Italy Delays Gas Price Cap Approval Amid Financial Scrutiny
Italy Delays Gas Price Cap Approval Amid Financial Scrutiny
The Italian government has delayed the approval of its 'Bill Decree' which aimed to cap natural gas prices at €58.9 per megawatt-hour. The postponement follows requests for clarification from the State General Accounting Office, highlighting ongoing tensions between state intervention and industry financial sustainability.
The Italian Council of Ministers has postponed the approval of the 'Bill Decree' (Decreto Bollette bis), a measure designed to cap natural gas prices for thermal power plants at €58.9 per megawatt-hour (MWh). The delay was triggered by requests for technical clarification from the State General Accounting Office (Ragioneria Generale dello Stato), which raised observations requiring further review before the legislation can proceed.
Originally scheduled to take effect on January 1, 2027, with an initial duration of 12 months extendable to 18, the decree aims to reduce household and business energy bills by lowering wholesale electricity prices. The government estimates a final consumer benefit of approximately 10%. To finance the intervention, which is projected to cost around €7 billion annually, the state plans to cover the difference between the capped price and actual TTF (Amsterdam Exchange) market rates through system charges and direct contributions from energy producers.
The policy, modeled on a Spanish framework adopted during the energy crisis, was preliminarily agreed upon by the Italian government and the European Commission on October 16. However, it has faced strong opposition from the electricity sector. Salvatore Pinto, president of Elettricità Futura, criticized the timing, noting that companies have already absorbed measures with an economic impact of €6 to €7 billion in recent weeks.
"It has been a troubled year," Pinto stated during the organization's annual assembly in Rome on November 4. He highlighted that Italian firms are reporting declining quarterly results, with margins already lower than or in line with European competitors. Pinto warned that the price cap would impose unquantifiable costs on producers who had chosen fixed pricing to protect clients.
In response to these objections, the Ministry of Environment and Energy Security has proposed revising the compensation system. The draft includes an intermediate threshold below market rates but above the price cap, ensuring producers only cover costs exceeding this new level. Minister Gilberto Pichetto Fratin confirmed that discussions are ongoing to modify the mechanism and mitigate the financial impact on energy companies.
G.Waters--TNT
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