The Authority: "Extraprofits: part of the funds is used to lower gas bills"

ROME – A portion of the funds that the government will cash in on tax on extra-profits affecting the companies they deal with power they must go “automatically” to end customers who have undergone increases in bill. This is the indication that comes fromAreraalready Authority for Energy in its report on the “monitoring of procurement contracts for the import of gas in Italy”.

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The tax on extra-profits was introduced from Draghi government: the intent is to recover part of the earnings of those operators who have been able to take advantage of low-cost supplies (because they operate in renewable or because they have long-term gas contracts at advantageous prices). The rationale of the law is based on the fact that these operators would have had unexpected gains due to the dynamics of prices and the perfect time that hit the energy sector.

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For this reason, the Authorithy led by Stefano Besseghini advises the Government and Parliament to provide for an additional mechanism by which the money that will enter the state coffers will go directly to the benefit of the bills which will remain much higher than the average even in the coming months.

For the rest, the analysis carried out and the information made available on the risk management mechanisms by the operators, “make it clear that the cost of procuring gas from abroad tends to maintain trends consistent with the value of gas on the current market. ‘wholesale, but also how the identification of any’ extra-profits’ must also be addressed by considering all the costs and margins that are generated along the supply chain and which fall on end customers “. An approach, it is still recalled in the report, in line with the communication adopted by European Commission on the energy markets on 18 May 2022, at the same time as the presentation of the plan RePowerEuwhich provides, among other things, the possibility for member states to extend, exceptionally and for limited periods of time, the possibility of reallocating exceptionally high infra-marginal revenues (the so-called extra-profits) to support consumers.

Finally, from the analysis of Arera it emerges that “import contracts are characterized by an initial price at the time of signing the contract, by formulas that automatically update the price on the basis of indices and by ordinary and extraordinary mechanisms for its periodic updating. 70-80% of the total gas covered by the contracts refers to indices linked to the prices of gas products traded on various European and national wholesale hubs (typically TTF and PSV). For the residual share, equal to 20-30%, the contracts are indexed to the average prices of petroleum products (Brent) “.

The different types of indexation entail “the use, by the operators, of specific hedging instruments, mainly of a financial nature, to contain the risk of misalignment between the purchase prices of long-term contracts and those of the wholesale market at which the gas can be sold “.

L’Arera, based on the contracts of
supplies of gas for the Italian market that have been sent to it, has sent a report to the Government and Parliament on the “Monitoring of supply contracts for the import of gas into Italy”. The analysis – also carried out through simulations and requests for data from operators – focused on the consistency between import costs, wholesale prices and natural gas procurement costs considered in determining the fees for protected domestic customers. Import contracts are characterized by an initial price at the time of signing the contract, by formulas that automatically update the price on the basis of indices and by ordinary and extraordinary mechanisms for its periodic updating.
70-80% of the total gas covered by the contracts refers to indices linked to the prices of gas products traded on various European and national wholesale hubs (typically TTF and PSV). For the remaining portion, equal to 20-30%, the contracts are indexed to the average prices of petroleum products (Brent).

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