Electricity prices: EU-Italia agreement nears

The European Commission and the Italian government are “close” to reaching an agreement that would allow for a reduction in the price of electricity generated from gas, in line with EU rules. This was stated by the spokesperson for Competition, Ricardo Cardoso, in Brussels. “We are close,” he said, “to a solution compatible with EU rules that would allow the proposed measure to be implemented, which would effectively reduce the impact of gas-generation costs on the overall price of electricity. Following intense and constructive discussions over recent months between the Commission and the Italian authorities, a broad agreement is taking shape on the key elements necessary to implement this measure in accordance with EU rules. All of this, of course, remains subject to technical discussions.”

According to information obtained by ANSA from sources at the Ministry of the Environment and Energy Security, the agreement currently being finalised in Brussels between the European Commission and the Italian government on the energy bills decree provides for the neutralisation of the pass-through of higher gas costs to the final price of electricity.

In the energy bills decree, the Italian government proposes that the European Emissions Trading Scheme (ETS) levy on gas-fired electricity producers be passed on to consumers’ energy bills. This would reduce the wholesale price of electricity (which in Italia depends mainly on the price of gas), and this reduction would be greater than the increase in the tariff on bills, resulting in a net saving for consumers. This pass-through must be approved by the EU, as the ETS falls within its remit. According to sources at the Ministry of the Environment, Energy and Sustainability (MASE), the agreement reached with the Commission stipulates that the higher cost of gas resulting from ETS taxation must not lead to an increase in the wholesale price of electricity.