REGULATION OF THE ELECTRIC SUPPLY INDUSTRY IN ITALY

Elena Ragazzi (elena.ragazzi@ircres.cnr.it) and Giovanni Fraquelli
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Giovanni Fraquelli: Università di Torino

CERIS Working Paper from CNR-IRCrES Research Institute on Sustainable Economic Growth - Torino (TO) ITALY - former Institute for Economic Research on Firms and Growth - Moncalieri (TO) ITALY

Abstract: The Italian electric supplying activity has been concentrated in the hands of a State company (ENEL) since 1963, when private firms were nationalised. Since then, for nearly three decades the sector has been nm tmder a nearly absolute monopoly. Tue first innovations were approved in 1982,but only in 1990 were some exceptions introduced which proved to be of some practical relevance. At present ENEL is still the strategie (both for management and planning) core of the sector, although private operators have been given some spaces in electricity production. In such a concentrated situation, a complex regulatory system was not needed, nor was an independent body for coordination, control and planning considered necessary. From an intemational point of view, the sector is now undergoing a quick and radical process towards a more competitive stmcture. Building up a probable scenario even for the near future would be an extremely hard job, because the only thing which seems to be clear is that ENEL is going to be privatised in a short while. But how this is going to happen cannot be easily forecast. Three main options could emerge: a) ENEL could be transformed into a private monopolist acting under regulation. b) Tue firm could be vertically disintegrated, with the birth of many finns, active at the different stages of the electricity supply activity. e) ENEL could be divided geographically into a number of vertically integrated firms, acting as regional monopolists. Within this process of change, great attenti.on should be paid to make Italian regulation more compliant with EC mles than it is now.

Pages: 20 pages
Date: 1995-06
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