The Italian power market's slow and sometimes challenging liberalization process that started back with Legislative Decree n.79 of March 16, 1999 (commonly known as "Decreto Bersani" or "Bersani Decree") is finally coming to its completion.
Regulated service for Italian electricity users (referred to as "Maggior Tutela") is coming to an end. The Italian power market's slow and sometimes challenging liberalization process that started back with Legislative Decree n.79 of March 16, 1999 (commonly known as "Decreto Bersani" or "Bersani Decree") is finally coming to its completion. Starting 1 January 2021, around 200.000 small and micro businesses will move to the free market through a predefined process.
Italian Regulatory Authority for Energy, Networks, and Environment (ARERA), with the resolution number 491/2020/R/eel, has set the rules for implementing Italian Law n.124 of 4 April 2017 and the required steps for all relevant clients. To enable a smooth and gradual transition to the free market for small and micro businesses, a new service will be created with gradual safeguards that will be the default. This service is called Prezzo Libero A Condizioni Equiparate di Tutela (referred to as "PLACET").
The transition process defined by ARERA is as follows:
- From 1 January 2021, all small and micro businesses with a low voltage grid connection and a contractual power of more than 15kW that have not signed an open market supply contract will be forced to leave the regulated tariffs system and placed on PLACET.
- As supplies transition to PLACET a consumer's existing supplier will not change, but the terms and conditions related to the supply will. Under PLACET, a consumer's commodity price will be linked to the Italian spot market price for power - Prezzo Unico Nazionale (referred to as "PUN"), and a set of predefined system charges (similar to the regulated tariff scheme) will be applied.
- Starting 1 July 2021, all affected consumers who have not signed an open market supply contract shall be assigned to suppliers that have won open auctions to deliver PLACET service.
- PLACET service is scheduled to last three years, until 30 June 2024.
The regulated tariff scheme will continue to remain in place until 31st December 2021 for all domestic and micro-businesses with contractual power connections lower than 15kW. This group of consumers will start the PLACET service on 1 January 2022.
It is generally expected that PLACET service will be more expensive than the regulated tariffs it is replacing to push consumers to move on the open market in the shortest timeframe possible.
This change, of course, will open up lots of new additional commercial offers from all existing suppliers in the Italian market: we will see how these offers will segment the market and which suppliers will be more willing to grab additional market share.
More: Research Notes