Bringing the profitability parameters of regulated subjects within limits consistent with the absence of risk can make a significant contribution to the energy spending review, helping to contain the weight of the tariff components linked to network infrastructures in view of the new regulatory period. This is the proposal formulated yesterday by Energia Concorrente, the Association of the independent Italian electricity industry, which organized a public meeting in Rome to present the study by the Bruno Leoni Institute “Nothing risked, nothing gained. The remuneration of network operators in the electricity and gas sectors”.
The Bruno Leoni Institute analyzed the financial statements of the main regulated infrastructure operators, both electricity and gas, in the period 2007-2012, which show that almost all of them obtained an average return on investment (ROI) in the period that was decidedly higher than the target return set by the AEEGSI. The extra profits obtained can be quantified in the order of 600-1.200 million euros/year in the period 2006-2012. The study highlights the opportunity to introduce interventions aimed both at limiting the scope of regulated activities, recovering space on the market, and at limiting the remuneration recognized, suggesting a series of measures aimed at limiting extra profits, removing perverse incentives, avoiding the use of the strategic qualification of the infrastructures, and guarantee transparency and linearity to the tariff policies.
“With this initiative – says Giuseppe Gatti, President of Energia Concorrente – we intend not only to contribute to the objective of reducing the weight of the energy bill for consumers, but to initiate a broader reflection on the role and position of distribution both in the electricity system and in that gas. In this perspective – added Gatti – I think we must carefully consider the opportunity of a complete separation, including ownership, of the regulated activities from those of the market”.
More generally, concludes the study by the Bruno Leoni Institute, it is necessary to rethink the objectives and tools of regulation in the light of a world that has changed profoundly, and for which the primary objective is not only the strengthening of networks, but the creation, maintenance and promotion of efficiency and flexibility in the infrastructure system. This implies a more precise definition of the scope of activity of regulated entities, with the introduction of stringent restrictions on investments that can be more usefully entrusted to the market and to competition between operators.
