Disputes and litigation

Opposition to the construction of new lines

 CasellinaThe projects for constructing new infrastructure often entail adverse reactions that are part of the Nimby (Not in my backyard) syndrome. In these cases, Terna’s position is based on willingness to examine alternative solutions, provided they are compatible with the requirements of the security, efficiency, and cost-effectiveness of the electricity service.

The pursuit of solutions based on mutual consent involves difficult negotiations and takes a long time. The results are normally positive, but during the process there may be persistent local opposition, which receives a lot of media attention. Among these, during 2009 and the first months of 2010, the following should be noted:

  • “Santa Barbara-Casellina” case. The line has been hotly disputed by several owners whose houses are near the route of the line, which has been under construction since 2008. A change in the route has been requested.
  • “Dolo-Camin” case. The procedure of authorisation by the Ministry for Economic Developmenti, in agreement with the Ministry of the Environment, is in progress. The Ministry of the Environment recently issued its decree of environmental compatibility. Two municipalities in Padua province plus others on the Riviera oppose the project of the work and are asking that the segment of the line that concerns their respective territories be put underground.
  • “Cross-Veneto line” case. The authorisation process has been started, which caused problems with local communities, in particular, with an environmental association in the municipality of Paese, to surface again. The local governments involved – Treviso and Venice provinces – are favourable to the work. The committees request that the entire 380-kVi line (about 33 km) be put underground.
  • “Redipuglia-Udine Ovest” case. The authorisation procedure was started in 2008. During 2009, heated opposition to the project erupted, led by the Committee for the defence of rural Friuli. The project includes the construction of the work as an overhead line. The municipalities concerned – which, with 4 exceptions, signed an agreement on the feasibility strip – are now also asking for the entire line to be put underground.
  • “San Giuseppe-Portoferraio” (Elba) case. Work to upgrade the already existing line was authorised by the Ministry of Economic Growth on December 2, 2008, after the 3 municipalities concerned, Livorno province, and the Park Administration had signed the protocol of understanding with Terna. The work began in September 2009. In May 2009, a committee was formed which is stirring up heated opposition to the construction of the overhead part of the line and requesting that it be put entirely underground.

 

Malfunctions

On July 22, 2009, service in the Naples area, including the city centre, was interrupted for several hours. The outage was due to damage to an underground cable caused by construction work carried out by a third party not on Terna’s behalf. The press reported the inconvenience caused by the outage, which was aggravated by the hot weather, but also Terna’s prompt reactivation of the service.

Variante A14

Preliminary investigations by the Authority for Electricity and Gas
There are two preliminary investigations in progress that could concern Terna.

Outages in Sicily in June 2007

On June 26, 2007, Terna took anti-black-out measures in Sicily to avoid the loss of control of the system and prevent more critical situations. Thus the electricity distributors implemented rotating planned disconnections of ordinary users. The measures were made necessary by a series of concomitant factors: very high consumption, widespread fires that entailed shutting down several lines to allow firemen to put them out, and failures and malfunctions. Individuals protested and enterprises reported damage to their business because of the service interruption.
With its Resolution no. 155/2007, the AEEG started a fact-finding investigation on the outages that took place in Sicily on June 25 and 26, 2007.



Fact-finding investigation on unattributed electricity

With its Resolution VIS no. 171/09, the AEEG initiated formal investigations of Terna and several electricity distribution companies to ascertain if they violated the Authority’s provisions regarding the services of transmission, dispatching, and metering of electricity and impose the related monetary administrative penalties.

This step was preceded by Resolution VIS no. 168/09, with which the Authority closed the fact-finding investigation begun in 2007 regarding the abnormal situations noted in the determination of lots of electricity withdrawn from the NTG and not correctly attributed to the dispatching users. The results of the investigation are included in a special concluding report attached to Resolution VIS no. 168/09, in which the responsibilities of Terna and the distribution companies are definitively outlined. As far as Terna’s conduct is concerned, the main censure regards its lack of efficiency and diligence in carrying out several activities of the transmission and dispatching services for which it is responsible.

Environmental litigation

Environmental litigation regards the installation and operation of electric infrastructure and in particular the effects of electric and magnetic fields. In effect, the Parent Company and its subsidiary TELAT are defendants in a number of civil and administrative proceedings, in which the plaintiffs’ request that electric lines be moved or operated in a different way because of the alleged harmfulness of the same, even though they were installed in full conformance with the regulations in force. Requests for compensation for damage to health caused by electro-magnetic fields have been made in only a very limited number of cases.

From the point of view of the decisions handed down on this issue, only in sporadic cases have they been unfavourable to the Company, which in any case has appealed. These proceedings are still pending and negative outcomes are considered unlikely.

Litigation regarding licensed activities

As the licensee of the transmission and dispatching service since November 1, 2005, the Parent Company is the defendant in several proceedings, mostly appeals regarding provisions of the AEEG and/or the Ministry of Productive Activities and/or Terna itself and concerning such activity. Only in cases in which the plaintiffs complain of, in addition to errors in the provisions appealed, also alleged violations by Terna of the rules established by the aforesaid authorities, has the Company appeared in court. As far as such litigation is concerned, even a few proceedings of first and second instance have concluded with the annulment of the AEEG’s resolutions, negative outcomes for the Company can be considered unlikely, because, according to the information furnished by the external lawyers who are assisting the Company in the proceeding, these are pass-through items for Terna.

Other litigation

Several lawsuits regarding city-planning and the environment are also pending. They are connected with the construction and operation of a few transmission lines, and unfavourable outcomes could generate effects which are not predictable at present and therefore are not considered in the determination of the “Provision for litigation and sundry risks”. For a small number of proceedings, we cannot absolutely exclude unfavourable outcomes, whose consequences could consist in expenses connected with changes in the lines and the temporary unavailability of the same, as well as the possible payment of damages. In any case, an examination of the aforesaid litigation, considering also the opinion of the Company’s external lawyers, leads to the conclusion that unfavourable outcomes are unlikely.

Sanctions

In the period 2007-2009:

  • there was no definitive penal conviction or plea bargaining for injuries caused to third parties by Terna’s assets. The same is true of the former subsidiary Terna Participações during the period when Terna still exercised control;
  • no legal proceedings ended regarding corruption, unfair competition, or antitrust and monopolistic practices. There were no definitive administrative or judicial sanctions, monetary or not, regarding the aforesaid matters for non-observance of laws or regulations, including environmental ones, that imposed an obligation to “do/not do” (for example, prohibitions) on Terna or convicted its employees of crimes. The same is true of the former subsidiary Terna Participações in the period in which Terna exercised control. As of December 31, 2009, there was no pending litigation regarding corruption, unfair competition, or antitrust and monopolistic practices.

In 2007, Terna availed itself of the right to pay a reduced penalty – in the amount of € 55,645.00 – to close the AEEG’s proceeding regarding the black-out in 2003, whose purpose was to impose penalties, if need be. In 2008 and 2009, there were no penalties regarding the provision of the service.