Incentive schemes

The AEEG has introduced specific bonus/penalty schemes aimed at providing incentives for improving the service, both in economic terms and with regard to technical reliability. These schemes provide that, when the objectives are achieved, the value of the benefit for the users of the service must be a multiple of the incentive provided to Terna and that the burden of the uplift for the end user must be reduced. In particular, for 2009 incentive schemes were created for:

  • reducing the resources procured on the DSM;
  • improving the forecast of electricity requirements and the production of wind power (for the period 2008-2011).

The bonuses for achieving the objectives for 2009 established as part of the incentive schemes, amounting to €45 million, are included in the overall figure of regulated revenue.

INCENTIVE SCHEMES IN EFFECT IN 2009

Objective Year introduced  
 Period in effect 
 Penalty/bonus range
 2009 result 
Improved forecasting of wind
power production 
2007 (Resolution no. 351/07)
 2008-2011 Penalty: max €1.5 million Bonus: max €3 million  Bonus: max €3 million  
Improved forecasting of electricity
requirements 
2007 (Resolution no. 351/07) 
 2008-2011 Penalty: max €5 million Bonus: max €5 million
Bonus: max €2 million
Reduced volume of resources
procured on DSM
2008 (Resolution no. 206/08)
 2009(1) Penalty: max €5 million Bonus: max €40 million  
Bonus: max €40 million

(1) With a few changes, the 2009 scheme was extended by ARG/elt Resolution no. 213/09 to the three-year period 2010-2012. 

Other incentive measures

  • With regard to the regulation of transmission service quality, AEEG Resolution no. 341/07 established for the period 2008-2011 a scheme of bonuses and penalties linked to two indicators: the ENSR (benchmark energy not supplied) and the NDU (number of outages per user), measured respectively at the national level and at the level of each transmission operating area (AOT);
  • with its Resolution no. 188/08, the AEEG also provided for the possibility of applying the extra-remuneration-of-investment mechanism to work in progress regarding only a category of investment proposed by Terna with particular strategic importance for the system, provided that the deadline for the investment to become operational set by the Authority itself, on the basis of the information furnished by the Company, is met. The procedures for implementing this mechanism are currently being discussed with the AEEG.