Edison

THE MARKET

Wholesale Market
Reimbursement of the Transmission Capacity Utilization Fee: The AEEG issued Resolution ARG/elt No. 53/08 ordering the reimbursement of the Transmission Capacity Utilization Fee paid to suppliers who were parties to bilateral contracts during the first four months of activity by the Power Exchange, but only for the amounts, determined on an average basis, that exceeded the cap of 2 euros per MWh and only for the April-December 2004 period, thereby applying retroactively the cap introduced by the AEEG with Resolution No. 137/04. In practice, this regulatory action voided the reimbursement introduced by the Presidential Decree of April 13, 2007, pursuant to which Edison Trading Spa had asked the Electrical Services Manager to return the amounts it had improperly collected from April to July 2004, which amounted to 16.6 million euros. On August 29, 2008, Edison filed an extraordinary appeal against Resolution ARG/elt No. 53/08. These proceedings are currently pending before the Regional Administrative Court of Lombardy following a motion by the AEEG requesting the transfer of the appeal to a different jurisdictional venue.

Units That Are Essential for the System’s Safety: On October 23, 2008, the Regional Administrative Court of Lombardy agreed to schedule a merit hearing for the appeal filed by Edison (and other operators) against Resolution ARG/elt No. 97/08 by which the AEEG ordered Terna to include, as of July 31, 2008, in the list of units that are essential for the system’s safety (must run units) all production units authorized to operate in the Dispatching Services Market that are connected to the electrical grid of Sicily and Sardinia. The text of the decision explaining why the court upheld the appeal filed by Edison and voided Resolution No. 97/08 concerning must run facilities was published on December 10, 2008.

Retail Market
Significant resolutions concerning the retail market are reviewed below:
• Resolution ARG/elt No. 15/08 allows direct access to the databases of distributors by suppliers for sales offers to customers. This provision applies exclusively to “residential customers” and is not applicable to customers hooked to medium or high voltage lines and/or customers with annual consumption greater than 200,000 standard cubic meters. Sales offers can be made only by means of printed material and not through other means of communication (telemarketing or website). In September, the AEEG issued Resolution ARG/com No. 134/08, by which it began the process of developing a single computerized platform that will contain a database with the profiles of each customer (including such information as payment delinquencies and status of unresolved issues).
• As of April 1, 2008, pursuant to Resolution No. 278/07, end customers whose electric power usage is not handled on an hourly basis will be billed in accordance with a load profiling based on hourly segmentation, according to which the procurement and dispatching costs of the electric power supplied to the end customer reflect more closely the consumption profile. The abovementioned Resolution, as amended in 2008 by subsequent pronouncements, states that all very high voltage, high voltage, medium voltage and low voltage delivery points with available power greater than 55kW, if equipped with an hourly or electronic meter, must be billed based on hourly segmentation. Moreover, the AEEG issued consultation Documents No. DCO 28/08 and No. DCO 38/08 for the purpose of regulating, early in 2009, physical and financial items concerning dispatching services that may arise as a result of late adjustments to metering data submitted by distributors after the deadline for the load profiling equalization adjustment (May 10 for the previous year).

Regulatory activity carried out to encourage the market deregulation process included the issuance of additional resolutions concerning switching (Resolution ARG/elt No. 42/08), the commercial quality of sales services (Resolutions ARG/com No. 164/08 and ARG/com No. 199/08) and the promotion of a system to research sales offers (Resolution ARG/com No. 151/08).