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Antitrust: to alleviate bills for SMEs, domestic users can pay higher charges

FROM THE ON/OFF BLOG - The Competition and Market Authority (Agcm) expressed its opinion before the Productive Activities Commission of the Chamber on the SEN (National Energy Strategy) and on energy issues - The Antitrust proposes to charge utilities higher domestic bill charges to alleviate the cost of SME bills

Antitrust: to alleviate bills for SMEs, domestic users can pay higher charges

Giovanni Pitruzzella, president of the Competition and Market Authority (Agcm) spoke before the X Productive Activities Commission of the Chamber on the SEN (National Energy Strategy) and on the main problems relating to energy.

“The effect of the economic crisis has led to a fall in consumption (especially industrial) by increasing the weight of fixed costs on the balance sheets of generation companies. On the other hand, the development of renewable source plants (Er) (aimed at achieving the Community objectives of the so-called 20-20-20) has contributed both to further displacing traditional generation and to burdening the final cost of energy with a series of charges relating to incentives for RES".

From the point of view of energy costs, Agcm pointed out that 50% of electricity generation is a peculiar aspect of our country using expensive methane gas (other European countries can use coal and nuclear power).  

The Agcm, considering the Renzi Government's promise to reduce the cost of bills for SMEs by 10%, an intervention with an estimated cost of 1,4 billion euros a year, has proposed a solution: top up these charges on utilities housekeepers. “A shift of greater charges to domestic consumers – appears written in a note – would in fact allow for the collection of resources by minimally distorting the competitive mechanisms and therefore avoiding, for example, that the new concessions envisaged distort even more competition between companies of different sizes. [..] It would always be possible, moreover, to correct the effect of these higher taxes by taking into account the income of consumers, providing for forms of exemption on lower incomes charged to general taxation".

In other words, if what is indicated by the Agcm regarding the system charges paid by domestic users is applied, an increase of €50 of the A3 component on the 'standard' domestic bill (tariff D2, 2.700 kWh/year) would increase the overall cost from the current €518 to €573 per annum (also considering the 10% VAT which weighs on the A3) but above all it would make the range of 'pass-through' components even wider and further reduce the portion of the bill on which companies can 'play' operating on the free market. The only price of energy which from an already reduced 40% of the domestic bill would go down to a scant 36%, making it even more difficult to present offers that entice the consumer to leave the protected market.

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