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Electricity and gas: skip the postponement of protection, all free in 2020

The Senate judged inadmissible the amendment to the Budget Law which postponed the deadline of the protected regime to 2022. Now we return to 2020 but the government…..

Electricity and gas: skip the postponement of protection, all free in 2020

For Electricity and Gas everything is back on the high seas. And the arduous path towards the full liberalization of the market undergoes a new leap backwards. In fact, the Senate judged inadmissible the amendment to the Budget Law - currently being voted in Palazzo Madama - which postponed the end of the Maggio Tutela regime (i.e. the price regime administered by the Energy Authority and still used by millions of families) as of 1 January 2022.

What happens now? To understand this, let's take a step back: the competition law (n.124 of 2017) had set the conclusion of price protection at 1 July 2019 for the electricity sectors (domestic customers and small businesses connected to low voltage) and of natural gas (domestic customers only). However, the 2018 Milleproroghe postponed the date to 1 July 2020. With an amendment to the budget bill, signed by the Cinquestelle and approved in recent days, the closing date of the protected market was then postponed for another year and half, to 1 January 2022. This amendment has now been declared inadmissible, therefore we return to 1 July 2020.

However, it is a temporary return. The uncertainty caused by the legislative framework – with this continuous ballet of dates – actually makes it difficult to move millions of customers, in a few months, from the protected regime to the free market. The same Arera (Independent Authority for energy, waste and water) on 10 December sent a report to Parliament and the government to explain that "56% of domestic customers and 43% of non-domestic customers were still in protection regime in 2018. Even in natural gas, in the same year, the protection service was the supply method for 50% of domestic customers and for 43% of condominiums for domestic use". Limiting full competition in the sector, Arera explained, "are the high concentration in the markets, the reluctance of customers to move on the market and the competitive advantages of historical suppliers".

Hence the proposal to follow a gradual, progressive and certain path: "We therefore ask to introduce rules that will allow us to activate the safeguard for small businesses in January 2021 and only subsequently - with a progressive, transparent and verifiable path - to extend the mechanisms to domestic customers of electricity and gas”, so wrote the Arera.

In practice, an approach in several stages. It is from here that the government will probably restart: perhaps with the most traditional of decrees, the "Milleproroghe" which postpones dozens of deadlines every year. Damnation and delight of the Italians who partly count on it and partly don't realize that the strategy of postponements does not solve problems but simply moves them over time.

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