Legislative framework

This chapter describes the main regulatory changes affecting the Group's sectors of operation. It also provides essential information on existing concessions and assignments.

 

Energy efficiency

Below is a summary of the main changes introduced by Legislative Decree No. 34 of 19 May 2020 (so-called “D.L. Rilancio"), following conversion Law no. 77 of 17 July 2020 on energy efficiency measures, insofar as they are of interest to the companies of the Iren Group and in particular to Iren Mercato and Iren Smart Solutions.

110% deduction

D.L. Rilancio, with the related conversion law, provides that the tax deduction will apply to the extent of 110 percent for expenses documented and borne by the taxpayer, incurred from 1 July 2020 until 31 December 2021, to be divided among parties entitled in five equal annual instalments. For interventions carried out by autonomous social housing institutes, the following provisions also apply to the expenses, documented and borne by the taxpayer, incurred until 30 June 2022.

Admitted interventions

The interventions for which, if the conditions are met, access is granted to the deduction to the extent of 110% are as follows:

1. interventions of thermal insulation of opaque vertical, horizontal and inclined surfaces affecting the building shell;
2. interventions on common areas of buildings for the replacement of existing winter air-conditioning systems with centralised systems for heating, cooling or the supply of sanitary hot water, whether condensation, heat pump or solar collectors and (exclusively for mountain municipalities not affected by the European infringement procedures for Italy's non-compliance with the obligations laid down in Directive 2008/50/EC) featuring connection to efficient district heating systems;
3. interventions on single-family buildings or building units located within multi-family buildings which are functionally independent and feature one or more independent accesses from the outside for the replacement of existing winter air conditioning systems with heating, cooling or hot sanitary water supply systems, whether they are condensation, heat pump or solar collectors; In addition, exclusively for non-methane areas in municipalities not affected by the European infringement procedures for Italy's failure to comply with the obligations laid down in Directive 2008/50/EC, the deduction is obtainable with the replacement of existing plants with biomass boilers with emission performance values at least 5 star class and, for mountain municipalities not affected by the same European infringement procedures, featuring connection to efficient district heating systems;
4. all other energy efficiency interventions as per article 14 of Decree-Law No. 63 of 4 June 2013, converted, with amendments, by Law No. 90 of 3 August 2013, within the limits of expenditure foreseen, for each energy efficiency intervention, by the legislation in force, provided that they are carried out together with at least one of the interventions mentioned in the previous points; If the building is subject to at least one of the constraints provided for by the code of cultural heritage and landscape or the relevant interventions are prohibited by building, urban planning and environmental regulations, the deduction applies to all the interventions referred to in this point, even if not carried out in conjunction with at least one of the interventions referred to in the previous points;
5. installation of grid-connected photovoltaic solar energy systems on buildings, provided that the installation of the systems is carried out jointly with one of the previous interventions;
6. simultaneous or subsequent installation of storage systems integrated into the solar photovoltaic systems facilitated, under the same conditions;
7. installation of infrastructure for recharging electric vehicles in buildings, provided that the installation is carried out in conjunction with one of the interventions referred to in the first three points.

Minimum requirements for access to the deduction

For the purposes of access to the deduction, the interventions must meet certain minimum requirements (provided by the decrees referred to in paragraph 3-ter of Article 14 of Decree-Law No. 63 of 4 June 2013, converted, with amendments, by Law No. 90 of 3 August 2013) and, as a whole, must ensure, the improvement of at least two energy classes of the building or building units located within multi-family buildings, or, if this is not possible, the achievement of the highest energy class, to be demonstrated by the energy performance certificate (E.P.C.), before and after the intervention, issued by a qualified technician in the form of the sworn statement.

Subjective scope

The provisions set out above apply to interventions carried out, among others:

• by residents;
• by individuals, outside the performance of business, arts and professions, on real estate units, which can benefit from the deductions referred to in the first four points for interventions carried out on the maximum number of two building units, without prejudice to the recognition of deductions for interventions carried out on the common parts of the building;
• by the Istituti Autonomi per le Case Popolari;
• by indivisible housing cooperatives;
• by non-profit organizations of social utility.

Finally, it is noted that the same provisions do not apply if the streamlining measures relate to stately homes, villas, castles and buildings of eminent artistic or historical value (A/1, A/8, A/9 categories).

Option for transfer or discount

Individuals who incur, in 2020 and 2021, expenses for the following actions:

1. rehabilitation of the building heritage;
2. energy efficiency;
3. adoption of anti-seismic measures;
4. recovery or restoration of the façade of existing buildings, including those of only cleaning or external painting;
5. installation of photovoltaic systems;
6. installation of electric vehicle recharging stations

may opt, in lieu of direct use of the deduction due, alternatively:

• for a contribution, in the form of a discount on the due payment, up to a maximum amount equal to the consideration itself, advanced by the suppliers who carried out the work and recovered by them in the form of a tax credit, for an amount equal to the deduction due, with the option of subsequent transfer of the credit to other parties, including banks and other financial intermediaries;
• for the assignment of a tax credit of the same amount, with the option of subsequent assignment to other parties, including banks and other financial intermediaries.

For the purpose of exercising the option to transfer or discount the following must be met:

1. the visa of conformity of the data relating to the documentation that attests to the existence of the requirements that entitle to tax deduction issued by specifically indicated parties;
2. the communication of the data relating to the option exclusively by telematic means, also by making use of the parties issuing the compliance certificate (methods to be regulated by implementing measures);
3. asseveration (also for the purposes of the 110 per cent deduction).

The expenses incurred for the issue of certificates, asseverations and the conformity certificate are among the deductible expenses.

In order to render the measures operational, the following will have to be issued within 30 days from the date when the law comes into force:

• an Order of the Director of the Revenue Agency;
• an implementing decree of the MISE,

which will define the modalities of credit assignment and invoice discounting.

Finally, it is noted that the 2020 Budget Law has, among other things:

• extended to 31 December 2020 the expiry date of existing tax deductions for expenses relating to energy requalification interventions for buildings;
• extended to 31 December 2020 the deadline for the 50% deduction for interventions aimed at recovering the building heritage, including interventions aimed at energy saving, with particular regard to the installation of systems based on the use of renewable energy sources, including photovoltaics;
• introduced the so-called "bonus façades", a deduction of 90% of the expenses incurred for the renovation of the external façades of buildings.

 

Award and performance of electricity distribution services

Network Code (CADE) and general system expenses

By Resolution No. 490/2020/R/eel of 24 November 2020, the Authority made urgent additions to complete the regulations of the Standard Network Code for the electricity transmission service in force as of 1 January 2021, in particular on the actions to be taken by distribution companies to adjust insurance sureties and on the procedure for payment defaults in the presence of a mixed guarantee (rating with traditional guarantee).
By Resolution No. 583/2020/R/eel of 22 December 2020, the Authority confirms with additions the interventions approved by Resolution 490/2020/R/eel.

Finally, by Consultation No. 445/2020/R/eel of 3 November 2020, the Authority published the final guidelines referring to the mechanism for recognizing any failure to collect the tariff components covering general system charges, as part of the procedure for compliance with administrative justice rulings, as per Resolution No. 109/2017/R/eel of 3 March.

The objective is to implement measures aimed, on the one hand, at guaranteeing the system and end customers with respect to the economic consequences of possible defaults by sales operators and, on the other, at ensuring the soundness and reliability of the relevant processes. Alongside the strengthening of instruments to guarantee the solidity of operators, the Authority also intended to strengthen control in order to contain their exposure, making the most of the new opportunities offered by tools such as the Integrated Information System and the timely availability of measurement data, while reducing the costs that ultimately weigh on end customers.

In summary, the main lines of action comprise:

• the development of instruments aimed at assessing the financial soundness of operators and their solvency in making payments to the system, also in order to provide useful elements for updating the lists of authorised sellers (Vendors Register), as well as the ability of these parties to manage the processes and services characteristic of the activity, in particular those with immediate repercussions on customers;
• the development of systems of minimum guarantees and mechanisms for the recovery of vendor insolvencies - with particular reference to the quotas relating to general system charges in the electricity sector - aimed at guaranteeing revenue requirements for general interest purposes (such as the promotion of RES) and, at the same time, minimising recourse to end customers for the coverage of insolvencies from end customers themselves. These measures are based on encouraging all parties in the electric power industry to manage credit efficiently, while maintaining the current collection methods and leaving the role of sellers and distributors unchanged.

 

Award and performance of Waste Management Services

With regard to the sector under review, the financial year was affected by the following measures:

1) Community Legislation

EU Council Decision 2020/1421/EU on the position to be adopted on behalf of the EU concerning the amendments to the Annexes to the European Agreement concerning the International Carriage of Dangerous Goods by Road (ADR) and to the Regulations annexed to the European Agreement concerning the International Carriage of Dangerous Goods by Inland Waterways (ADN).

EU Commission Regulation 2020/2174/EU on shipments of waste.

EU Council Decision 2020/1829/EU on the submission, on behalf of the European Union, of proposals to amend the Basel Convention on the control of cross-border movements of hazardous wastes and their disposal.

EU Council Decision 2020/2053/EU on the system of own resources of the European Union repealing Decision 2014/335/EU and establishing a uniform rate of levy on the weight of non-recycled plastic packaging waste.

EU Commission Regulation 2020/2151/EU lays down provisions on harmonised technical marking specifications for sanitary towels, tampons and tampon applicators, wet wipes, tobacco products and cups and glasses (reduction of the percentage impact of certain single-use plastic products under Directive 2019/904/EU).

EU Commission Decision 2021/19/EU establishes a common methodology and format for the provision of re-use information in accordance with Directive 2008/98/EC of the European Parliament and of the Council.

2) National Legislation

D.M. 21 April 2020 (End of waste, REcer institution)

was published in the Official Gazette of 5 June, 21 April 2020, concerning "Modalities for the organization and operation of the national registry for the collection of authorisations issued and the outcomes of simplified procedures concluded for the performance of recovery operations" (REcer for simplicity), as required by the TUA.
The measure consists of eight articles and an annex, and sets out how the national register is to operate, be organised and transmit data. Specifically, the REcer uses the telematic platform "Monitor-piani" established by the Ministry of the Environment at the National Register of Environmental Managers where the competent authorities must enter the data of authorizations and the results of simplified procedures using the procedure made available on the web portal of the platform and indicated in Annex 1 of the Decree.
The main feature of this tool is to render the data available to the public administrations that request it in order to carry out their institutional tasks and to the competent authorities that request it also, in order to be evaluated in the preliminary investigation of the procedures aimed at issuing the authorizations referred to in Article 184-ter, paragraph 3, of Legislative Decree 152/2006.
The information contained in the national register can also be used by the Ministry of the Environment for the preliminary investigations aimed at defining the specific criteria for the cessation of waste status, as well as to request ISPRA to activate specific control procedures.
The actual operation of the REcer will be communicated with a specific link on the website of the Ministry of the Environment and, until the register is effective, the transmission of authorizations will in any case be carried out in compliance with the procedures set out in Legislative Decree of 3 April 2006 (the "Consolidated Environment Act"), No. 152, and the Law of 2 November 2019 converting, with amendments, Decree-Law No. 101 of 3 September 2019.

Law No. 40 of 5 June 2020 (Conversion law of the so-called D.L. “Liquidità”)
On 7 June 2020, the Conversion Law No. 40 of 5 June 2020, of Decree-Law No. 23 of 8 April 2020 (so-called "D.L. Liquidità") concerning "Urgent measures on access to credit and tax obligations for companies, special powers in strategic sectors, as well as interventions on health and work, extension of administrative and procedural deadlines".
This measure also contains a number of rules affecting the environment, particularly with regard to the management of medical waste. Specifically, it establishes that up to thirty days after the declaration of the end of the state of health emergency, medical waste with only infectious risk subject to the sterilization process in public and private health facilities shall be subject to the legal regime of municipal waste.
Therefore, medical waste with an infectious risk from private and public healthcare facilities may, if sterilised in line with the procedures referred to in the regulation, be temporarily managed as urban waste.

D.L. No. 76 of 16 July 2020 (so-called “Decreto Semplificazioni”)
The Decree contains important innovations regarding EIA, decontamination and green new deal. Specifically, Articles 12 and 13, included in Chapter I of Title II "Procedural simplifications", provide for significant changes to speed up the time required for the Conferences of Services and indicate the date of 31 December 2020 as the deadline for public administrations, and entities to reduce the duration of the procedures for which they are responsible.
Chapters II and III of Title IV are dedicated, respectively, to "Simplifications in environmental matters" and "Simplifications in the field of the green new deal". Among the most significant innovations are those concerning environmental impact assessment procedures, interventions and works at sites subject to reclamation and against hydrogeological instability, renewable energy sources, and financing for the green new deal.

Law No. 77 of 17 July 2020 (Conversion law of the so-called “Decreto Rilancio”)
Other provisions of an environmental nature (contained in Chapter VII - Environmental Measures) include: Support for environmental economic zones, Protection of marine ecosystems, Urgent EIA measures - where the abolition of the Via-Vas Technical-Institutional Committee has been confirmed, Sustainable mobility. In addition, it provides for the introduction of Guidelines by the Ministry of the Environment on the measures to be applied for the waste management of disposable masks and gloves.
The conversion law also confirmed the postponement to 1 January 2021 of the provisions on the so-called "plastic tax".

D.M. Environment 5 August 2020
Restriction of certain hazardous substances in electrical and electronic equipment (EEE).

Legislative Decree No. 116 of 3 September 2020,
concerning "Implementation of Directives 2018/851/EU and 2018/852/EU". Specifically, it intervenes and modifies the following issues and institutions:

• Extended producer responsibility;
• Priorities and prevention;
• Preparation for reuse, recycling and recovery;
• Organic waste;
• Definitions;
• Municipal and special waste and classification;
• By-products;
• End Of Waste;
• Exclusions - mowing and pruning;
• Temporary storage;
• Responsibility of waste producer and disposal;
• MUD (consolidated environmental declaration form), FIR, Registers;
• Post Sistri traceability;
• Intermodal transport;
• National waste management programme;
• National waste management planning;
• Separate collection measures;
• Packaging;
• Penalties.

Legislative Decree No. 121 of 3 September 2020, concerning "Implementation of Directive (EU) 2018/850/EU, amending Directive 1999/31/EC on the landfill of waste".
The decree introduces new organic regulations on the transfer of waste to landfills, making changes to Legislative Decree No. 36 of 13 January 2003.
Specifically, it provides for the progressive reduction of the use of landfills, until the target of no more than 10% of municipal waste by 2035 has been reached, new and uniform calculation methods to measure the achievement of the targets, as well as the prohibition of landfilling waste from separate collection and intended for recycling or preparation for reuse, or in any case (from 2030) suitable for recycling or other recovery.

There are also other important new developments with regard to the following topics:

• eligibility conditions: a specific list of EER codes not eligible for landfill in the presence of chemical-physical characteristics that render them unsuitable is introduced and the general exclusion criteria are updated; exemptions from pre-treatment are inserted for waste from separate collection "for which landfilling produces the best environmental result" (which could be detailed in future regulatory interventions); the Regions are granted the power to define the eligibility of specific waste streams without prior treatment in the presence of well-defined technical (product analysis, IRDP) and management (separate collection) conditions;
• risk analysis: the new Annex 7, which defines the "Information on waste to be included in the permit application for subcategories of non-hazardous waste landfills" details the contents, objectives and methods for carrying out the risk analysis;
• acknowledgement, checks and controls: it is foreseen that sampling and analytical determinations must be carried out by "independent and qualified persons and institutions, through accredited laboratories;
• authorizations and new construction criteria: important innovations in these areas, applicable - by express legal provision - to newly constructed landfills as well as to the construction of new lots in existing landfills for which authorization applications were submitted after the date on which Legislative Decree 121/2020 comes into force.

Legislative Decree no. 118 of 3 September 2020, concerning "Implementation of Directive 2018/849/EU on waste electrical and electronic equipment (WEEE)".
Specifically, the frequency with which the MATTM must send the EU Commission the report containing information, including circumstantial estimates on the quantities, by weight, of electrical and electronic equipment (EEE) placed on the market and waste electrical and electronic equipment (WEEE) collected separately and exported, as well as information relating to the collection and recycling of exhausted batteries and accumulators, is reduced from three years to one.
With regard to photovoltaics, paragraph 1 of the Legislative Decree provides that the financing of the management of WEEE deriving from photovoltaic EEE is the responsibility of the producers.

Law no. 126 of 13 October 2020, (Law converting the so—called “D.L. Agosto”)
In particular, the conversion law confirms the amendment to art. 7-quinquies of Legislative Decree no. 36/2003 thus correcting the erroneous references to the tables and annexes provided by Legislative Decree no. 121/2020 on landfills.
In addition, during the conversion, two paragraphs were added to art. 51, which legitimise (for a limited period) the production of PET bottles without observance of the minimum percentage of 50% of virgin polymer.

MEF Directorial Decree 21 October 2020
Concerning the modalities for the unified payment, for the years 2021 et seq, of the tax on waste (TARI) and the tax for the exercise of the functions of environmental protection and hygiene (TEFA) through the PagoPa platform.

DPCM 11 December 2020
It contains the revision of the methodology of the standard requirements of the Municipalities of the Regions with ordinary statute for the waste disposal service.

Resolution No. 22 of 22 December 2020 of the Register of Environmental Managers
Provides that the persons registered in categories 4 and 2-bis of the Register for the activity of collection and transport of special non-hazardous waste identified by the EER codes and descriptions contained in Annex L-quater produced by the activities reported in Annex L-quinquies, attached to Part IV of Legislative Decree 152/2006, can carry out the collection and transport of this waste if it becomes urban after 31 December 2020, until the modalities of adaptation of the respective registration measures have been defined.

D.L. 31 December 2020, No. 183 – Urgent provisions regarding the extension of legislative terms (so-called “Decreto Milleproroghe”)
The measure did not provide for any extensions in relation to the application of the provisions on the classification of waste. The most important term subject to deferral was instead that, until 31 December 2021, of the new labelling obligations for packaging subject to collection, reuse and recovery.

3) Regional legilsation

At territorial level, the three regions corresponding to the Group's main areas of activity (Emilia Romagna, Liguria, and Piedmont) issued numerous acts in 2020 on environmental matters and, more specifically, on the management and planning of the waste cycle. The main measures concerned sector measures related to the health emergency resulting from the spread of Covid-19, including specific extensions and derogations functional to the continuity of the services provided.

 

Major hydroelectric shunt concessions

L.R. Region of Piedmont No. 26/2020 "Allocation of large derivations for hydroelectric use", introduced the discipline of the annual fee for concessions of large derivations for hydroelectric purposes applicable from 2021 and to be paid in two semi-annual instalments. This law was submitted by the Government to the Constitutional Court through an appeal for conflict of attributions, still pending.

In implementation of Article 21 of RL 26/2020, the Piedmont Region approved the Regional Regulation No. 5/R of 18 December 2020 on the regulation of fees. Iren Energia has indicated that it does not believe that the new regulations are legitimate and does not intend to comply with them.

In implementation of Article 17 of RL 26/2020, the Piedmont Region also approved Regional Regulation No. 6/R of 18 December 2020 on the subject of the obligation to supply energy free of charge from large hydroelectric derivation plants.

 

Concessions and assignments of the Iren Group

Hydroelectric production

The major hydroelectric shunt concessions and the related expiries for the Iren Energia plants are summarised below.

Natural gas distribution

Genoa area

The natural gas distribution service in the area of the Municipality of Genoa and neighbouring municipalities is carried out by IRETI. These concessions are currently operating under the extended regime pending the launch of public invitations to tender.

Emilia Romagna area

The natural gas distribution service in the Emilia provinces is managed by IRETI. It is noted that the existing credit lines are subject to extension pending the call for public tenders.

Other geographical areas

The Group also operates in numerous other areas throughout Italy through assignments or concessions given to mixed capital companies in which IREN Group companies have a direct or indirect investment.

These concessions are currently operating under the extended regime pending the launch of public invitations to tender.

The main assignments and concessions are:

• Province of Ancona / Macerata - ASTEA S.p.A. (in which a 21.32% stake is held by the Consorzio GPO, 62.35% of which IRETI controls in turn): Municipalities of Osimo (AN), Recanati (MC), Loreto (AN) and Montecassiano (MC) assignment expired on 31 December 2010 and under prorogatio regime;
• Municipality of Vercelli and other municipalities in the Province - ASM Vercelli S.p.A. (formerly ATENA S.p.A., 60% owned by IRETI): the 1999 concession expired on 31 December 2010 and is being extended;
• Province of Livorno - ASA S.p.A. (in which IRETI has a 40% stake); Provinces of Livorno, Castagneto Carducci, Collesalvetti, Rosignano Marittimo and San Vincenzo – assignment expired on 31 December 2010 and under prorogatio regime;

Electricity

IRETI manages the public service of electricity distribution in the City of Turin on the basis of a ministerial concession. This concession expires on 31 December 2030. IRETI also distributes electricity in the Municipality of Parma, with the same expiry date.

Through local mixed companies, the Iren Group also distributes Electricity in the following main areas:

• Municipality of Vercelli, with the subsidiary ASM Vercelli S.p.A., which manages in the City the public electricity distribution service on the basis of a ministerial concession, which expires on 31 December 2030;
• Le Marche area, with DEA S.p.A., controlled by ASTEA S.p.A., manages the public electricity distribution service in the municipalities of Osimo (AN), Recanati (MC) and Polverigi (AN), with expiry on 31 December 2030.

District heating

Iren Energia manages the district heating distribution service through concession, award or authorisation to lay networks in the following areas:

• Municipalities of Turin and Moncalieri (TO);
• Municipality of Nichelino (TO);
• Beinasco (TO);
• Reggio Emilia;
• Parma;
• Piacenza;
• Genoa;
• Rivoli;
• Collegno;
• Grugliasco (through NOVE, a company in which Iren Energia holds a 49% interest).

Moreover, Asti Energia e Calore was entrusted with the sub-concession of the district heating service in the city of Asti.

Integrated Waste Service

Liguria area

IRETI S.p.A. holds the management assignment for the integrated water service in the 67 municipalities of the Province of Genoa, serving a total of 880,000 residents. The assignment was granted by Decision no. 8 of the Genoa ATO Authority on 13 June 2003 and will expire in 2032.

The integrated water service in the territory of the Municipalities of the Province of Genoa is managed by IRETI through the safeguarded operators. The authorised and/or safeguarded companies of the Iren Group that perform the function of operating manager are Iren Acqua S.p.A. (60% owned by IRETI), Iren Acqua Tigullio S.p.A. (66.55% controlled by Iren Acqua) and AMTER S.p.A. (49% owned by Iren Acqua).

IRETI also provides the drinking water distribution service in the Municipalities of Camogli, Rapallo, Coreglia and Zoagli in the Genoese ATO.

The company manages only the segment of the water service in the following ATOs:

• Savona area, in the municipalities of Albissola Marina, Albissola Superiore, Quiliano, Vado Ligure, Celle Ligure, Noli, Spotorno, Bergeggi, Savona, Stella, Varazze;
• Centre West 2 ‐ comprises all the municipalities located on the Po valley side, managing the service, through the C.I.R.A. Consortium in the municipalities of Altare, Cairo Montenotte, Carcare, Cengio;
• as regards the Province of Imperia: Bordighera, Camporosso, Isolabona, Dolceacqua, Perinaldo, Vallecrosia, San Biagio della Cima, Vallebona, Seborga, Soldano. For AIGA, IRETI manages in prorogatio a part of the territory of the Municipality of Ventimiglia.

Finally, in La Spezia and its Province, in 29 municipalities, the Iren Group manages (through ACAM Acque) the water service with a concession valid until 31 December 2033.

Emilia Romagna area

The Group provides the Integrated Water Service on the basis of specific assignments granted by the respective Local Authorities, governed by agreements signed with the competent ATOs.
Based on the laws of the Emilia Romagna Region, water service Agreements provide for 10‐year assignments, in a safeguarding arrangement, except for the agreement relating to the Parma ATO, which sets the expiry of the assignment at 30 June 2025, by virtue of the disposal to private entities of 35% of the AMPS capital by the Municipality of Parma in 2000 through a public offering.
The Integrated Water Service in the Parma, Piacenza and Reggio Emilia ATOs is managed by the companies of the IRETI Group. Ownership of the assets and networks of the water segment was transferred to companies wholly owned by public entities. These companies made their networks and assets available to the Iren Group on the basis of a rental contract and against the payment of a fee.

On 3 December 2019, ATERSIR published in the Official Journal of the European Union the Call for Tenders, concerning "Restricted procedure for the selection of the operating private partner of the company to be established to which the concession of the integrated water service for the Province of Reggio Emilia will be entrusted".

Main elements:

• Value of the Concession: 1,550,000,000.00 euro
• Duration of Concession: from 1 January 2021 to 31 December 2040 => 20 years;
• Award criterion: most advantageous cost-effective offer (70 points technical‐qualitative part + 30 points to the financial portion);

As regards the Management model, it provides ‐ from the corporate point of view ‐ for the incorporation of a limited‐liability company, to be called “Azienda Reggiana per la Cura dell’Acqua” (Reggian Company for Water Treatment), abbreviated to ARCA. The private partner ‐ selected with the dual‐purpose procedure ‐ will hold 40% of the share capital of the company in question, while AGAC Infrastrutture S.p.A. will be the public partner with 60% of the shares.
The tender procedure provides for an obligation for the private partner to create a territorial operating company (100% held) for management of the operating tasks assigned with the tender procedure. This company will not be linked to the mixed company through an equity investment, but only through an agreement that governs the assignment by ARCA S.r.l. to the operating company of the specific operating tasks identified in the tender procedure.
The tender procedure, having passed the pre-qualification stage, is currently underway.

The table below summarises the data on the existing agreements in the Group’s main areas of operation:

(*) Service extended until new agreements are defined following the tender procedure

Other geographical areas

The Iren Group also operates in the Integrated Water Service sector in other parts of Italy through assignments or concessions given to mixed‐capital companies in which it has a direct or indirect investment. The main assignments and concessions are:

• ATO Toscana Costa – ASA S.p.A. (in which IRETI has a 40% stake) Integrated water service in the Municipality of Livorno and other municipalities in the Province;
• Ambito Territoriale Marche Centro, Macerata (ATO3) - ASTEA S.p.A. (21.32% owned by Consorzio GPO, which is in turn 62.35% controlled by IRETI) only for the municipalities of Recanati, Loreto, Montecassiano, Osimo, Potenza Picena and Porto Recanati;
• Municipality of Ventimiglia: AIGA S.p.A. (in which IRETI has a 49% stake);
• Municipality of Imperia: AMAT S.p.A. (in which IRETI has a 48% stake);
• Alessandria ATO: ACOS S.p.A. (in which IRETI has a 25% stake) for the Municipality of Novi Ligure; Cuneo ATO: Mondo Acqua S.p.A. (in which IRETI has a 38.5% stake) – manages the Municipality of Mondovì and 7 other municipalities in the Cuneo area.

Finally, it should be recalled that on 30 December 2016 IRETI acquired from Società Acque Potabili S.p.A. of Turin a business unit related to the management of the integrated water service in various Municipalities in northern Italy. Several of these managements, outside the Group’s territories of reference, have been gradually sold to third parties. At 31 December 2020 IRETI is still responsible for the management in the Municipalities of Costigliole Saluzzo, Racconigi, Ceresole d’Alba, Sanfrè and Montà, all in the province of Cuneo, and Gazzuolo and Viadana in the province of Mantua. Negotiations for the sale of these operations are expected to take place in 2021.

Environmental service management

The Iren Group provides waste management services on the basis of specific service assignments from the Local Authorities, governed by agreements signed with the provincial ATOs. The table below contains details of existing agreements in the Group’s main areas of operation:

(*) Service extended until new agreements are defined

(**) the term is 20 years running from the end of provisional operation of the Waste‐to‐Energy plant of TRM S.p.A.

ACAM Ambiente, controlled by Iren Ambiente and operating in La Spezia and its Province, manages the service of the integral waste cycle, in 20 Municipalities of the Province (including the Municipality of La Spezia). In addition, it performs the activity of waste disposal, with award in a contract/on a time‐and‐materials basis/in‐house, in 12 other Municipalities of the said Province.
We can note that Iren Ambiente presented a tender for “The award in concession of the public service of integrated municipal and similar waste management in the territorial catchment area of Parma” (44 Municipalities) and for the analogous award in Piacenza.
After a long pause dictated by the well-known emergency situation, ATERSIR, in the context of the tender procedure for the concession of the public service of integrated management of urban and assimilated waste in the Parma basin, opened the envelopes containing the technical and economic offer on 5 June 2020. The offer submitted by Iren Ambiente was provisionally first in the ranking (total score of 100 points), exceeding 4/5 of the maximum score obtainable both from a technical and economic point of view.
On 19 June 2020, the session was held for the evaluation of the anomaly threshold of the offer, and the awarding commission - departing from a first expressed orientation, in that the current legislation (Legislative Decree 50/2016, Article 97, paragraph 3) does not provide for verification obligations on the part of the Commissioning Body where the number of admitted bids is less than three - considered that Iren Ambiente's bid, exceeding the aforementioned 4/5 of the maximum score obtainable, was to be subject to the procedure.
The anomaly assessment procedure was activated on 2 July 2020 by the Project Manager and on 25 September Iren Ambiente sent the last requested justifications.
ATERSIR is also proceeding with the verification of the possession of the general capacity requirements pursuant to art. 80 paragraph 3 of the Legislative Decree 50/2016 and anti-mafia checks.
With respect to the similar tender for the concession of the public service for the integrated management of urban and similar waste in the territorial basin of Piacenza, Iren Ambiente was first in the ranking. ATERSIR activated the procedure for evaluating the anomaly of the offer on 11 September 2020 and on 25 November the company sent the last requested justifications.

With regard to the perimeter of the investee companies of the so-called "Unieco Environment Division", subject to acquisition in 2020, it is noted that the associate SEI Toscana is the owner, under an agreement with ATO Toscana Sud, of the integrated waste management in 104 municipalities in the provinces of Grosseto, Siena and Arezzo, which expires on 27 March 2033.

Services provided to the Municipality of Turin

Iren Smart Solutions is party to the following conventions:

• Agreement signed with the Municipality of Turin for the assignment of street lighting and traffic light services in the Municipality of Turin, expiring on 31 December 2036;
• Agreement stipulated with the Municipality of Turin for the assignment of the management service of the municipal heating plants;
• Agreement stipulated with the Municipality of Turin for the assignment of the management service of the electrical and special systems of the municipal buildings.

With regard to the assignments of the management service of municipal thermal systems and of the management service of electrical and special systems of municipal buildings, expiring on 31 December 2020, the Municipality, by Executive Resolution of 24 December 2020, has extended the deadline to 30 June 2021.
At the end of 2020, Iren Smart Solutions submitted a new project financing proposal pursuant to Article 183 paragraph 15 of the Public Contracts Code for the assignment of the service and, with a Resolution of the Municipal Council of 15 December 2020, the proposal was declared of public interest; Iren Smart Solutions was therefore identified as the promoter.

 

2020 Regulatory measures

Measures following the Covid-19 emergency

Before expounding upon the most significant regulatory measures issued in 2020, it is worth noting that, following the health emergency, many regulatory measures were enacted, particularly in the area of energy infrastructures, concerning both organizational aspects (interruption of non-essential activities for safety and continuity of service during the most acute phases) and economic-financial support measures (deferment of vendor payments, measures in favour of low-voltage users, etc.). In addition, with Resolution 432/2020/R/con ARERA introduced extraordinary measures regarding output-based regulation of electricity and gas distribution services.

The main regulatory measures referred to financial year 2020 with the greatest impact for the energy businesses of the Iren Group are presented below.

Gas

Gas Energy Management

Resolution 96/2020/R/eel - Revision of the methods for allocating costs relating to the mechanism of energy efficiency certificates and application of the RE and RET tariff components.

The Resolution in question provided for the return (total or partial based on the type of plant, pure thermoelectric or cogeneration) was provided in particular for thermoelectric producers who withdraw natural gas for the production of electricity to be fed into the grid, of the quotas of the aforementioned tariff components to cover the TEE mechanism. The amounts of the tariff components in question will be made explicit by the Authority from 1 July 2021.

Gas transport tariffs

The Lazio Regional Administrative Court, by way of judgement no. 440/2020, annulled Del. ARERA No. 575/2017/R/gas that had determined the transportation tariffs for the transitional period in the 2018-2019 years. The Authority has appealed to the Council of State.

By sentence no. 33/2021 the Lombardy Regional Administrative Court also repealed Del. ARERA 114/2019 which established the tariff regulation for the natural gas transportation and metering service for the 2020-2023 period. ARERA also appealed this ruling to the Council of State.

Gas Networks

Resolution 13/2020 ‐ Recognition of the operating expenses for the natural gas metering system, related to remote reading/remote management systems and to the concentrators, incurred by natural gas distributor companies that have adopted buy solutions

The recent resolution 13/2020 defined the procedures for submitting applications for the tariff recognition of remote reading/remote management and concentrator operating costs incurred in the years 2017 and 2018 (by 30 September 2020) and 2019 by 22 January 2021, consistently with the methods of recognition of eligible costs clarified with the previous resolution 537/2109/R/gas.

Consultation Document 39/2020/R/gas - pilot projects to optimise the management and innovative use of gas transmission and distribution networks

The consultation, which ended in April 2020, aims to promote (with a contribution in addition to that provided by the tariffs) actions for the optimization of distribution / transport networks or that seek their more efficient use, which will take the form of three project areas:

1. methods and tools for the optimised management of networks (bi-directional networks through the construction of bi-REMI substations, management methods for the use of networks in storage function with dynamic pressure management, methods and tools for the reduction of gas losses from networks);
2. innovative uses of existing infrastructure (capacity to accommodate renewable gas or hydrogen, power-to-gas and power-to-hydrogen applications and possible related activities for carbon capture/sequestering and/or use);
3. technological/managerial innovation interventions on networks (methods and tools aimed at digitizing networks and business processes, introduction of innovative technologies or innovative uses of existing technologies).

Consultation Document 545/2020/R/gas - criteria for the decommissioning of traditional meters replaced with smart meters and determination of the amount to recover lost depreciation on class G4/G6 meters

Specifically, it states:

• that the recovery of lost depreciation (IRMA) on class G4/G6 meters resulting from the change in useful life takes place over 5 years;
• that IRMA constitutes a tariff receivable from the system, so it can be transferred for valuable consideration to the incoming operator in the event of the award of tenders;
• the guidelines in relation to the criteria for divestment for regulatory purposes of traditional meters of class up to G6, establishing that divestments relating to meters are conventionally deducted from the stratification of historical gross values starting from the values of gross fixed assets relating to the oldest assets.

Consultation Document 312/2020/R/gas - Incentive criteria for aggregations between natural gas distribution companies - Final guidelines

The Regulator believes that it is important to encourage the growth in size of companies, so as to improve the achievement of economies of scale in the natural gas distribution sector and accelerate the process of convergence towards efficient levels of unit costs recognised in the ultimate interest of end users of the service.

The Authority's orientation is to introduce an incentive for aggregation, expressed in €/PdR, to meet the following characteristics:

• apply only to aggregations involving at least one small- or at least one medium-sized enterprise;
• is differentiated according to the size of enterprises and the impact on the degree of concentration in ATEMs;
• is not applicable in the event that the aggregation involves companies serving more than 500,000 RTPs, or in the event that the resulting entity is a company serving less than 50,000 RTPs, or in the event of supra-threshold transactions not yet authorized by AGCM, or sub-threshold transactions leading to the elimination of a potential competitor for the ATEM tender or in which the resulting entity would hold a market share above a pre-established threshold (approximately 80%).

ARERA also provides for the introduction of a corrective element that takes into account the competitive effects on ATEMs:

• maximum in cases where the aggregated unit reaches a size relevant to the tender (approximately greater than 20%) and not prevalent (approximately less than 50-60%) in at least one ATEM in which the pre-aggregated companies operate;
• lowest, or nil, in cases where either the aggregate unit nevertheless remains irrelevant to the tender or assumes a predominant size that is undesirable from a competitive point of view.

Resolution 562/2020/R/com - Provisions on the recognition of costs incurred by electricity and natural gas distribution companies for the rebranding and related communication policies (debranding)
By this resolution, the Authority ordered the recognition of the costs incurred by electricity and gas distribution companies for the change of brand and related communication policies.

Resolution 380/2020/R/com - Initiation of proceedings for the adoption of measures concerning the methods and criteria for determining and updating the rate of return on invested capital in the electric power and gas sectors for the second regulatory period
The Authority has anticipated that, in general, there will be substantial continuity in the regulatory model adopted in the previous regulatory period, with refinements on the level of gearing, the beta parameter and the cost of debt.

Electricity

D.L. Milleproroghe 2020
The Decree introduced amendments to the primary legislation (Competition Law No. 124/2017) concerning price protection: postponement of the end of the protection period to 1 January 2021 for small and medium-sized businesses, and to 1 January 2022 for micro-businesses, and mandated the Ministry of Economic Development (MiSE) to establish by decree the measures to encourage the transition to the deregulated market in addition to defining the Sellers List (parties authorized to sell electric power and natural gas).

Resolution 491/2020/R/eel - Provisions for the provision of the gradual protection service for small enterprises in the electricity sector pursuant to Law No. 124 of 4 August 2017 (Annual market and competition law)
The resolution in question provides that in the first phase of application (1 January 2021 - 30 June 2021) the Gradual Protection Service is temporarily entrusted to the local exercising higher protection that will provide it according to methods defined by the Authority (contractual conditions similar to PLACET, financial terms and conditions calculated on ex-post NSP). In the second phase (1 July 2021 - 30 June 2024) the service will be entrusted to operators selected through competitive procedures: these will be double round auctions, with access to the second round reserved for the two best bidders and with Cap and Floor for the assignment of lots of users in the SME segment divided into homogeneous territorial areas in terms of number, power used, and unpaid ratio. An antitrust cap exists on the volume that can be awarded (35% of the total amount in the tender). In addition to SMEs and micro-enterprises, the service will also benefit points with a power output of more than 15 kW (pursuant to Resolution 604/2020).

Decree 162/2019 (converted by Law no. 8 of 28 February 2020), concerning "Urgent provisions regarding the extension of legislative terms, the organisation of public administrations, as well as technological innovation"
The decree, provides that, pending the full transposition of EU Directive 2018/2001 on the promotion of the use of energy from renewable sources (so-called RED II) - and in partial and early implementation of the provisions contained therein - it is permitted to activate collective self-consumption from renewable sources, or to create renewable energy communities, dictating the relative regulations.

Appropriate measures governed (i) the regulation of financial items related to shared electricity (Del. ARERA no. 318/2020/R/eel) as well as (ii) the incentive tariff for the remuneration of renewable source plants included in configurations for collective self-consumption and in renewable energy communities (MD MiSE of 16 September 2020).

District Heating

Resolution 537/2020/E/tlr - Extension to the district heating and cooling sector of the system of safeguards for the handling of complaints and the out-of-court settlement of disputes by customers and end users in the regulated sectors
The Italian Regulatory Authority for Energy, Networks and Environment (ARERA) is gradually extending to the district heating and cooling sector the system of protections for handling complaints and the out-of-court settlement of disputes by customers and end users (currently "fully operational” for the energy sectors and, on the basis of "transitional rules", for the water sector). This is with a view to harmonisation between the regulated sectors, to the benefit of the customers and users themselves.

Resolution 478/2020/R/tlr - Regulation of metering in the district heating and cooling service for the regulatory period 1 January 2022 - 31 December 2024
The resolution defines the regulation of the quality of measurement in district heating service, supplementing the regulation of the commercial quality of service, for the 1 January 2022 - 31 December 2024 regulatory period.

Electricity Networks

Electricity distribution and metering tariffs

Resolution 190/2020/R/eel - changes to the tariffs of non-domestic low voltage users for May - July 2020

The resolution implements the decrease in the fixed components of transmission, distribution and metering tariffs and general charges provided for by art. 30 of the "Rilancio" Decree. Specifically, it established that low voltage non-domestic customers with power of more than 3 kW were to be given a discount for the May-June-July quarter:

• reset the power quota to zero;
• applied only a fixed fee of reduced amount (as if the supply were at 3 kW), without reducing the power actually available.

The "Ristori" Decree extended this intervention on fixed fees and power for non-domestic users over 3 kW extended to 2021, but only if certain requirements are met (assignment of a specific ATECO code and active VAT number as of 25 October 2020). It will be up to ARERA to define the timing and application methods.

Resolution 461/2020/R/eel - reinstatement to distributors of charges otherwise not recoverable due to failure to collect network service tariffs
Anticipated by Resolution 568/2019, 461/2020 introduced in favour of DSOs a mechanism for the reinstatement of network charges not collected in the 2016-2019 period by sellers with a transportation contract terminated for at least 6 months. In general, the conditions are similar to the rules already defined for the mechanism of reintegration of general system charges (del. 50/2020), with the specific introduction of a 10% deductible. DSOs could submit a petition for an interim reinstatement by 7 December 2020, and will be able to submit a petition for full reinstatement by 30 June 2021.

Resolutions 500/2020 and 563/2020 – resilience plan of DSOs
The recent resolution 500/2020, contains the set of actions to increase the resilience of the electricity distribution grids in relation to the 2020-2022 plans eligible for bonus and/or penalty of the main DSOs, including IRETI.
Subsequent resolution 563/2020 recognized the major DSOs for awards/penalties for interventions completed in 2019. Specifically for the group, IRETI was awarded a prize of approximately € 1 million.

Waste

During 2020, Resolution 443/2019/R/RIF was supplemented by various provisions, drafted both to meet the needs derived from the health emergency from Covid-19 and for the necessary update of the Waste Tariff Method (WTM) for the purposes of preparing the 2021 Economic and Financial Plan (EFP).
The main measures taken are listed below:

Resolution 57/2020/R/RIF containing procedural simplifications relating to the regulation of tariffs for the integrated waste service and initiation of proceedings to verify the regulatory consistency of the relevant decisions of the competent local authority.

Determination 2/DRIF/2020 containing clarifications on the Waste Tariff Method, the procedures for the transmission of the Economic-Financial Plans as well as indications on the valuation of incentives deriving from Renewable Energy Sources, for the purposes of determining revenues, as per regulation prior to the WTR.

Resolution 102/2020/R/RIF: request for data from operators for measures to mitigate the effects of health emergencies on users and on the economic-financial balance of operators, to ensure continuity of essential services and to define methods for dealing with additional charges on operators. The likely postponement of the treatment adjustment is also reported.

Resolution 158/2020/R/RIF concerning new tariff measures in favour of Non-Domestic Users affected by lockdown and of Disadvantaged Domestic Users.

Resolution 238/2020/R/RIF (approved downstream of a consultation process): the measure amends some parts of Resolution 443/2019 relating to the WTR, introducing some elements of flexibility for the Territorial Competent Bodies aimed at mitigating the effects of the health emergency on users and operators.

Specifically, the following have been introduced:

• an additional target 19 that takes into account the costs arising from the COVID-19 pandemic;
• additional forecast-related components (some for 2020 only, and others for 2021);
• the annual portion of the adjustment relating to the difference between the costs determined for 2019 and the costs resulting from the 2020 Economic and Financial Plan approved, by 31 December 2020, in application of the WTM (recoverable over three years);
• the possibility, also for the waste sector, of accessing CSEA funding aimed at supporting the financial advance resulting from the application of the facilities provided by Resolution 158/2020; this option, subject to some conditionalities on ETC and beneficiary operators, can be requested by the ETC itself by 30 September 2020, indicating the beneficiary operators; CSEA verifies and, if positive, disburses the amounts requested by 31 October 2020. By subsequent resolution 299/2020/R/RIF, these terms were then deferred, maintaining the possibility of disbursement of the amounts by 2020.

Resolution 493/2020/R/RIF updating Resolution 443/2019 on the Waste Tariff Method for the purpose of preparing the 2021 Economic and Financial Plan.

Specifically, the measure contains:

• the updating of the inflation rate and the deflator;
• the extension of the emergency measures related to the COVID-19 emergency to 2021;
• time frame: the 2021 Economic and Financial Plan must be sent to ARERA by the Territorial Administration within 30 days of the adoption of municipal resolutions, or by the deadline set by the relevant state regulations (30 January 2021).

In addition, in view of the extension of the health emergency, the national legislator has provided for the allocation of funds to cover the shortfall in TARI revenues, both through DL Rilancio and DL Agosto:

• non-repayable appropriations intended to compensate for the loss of revenue for the Municipalities and municipalities in the red zones, which can also be used for TARI purposes (€ 17.6 million have been allocated for the Province of Piacenza);
• increase in the Fund for Local Authorities for 2020.

Finally, it is worth noting the transposition of the European directives of the "Circular Economy Package" through the approval in August 2020 of the subsequent four legislative decrees concerning waste and packaging, waste batteries, accumulators and WEEE, the management of end-of-life vehicles and landfills. The main innovations concern the new definition of urban waste with qualitative assimilation criteria, the introduction of a National Waste Management Plan and the reform of the Extended Producer Responsibility system.

Water Service

Resolution 186/2020 and Resolution 221/2020 - Implementation of the provisions of Law 160/2019

Law No. 160 of 27 December 2019, concerning "State budget for the FY 2020 and multi-year budget for the 2020-2022 three-year period" supplemented the regulatory framework with respect to the two-year statute of limitations and certain aspects of arrears management.

Consequently, ARERA has provided:

• by resolution 186/2020 of 26 May to incorporate the new provisions relating to the two-year statute of limitations, providing for the overriding of the distinction, previously provided for by Article 1(5) of the 2018 Budget Law, between cases in which the delay in billing of amounts referring to consumption dating back more than two years is attributable to the responsibility of the operator and those in which the delay is presumably attributable to the end user;
• by way of Resolution 221/2020 of 16 June, to amend and supplement the provisions introduced by REMSI (regulation of arrears in the IWT), providing in particular that 1) the payment reminder must be sent to the end user exclusively by registered letter with acknowledgement of receipt or certified email, 2) the deadline by which the end user is required to settle outstanding past payments may not be less than the 40 calendar days provided for by current legislation, calculated from the time the user receives the communication containing the payment reminder.

Resolution 235/2020 - Implementation of urgent measures in the Integrated Water Service in light of the Covid-19 emergency
In relation to the health emergency, the Authority, following the collection of information and a consultation document, adopted urgent measures aimed at mitigating the effects of the COVID-19 emergency on the economic and financial balance of management, and on the conditions under which services are provided, guaranteeing the continuity of essential services, creating the conditions for relaunching investment expenditure and strengthening the social sustainability of the tariffs applied to users.

Specifically, the Authority has provided:

• postponement of the deadlines for tariff and technical quality obligations: the deadline for concluding data collection for the assessment of the achievement of the 2018-2019 technical quality objectives and for the transmission of the proposed 2020-2023 tariff scheme is postponed to July;
• elements of flexibility regarding the mechanism for assessing contractual and technical quality performance: the contractual and technical quality objectives for 2020 and 2021 are assessed cumulatively on a two-year basis;
• derogations regarding the acquisition of measurement data and determinations relating to industrial waste water authorised for discharge into the public sewer system;
• measures aimed at protecting the economic-financial balance of operations, envisaging: i) adjustment of the rate of recognition of financial charges for ordinary work in progress; ii) the possibility for EGA to recognise forecast costs linked to Covid-19, subject to adjustment, as well as deferment costs to cover the lengthening of collection times; iii) potential adjustment of the tariff recognition of arrears costs for the two-year period 2022 and 2023, if findings emerge to this effect;
• measures to strengthen social sustainability: subject to an agreement between the EGA and the operator, the right is granted to defer over time the recognition of costs that contribute to an increase in the tariff with respect to 2019.

Other general matters

Incentives

Resolution No. 270-550/2020/R/efr - Revision of the tariff contribution to be recognized to distributors under the energy efficiency certificates mechanism in execution of Lombardy Regional Administrative Court ruling No. 2538/2019
The resolution, among other things:

• confirms the cap to the tariff contribution (TC) of € 250/EEC;
• introduces an additional fee (AF) of up to € 10/EEC paid to the principal distributor to address shortages of securities on the market;
• by virtue of the extensions granted in view of the epidemiological emergency, distributors will be able to ask the CSEA for an extraordinary advance payment valued at 250 €/EEC to the extent of 18% of the 2019 target (200 €/EEC on future obligations).

Lastly, Resolution No. 550/2020 defined the reference level of the TC and the AF for the 2019 compulsory year as € 250/ EEC and € 4.49/ EEC, respectively

Update of GSE obligations

As a result of the Resolution of the Council of Ministers of 31 January 2020, the GSE provided, among other things, for the extension by a total of 366 days of the deadlines for the entry into operation of plants eligible for incentives under Ministerial Decree FER 2016.

Short limitation

Resolution 184/2020 - billing of amounts referring to consumption exceeding two years

Resolution 569/2018/R/COM had governed the protection of small end customers in cases of billing for consumption that dates back more than two years, providing for specific information obligations of sellers, methods to help them contest the statute of limitations, and forms for submitting and handling any complaints.
These rules distinguished, as provided for in the 2018 Budget Law, cases in which the billing delay was presumably attributable to seller and/or distributor responsibility from those in which the end customer was presumably responsible.
The recent resolution 184/2020 now implements the repeal - made by the Budget Law 2020 - of the point of the Budget Law 2018 on the inapplicability of protections in case of failure/erroneous detection of consumption data resulting from ascertained responsibility of the user.
As a result, from 1 January 2020, small end-user electricity/gas customers and water service users can in any case challenge the statute of limitations for consumption invoiced more than 2 years prior, regardless of the party responsible.

In detail, Resolution 184/2020:

• shall apply from the first useful billing cycle after 28 May 2020;
• shall maintain any actions already commenced by Sellers for invoices issued on or after 1 January 2020;
• requires sellers and operators to adjust the information to customers and users included in the invoice and to inform customers and users of the possibility to object to amounts older than two years by providing a special form.

Consultation Document 330/2020/R/com - Measures for the implementation of the provisions of Law 205/2017 regarding the two-year statute of limitations in relation to the electricity and gas settlement

In the consultation document, the Authority sets out guidelines on:

1. Amendments and/or additions to be made to the regulations governing the physical and financial items involved in dispatching(settlement) when the two-year statute of limitations affects different operators in the wholesale electric power and natural gas markets;
2. the arrangements for offsetting charges arising from exceptions to the two-year limitation period.

The statute of limitations may be invoked as a result, in the case of the electricity sector, of adjustments resulting from the occurrence of late adjustments and, in the case of the gas sector, of the new availability of measurement data replacing estimates or adjustments of actual measurement data previously used. Only these cases, in fact, reverberate upstream in the chain.

In case of enforcement of the short statute of limitations by the end customer, the vendor compensates for the missed receipts by reimbursing the distributor who is penalized for delays in the transmission of measurement data that exceed 24 months by feeding a fund managed by CSEA.