With Resolution no. 706/2018/R/eel, ARERA updated for 2019 the rate component covering the marketing costs of the operators of the enhanced protection service (RCV) and the levels of the PCV fee, which represents the reference price for sellers on the free market. Resolution no. 576/2019/R/eel updated the levels of the RCV and PCV for 2020.
With Resolution no. 119/2019/R/eel, ARERA introduced measures to enhance the efficiency of managing fraudulent withdrawals of power by end users in the enhanced protection market and amended the existing compensation mechanism for the amounts not collected in respect of such withdrawals. Servizio Elettrico Nazionale has appealed the resolution and the related judgment is pending before the Lombardy Regional Administrative Court in Milan.
With resolution no. 32/2019/R/gas ARERA established the rules for settling financial items between sellers and end users for the 20102012 period with regard to the gas commodity for the safeguard service, in compliance with the Council of State ruling 4825/2016. With Resolution no. 707/2018/R/gas, ARERA updated the QVD component of the financial conditions of the natural gas safeguard service for 2019. Resolution no. 577/2019/R/gas updated the QVD for 2020.
Decree Law 162 of December 30, 2019 (the “Milleproroghe” omnibus extension act), currently being ratified into law, extended the date previously set for eliminating price protection mechanisms in the electricity and gas sectors from July 1, 2020 to January 1, 2022.
Law 18/2014 of October 15 containing urgent measures for growth, competition and efficiency created a National Energy Efficiency Fund to help achieve energy efficiency objectives. The TEC/332/2019 decree of March 20 established that Endesa would be required to make a contribution for 2019 of €29 million to the National Energy Efficiency Fund.
The TEC/1080/2019 decree of October 23 established Endesa’s share of financing of the Bonus Social for 2019 at 36.26%, compared with the previous 37.15%.
Europe and Euro-Mediterranean Affairs
Following a government emergency order issued in late 2018, which represented a step backwards in the process of deregulating the electricity and gas markets in Romania, customers who had elected to enter the free market were authorized to return to the regulated regime, generating losses for service providers in the free market. These losses were caused by the decision of the national regulatory authority ANRE to not reimburse the total costs incurred to provision electricity supplied to end users in the regulated regime. This continued in 2019. At the end of 2019 and throughout 2020, the national regulatory authority adopted a series of regulated bilateral wholesale contracts with low-cost generators for the protected retail segment that will enable recovery of the losses of the past two years.
Following the proposal of the capacity market operator, which was presented in June 2018 and approved by the Irish energy regulators, as from October 1, 2019, demand response resources were de-rated by 33%, with an adverse impact on their commercial value.
The order of Russia’s Federal Antimonopoly Service concerning the indexation of gas rates for the 2nd Half of 2019 and the 1st Half of 2020 was published on June 6, 2019. Gas prices for industrial uses in the regions in which Enel power plants operate increased by 1.4% compared with the 1st Half of 2019.