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Regulatory framework

Pending approval of the complex energy sector reform (which amongst other things introduces openings for the construction and management of nuclear plants and targets an overall review of the regulatory framework), driven by the bill on development and internationalisation, Italian legislation is marked by intense regulatory activity in terms of the relationships between energy and waste.

With the conversion to law of the waste emergency decree, until finalised a transitional measure has been introduced regarding the conventional recognition of renewable source incentives on 51% of electricity produced by WTE incinerators.

As envisaged in the 2008 Finance Act, which reformed the general regulations on renewable source incentives, the ministerial decree governing the concession of green certificates under the new regime was also approved. Specifically, the decree permits the subsidised withdrawal of unsold green certificates, valued at the average price recorded over the last three years.

Still on matters of waste management regulations, worthy of mention is the conversion to law of Decree Law 208/2008, containing urgent measures on waste and water resources, which to a certain extent, in any event satisfactory for the future, alleviates the economic burden that water service managers would have had to face following a sentence of the Constitutional Court which, at the end of a long and difficult dispute, declared the payment of the treatment element of the water tariff by consumers not linked to treatment plants directly involving wastewater to be illegal and unwarranted. The new regulations now envisage that the treatment element is due as a ratio of the actual cost recorded for treatment activities. For reimbursement of sums illegally collected, regulations also establish that these may be reduced by the amount in any event payable by operators involved in the part-construction of plants as well as in their design.

The legislative event by far the most significant in sectors of interest to the Group is the approval of the local public services reform under the Italian Law Decree 133/2008 (public finance measures). Pending the enactment provisions, the drafting of which is assigned to the Ministry for Regional Affairs, the regulation definitively establishes the principle of market competition in the allocation of economically significant public services and the ban on competition for “in house” entities, on which more stringent criteria are to be applied. For listed companies, both the residual duration of existing licences and the right to compete without waiver of the direct assignments legally obtained prior to the entry into force of the law are safeguarded. The introduction of the principle of separation of proprietary and regulatory authorities is emphasised.

Law Decree 158/08 containing urgent measures to combat the economic crisis gives rise to a tendential reform of the electricity market in that it supersedes the current formation criterion for the single system price margin in favour of the formation of non-standard prices corresponding to possible pay as bid combinations. Implementation of the market reform is deferred to later regulatory acts.

Of particular importance in the regulations under consideration is the above-mentioned bill on corporate and energy development, which abandons previous government proposals. Amongst other elements of regulatory reform, the bill envisages introduction of the single buyer mechanism in the protected segment of the natural gas market.

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