(Finance) – The further one dramatic growth in wholesale energy priceslinked to the conflict in Ukraine and the reduction of gas flows practiced by Russia, led the Authority to introduce measures to protect consumers and guarantee the continuity of supplies.
From 1 October, with the next tariff update, change the method of updating costs of the gas raw material for households who are still in the conditions of protection (today approximately 7.3 million domestic customers, out of a total of 20.4 million, approximately 35.6%). Also to immediately intercept any national and European price containment initiatives, the ARERA has decided not to use forward prices on the wholesale market as a reference, but the average of the actual prices of the Italian PSV wholesale marketat the same time increasing the update frequency of the price which becomes monthly, no longer quarterly.
The new method, linked to the emergency situation, will be in force until the end of the gas protection, currently scheduled for January 2023, a term that the Authority has requested several times to be aligned with that of the electrical protection purpose, scheduled for January 2024.
“Too high prices, an ongoing war and a clear use of gas as a geopolitical lever call us to take extraordinary interventions, to try to guarantee the defense of the consumer and the security of supply – says the president of the Authority, Stefano Besseghini – The use of a more dynamic price formation mechanism will make it possible not to transfer the costs of hedging the risk to the consumer and, instead, to immediately transfer the advantages deriving from any decisions, such as the ceiling on the price of gas, that may be assumed at European level”.
L’intervention adoptedwhile not being able to structurally act on the exceptional levels of market prices, aims to make supplies to consumers safer. The persisting geopolitical tensions, in fact, have exacerbated the uncertainties about the availability of gas from Russia, increasing the criticality for sellers in finding the necessary gas on wholesale markets to satisfy their customers, even
domestic, for the next thermal year starting from 1 October.
With the mechanism approved by the Authority, the risk that sellers will not be able to guarantee their operations is reduced and therefore the supplies to its customers, minimizing the danger that households are forced to resort to the services of last resort and the sellers themselves to the default service, jeopardizing the entire economic equilibrium of the Italian gas supply chain with additional costs that would be socialized.
The new update method makes it easier to find the volumes necessary to satisfy demand, thanks to the reduction of the risks currently linked to the differences between the forward prices used for the current protection update and the spot price at which it is possible to supply the part of consumption not predictable in view of winter. Naturally, as the Authority has repeatedly pointed out, to these interventions it is necessary to support national and international initiatives to restore the balance between supply and demandsuch as the reduction of demand on a voluntary basis and the identification of mechanisms for the management of interventions in the event of an emergency, as also referred to in the report to Parliament and the Government sent today.
With the new update method, the the value of the raw material component for gas protection will be published on the Authority’s website at the beginning of each month following the reference month. Specific transparency obligations are introduced for sellers who, in case of need for price recalculations compared to what previously invoiced, must not only give appropriate information in the bill (as required by the rules of Bill 2.0), but also create a specific section on its website to explain, in a clear and understandable way, the reason for the recalculation and how prices are determined.
The Authority also has decided to activate an emergency work table which will see the full involvement of consumer associations, which will have among its first tasks that of defining further forms of communication and information, to make the whole process as transparent and effective as possible.