Electricity supply liberalised

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In November 1998, the Italian government decided to liberalise the generation, transmission and distribution of electricity, a decision approved with reservations by tarde unions and employers' organisations. The Government also announced the future privatisation of electric utilities.

On 9 November 1998, after about 40 years of state monopoly, the Italian government decided to liberalise the generation, transmission and distribution of electric power. In the near future, the government will also privatise electricity sales activities to final users. The electricity sector was nationalised at the beginning of the 1960s and the state-owned electricity generation and distribution company, Enel (Ente Nazionale per l'Energia Elettrica), has had a monopoly since then.

The decisions taken by the government, by decree, concern the following issues:

• production. From 1 January 2003, no producer of electric power will be allowed to produce or import, directly or indirectly, more than 50% of the total amount of electric power used in Italy. Consequently, Enel will have to sell by that date at least 15,000 megawatts of generation capacity;

• transmission. A new public body will be created to manage the distribution network, controlled by a new energy authority set up to guarantee competition in the sector. The body, which will not be allowed to employ more than 400 workers, will be charged with managing the high-tension network and ensuring its maintenance with the help of specialist private companies, but it will not own the network. Enel will continue to own the network;

• distribution. Private companies will be given 30-year contracts by the Ministry of Industry to distribute electric power. Each company should be able to supply 300,000 users; and

• sales. Private companies will be allowed to sell electric power to households, operating under a competitive regime. In other words, every user will be able to choose its own supplier of electric power.

The decision taken by the Government encourages the aggregation of large consumers, especially of industrial enterprises. The latter will be able to organise themselves into consortiums and on a district basis and will have the possibility of purchasing, at competitive prices, large amounts of electric power. This should contribute to strengthening Italy's industrial districts.

The minister of industry, Pierluigi Bersani said that the decisions taken by the government "put our country ahead of all European countries leaving space for new entrepreneurs without destroying the existing ones. Users too will benefit from this system"" (quoted in Sole 24 Ore, 11 November).

Trade unions and employers' organisation, consulted many times by the government about the ways of liberalising electricity services, have accepted the government's decision, though with reservations. The Confindustria employers' confederation does not completely agree with the decision, because it postpones privatisation, but its president stated that "the decree leaves all the doors open to the privatisation of the service" (Conquiste del Lavoro, 12 November). The trade union confederations expressed some reservations, withNatale Forlani, confederal secretary of Cisl, stating that "the portion of the market that will be liberalised from the year 2004 is excessive" (Sole 24 Ore, 11 November 1998), though he believes that the general lines of the decree are positive. The electricity workers' unions seem more concerned.Giacomo Berni, secretary general of the electricity workers' union affiliated to Cgil, said that "workers are worried about the new bargaining conditions caused by the separation of distribution activities from sales activities, which will be entrusted to different companies."