Pricing

ELECTRICITY SERVICE PRICING

n 2023 there continued to be two main types of electricity markets in Italy: the greater protection service and the free market¹⁰⁶. In the standard market service, the operator of reference of the territory, which operates in a monopoly regime, offers the supply service to the customer at economic and contractual conditions regulated by ARERA. On the free market the services offered and related prices are the result of competition among all operators. In this context, customers choose their supplier and the offer that best meets their requirements. As is known, the final deadline for the end of the greater protection service has been set as from January 2024.

The costs of supplying electricity are made up of four items of expenditure: “energy” (supply and retail sales), “transport and meter management” (costs for delivery to customers and meter reading), “taxes” (consumption tax and VAT) and “system charges” (costs for activities in the general interest of the electricity system, borne by all end customers).

Based on the most recently available ARERA figures, customers utilising the greater protection service, in terms of withdrawal points, represent around 32% of the Italian end market (38% in 2021).

The significance of the free market is clear when observing volumes of electricity sold: free market customers consume 88% of total energy going to the end market¹⁰⁷ (86% in 2021).

For “standard” consumption on the protected market, equal to 2,700 kWh/year, at a power of 3 kW, estimated total spending between 1 January and 31 December 2023 is around € 890, a decrease of around 33% with respect to the equivalent 12 months in 2022.

Chart no. 29 – Electricity price trend for a standard domestic customer (€ cent/kWh) (2022-2023)

WATER SERVICE PRICING

By Resolution no. 580/2019/R/IDR of 27 December, the Energy, Networks and Environment Regulatory Authority (ARERA) approved the Water Tariff Method (WTM-3) for the period 2020- 2023, the guiding principles of which are to overcome the Water Service Divide, making operating and management costs more efficient, promoting environmental sustainability and increasing the public's awareness of their water consumption habits. Moreover, the added tools and checks envisaged ensure that any tariff increases are only possible as a result of investments actually made or certified improvements in management.

Table no. 39 – Average water prices applied (2023)

106 For more information, including about other market segments and the progressive liberalisation process, please see the ARERA website.

107 Based on the number of served collection points and the volumes sold in 2022 (ARERA, 2023 annual report).