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Regulation in Snam

Transport and dispatching, storage and regassification activities are regulated, as defined by the Legislative Decree No. 164 of 23 May 2000 (the so-called "Letta Decree"), on the basis on specific measures defined by the Italian Authority.

The main areas subject to regulations are the definition of allowed revenues and tariffs, the access rules to the infrastructures and the quality levels standards on provided services.

Following the regulatory framework set by the Authority, Snam prepared for each service provided, the Network, Storage and Regassifction Codes containing the transparent and non-discriminatory rules for the access and the use of the services; those Codes, approved by Autorità per l'energia elettrica, il gas e il sistema Idrico, are published on Snam's web pages.

Regulatory matters therefore play a very significant role in the business of Snam and of its subsidiaries.


TARIFF

Tariff resolutions

&

Resolution 575/2017/R/gas – Criteria for the definition of Transport and dispatching tariff for the transitional period 2018-2019.
Resolution 514/2013/R/gas - Criteria for the definition of Transport and dispatching tariff for the period 2014-2017.
Resolution 583/2015/R/com - Criteria for WACC calculation and updating for electricity and gas sector

Period

The duration of the regulatory foriod is 4 years for each business

IV regulatory period: January 2014 - December 2017
Transitional period: January 2018 – December 2019

rab

The RAB sets the value of the capital invested by a company to provide its service

Re-valued historical cost

WACC real pre-tax

The WACC identifies the allowed return to the invested capital and is calculated according to the Capital Asset Pricing Model (CAPM) methodology

6.3% - years 2014-2015

5.4% - years 2016-2018

+1% for the regulatory time-lag, applied to investments realized in the period 2014-16

INCENTIVES on new investments

The investments are incentivized through a further remuneration that is added to the base return rate (WACC)
Investment concluded in the period 2014-17:

+1% for 7 years (on regional network capacity development capex)

+1% for 10 years (on national network capacity development capex)

+2% for 10 years (on entry capacity development capex)

Investment concluded in the period 2018-19:
+1% for 12 years (new transportation capacity)

EFFICIENZA X-factor

The operating efficiency is set through an annual target of operating cost reduction for the company

2,4% opex – period 2014-17 1,3% opex – period 2018-19

 

CODES

Approval date

&

July 2003

System access

&

Regulated TPA

Main features

&

Entry-Exit Model
Market based balancing regime

QUALITY OF SERVICES

Quality resolution

&

Resolution 43/2018/R/gas – Service quality regulation for natural gas transportation activity – period 2018-19
Resolution 602/2013/R/gas – Service quality regulation for natural gas transportation activity – period 2014-17

TARIFF

TARIFF RESOLUTIONS

&

Resolution 531/2014/R/gas - Criteria for the definition of storage tariff for the period 2015-2018
Resolution 583/2015/R/com - Criteria for WACC calculation and updating for electricity and gas sector

Period

The duration of the regulatory foriod is 4 years for each business

IV regulatory period: January 2015 - December 2018

rab

The RAB sets the value of the capital invested by a company to provide its service

Re-valued historical cost

WACC real pre-tax

The WACC identifies the allowed return to the invested capital and is calculated according to the Capital Asset Pricing Model (CAPM) methodology

6% year 2015

6.5% years 2016-2018

 

INCENTIVES on new investments

The investments are incentivized through a further remuneration that is added to the base return rate (WACC)

retention of 20%, for 8 years, of the revenues above the allowed revenues coming from the auctions on new additional capacity

EFFICIENZA X-factor

The operating efficiency is set through an annual target of operating cost reduction for the company

1.4% opex

 

CODES

Approval date

&

October 2006

System access

&

Regulated TPA

Main features

&

Virtual Hub

QUALITY OF SERVICES

Quality RESOLUTION

&

Resolution 596/2014/R/gas

TARIFF

Tariff resolution

&

Resolution 575/2017/R/gas – Criteria for the definition of Regasification tariff for the transitional period 2018-2019
Resolution 438/2013/R/gas - Criteria for the definition of Regasification tariff for the period 2015-2018
Resolution 583/2015/R/com - Criteria for WACC calculation and updating for electricity and gas sector

Period

The duration of the regulatory foriod is 4 years for each business

IV regulatory period: January 2014 - December 2017
Transitional period: January 2018 - December 2019

rab

The RAB sets the value of the capital invested by a company to provide its service

Re-valued historical cost

WACC real pre-tax

The WACC identifies the allowed return to the invested capital and is calculated according to the Capital Asset Pricing Model (CAPM) methodology

7.3% years 2014-2015
6.6% years 2016-2017
+1% for the regulatory time-lag, applied to investments realized in the period 2014-16

INCENTIVES on new investments

The investments are incentivized through a further remuneration that is added to the base return rate (WACC)

Investment concluded in the period 2014-17:
+2% for 16 years (on new terminals or capacity development >30%)
Investment concluded in the period 2018-19:
+ 1,5% for 12 years (new regasification capacity)

EFFICIENZA X-factor

The operating efficiency is set through an annual target of operating cost reduction for the company

0.0% opex

 

CODES

 

Approval date

&

May 2007

System access

&

Regulated TPA

Main features

&

Integrated service for regasification and injection into the grid

 
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updated
23 May 2018 - 13:00 CEST