2019. Penalties (only) are provided in the maintenance phase (i.e. starting from 2020), again, for each territorial area:

• on a one year basis if the duration of interruptions with prior notice is higher than the maintenance level, inclusive of a deductible which is differentiated by concentration level;
• at the end of the four-year period 2020-2023 (the maintenance phase), if the four-year average of duration of interruptions without prior notice exceeds their own target-level[1].

At the end of the four-year period 2020-2023, the penalty consists in returning the awards gained in the three-year period 2017-2019 for the duration of interruptions with prior notice.  
One of the new measures is the balancing (50%-50%) between the benefits transferred to the user, due to the reduction in the duration of interruptions with prior notice, and the awards granted to the distribution companies.   

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


[1] This measure should push distribution companies to programme a level-target for 2019 which is sustainable also for the next four years and to avoid programming a target to be reached "at all costs" for 2019 that they would not be able to confirm for the next four years without negative repercussions on interruptions without prior notice.