The agreement between Italy and the European Union on the bill decree is close and could help contain the cost of electricity.
The Government’s objective is to reduce the impact of gas price increases on the final price of electricity, without intervening directly on European taxation of emissions. Only the final details remain to be defined.
Bill decree, EU-Italy agreement close
Generally speaking, in Italy the value of electricity depends to a large extent on that of the gas used to produce it. And when the latter increases, the price of electricity also tends to rise for families and businesses.
According to what was reported by the European Commission, the confrontation with the Italian Government has reached an advanced stage.
This was confirmed by Competition spokesman Ricardo Cardoso, quoted by Sun 24 Hours:
We are close 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. After intense and constructive discussions in recent months between the Commission and the Italian authorities, an agreement in principle is emerging on the key elements needed to implement this measure in accordance with EU rules. Everything, of course, remains subordinate to technical discussions.
Bill decree, the plan to reduce the cost of electricity
The starting point is the bill decree passed by the Government in February. The measure provides for a mechanism that intervenes on the burden of European taxation of emissions, the ETS system, applied to electricity producers who use gas.
In the initial formulation, the Government intended to shift the cost of European taxation borne by producers onto consumers’ bills. The operation should have favored a reduction in the wholesale price of electricity greater than the increase in the rate on the bill, thus producing actual savings for users.
The mechanism, however, came into conflict with European rules: ETS taxation falls within the competence of the EU and directly modifying its functioning would have required intervention at community level. The comparison between Rome and Brussels has therefore turned to alternative solutions to contain the cost of electricity without directly modifying the European emissions system.
Gas price ceiling, hypothesis between 55 and 65 euros per MWh
Among the hypotheses being examined is the setting of a sort of ceiling on the price of gas, designed to sterilize part of the increases above a certain threshold.
The level could be between 55 and 65 euros per Megawatt hour (as reported The Messenger) but the definitive range is yet to be defined. And this is precisely one of the main open points in the negotiation between the Italian Government and the European Commission.
Gas market under pressure
The price at the Amsterdam TTF reached 87.4 euros per Megawatt hour, with an increase of +172% since the start of the war. A level lower than the peaks of August 2022, when the price had reached 340 euros per Megawatt hour, but still capable of weighing on the bills of families and businesses.
Where would the money come from?
Then there is another open front, which concerns the finding of coverage: among the possibilities there would be the use of the 14 billion euros of European flexibility.
For the Government, then, there is also another problem to solve: petrol and diesel, whose prices are skyrocketing.
