Regulatory framework by business area - Generation and Trading

Italy

The essential plants of Assemini and Portoferraio have been declared eligible for cost reimbursement for 2019 and 2020. The Brindisi Sud and Sulcis plants were declared eligible for the 2019-2020 period. The Porto Empedocle plant is eligible for long-term cost reimbursement until 2025. For 2019 and 2020, the remaining part of essential capacity was contracted under alternative contracts which under current regulations require the supply of capacity to the ancillary services market for a fixed premium. In 2019, the Regulatory Authority for Energy, Networks and the Environment (ARERA) adopted a series of measures regarding the reimbursement of costs to essential plants. More specifically, they regarded:
  • the final adjustment for 2016 for the Assemini and Portoferraio plants;
  •  payments on account for 2018 for the Brindisi Sud, Assemini, Porto Empedocle and Portoferraio plants;
  •  payments on account for 2019 for the Brindisi Sud, Assemini, Porto Empedocle and Sulcis plants.

On June 28, 2019, the Minister for Economic Development issued a decree approving the definitive rules governing the capacity remuneration mechanism (the capacity market). On November 6 and November 28, 2019 two auctions were held with delivery in 2022 and 2023 respectively: Enel was awarded capacity for both years. Some operators and a sectoral trade association contested the decree and the results of the two auctions. A decision is pending before the Lombardy Regional Administrative Court in Milan.

ARERA has confirmed the transitional capacity remuneration mechanism (the so-called “capacity payment”) for the years 2020 and 2021, so as to ensure continuity with the new capacity market, which will produce a financial impact starting from 2022.

Latin America

Chile

Rate revision Introduction of the Transitional Electricity Price Stabilization Mechanism

On November 2, 2019, Law 21.185 of the Ministry of Energy was published. It introduced a Transitional Electricity Price Stabilization Mechanism for customers on the regulated market. Consequently, the prices to be charged to regulated customers in the 2nd Half of 2019 were set at the level of those applied in the 1st Half of 2019 (Decree 20T/2018) and were defined as “Stabilized Prices for Regulated Customers” (PEC).
Between January 1, 2021 and the termination of this mechanism, the prices charged will be those set every six months on the basis of Article 158 of the Electricity Act and cannot exceed the PEC adjusted for consumer price inflation.
Any differences between the amount billed in application of the stabilization mechanism and the theoretical bill determined on the basis of considering the price that would have been applied under the terms of contracts with the various electricity distribution companies will be recognized by generators as receivables for invoices to be issued, up to an overall maximum of $1,350 million until 2023. These differences will be recognized in US dollars and will not accrue interest until the end of 2025. Any imbalances in favor of the generation companies will have to be recovered no later than December 31, 2027.