Structure and role

The Italian Regulatory Authority for Energy, Networks and the Environment (Autorità di Regolazione per Energia Reti e Ambiente, ARERA) is an independent body created under Italian Law No. 481 of 14 November 1995 for the purposes of protecting consumer interests and promoting the competition, efficiency and distribution of services with adequate levels of quality, through regulatory and control activities. Initially limited to electricity and natural gas, the Authority's scope of action has been extended by means of some regulatory interventions.

First, Italian Decree No.201/11 converted into Italian Law No. 214/11, assigned the Authority also responsibilities as regards water services. Article 21, para 19, provides that: 'as regards the Italian National Agency for Water Regulation and Supervision (Agenzia nazionale per la regolazione e la vigilanza in materia di acqua), the functions related to the regulation and control of water services are transferred to the Italian Regulatory Authority for Electricity and Gas. Said functions shall be performed with the same powers allocated to said Authority by Italian Law no. 481 of 14 November 1995'.

Later, Italian Legislative Decree No. 102 of 4 July 2014, transposing the Energy Efficiency Directive 2012/27/EU into national law, allocated the Authority specific functions as regards district heating and cooling; within this context, the Authority also exercises control, inspection and sanctioning functions as provided for by the law establishing its jurisdiction, and exercises sanctioning powers under Article 16 of Italian Legislative Decree No. 102/2014.

Moreover, Italian Law No. 205 of 27 December 2017 allocated the Authority regulatory and control functions over the waste cycle, including sorted, urban and related waste. Also in this field, the responsibilities attributed are performed with the same powers and within scope of the principles, purposes and assignments, including those of a sanctioning nature, provided for by Italian Law No. 481/1995.

The Authority's work focuses on ensuring the promotion of competition and efficiency in the energy sectors, as well as ensuring uniform availability and distribution of the services, for all regulated sectors and throughout the country. The Authority also establishes adequate levels of quality for services, certain and transparent tariff schemes based on predefined criteria, while promoting user and consumer protection. These functions are performed by harmonising the economic and financial goals of the operators with more comprehensive objectives, with a focus on social issues, environmental protection and efficient use of resources.

Members

The Authority is a Board consisting of a President and four members appointed by Italian Presidential Decree. The appointment procedure provides for the two-thirds majority of the members of the competent Parliamentary Committees to express their binding opinion on the names proposed by the Ministry of Economic Development, jointly with the Ministry of the Environment and Protection of Land and Sea and approved by the Council of Ministers. This procedure ensures a high approval quorum, de facto bipartisan, amongst Parliament members.
Since August 2018, the Members in office are Stefano Besseghini, President, Gianni Castelli, Andrea Guerrini, Clara Poletti and Stefano Saglia.
The Members remains in office for 7 years and during this period they may not enter into other professional activities. For the two years following the termination of appointment, Members shall not enter into any collaborative, consultancy or employment relationship with firms operating in their areas of competence.

Independence and autonomy

The Authority works with full autonomy and independence of mind within the framework of the general policy guidelines introduced by the Government and the Parliament, and of EU rules and regulations. As a result of the Third Energy Package the Authority's independence and autonomy have also been reinforced in terms of organisation, operation and funding.
The Authority makes its decisions based on the law establishing its jurisdiction and defines the procedures and regulations for internal organisation, operation and accounting.

The resources for the Authority's operation do not come from the State budget but from a contribution from the revenues of regulated operators. This contribution was reduced (voluntarily by the Authority) with respect to the one part per thousand rule provided for by law, with variations depending on the sector and the activity carried out by various parties.

Responsibilities

The Authority regulates the areas of competence, through rulings (resolutions) and, specifically:

• For the energy sectors, it establishes the tariffs for the use of infrastructures and guarantees equal access for operators;
• Prepares and updates the tariff method for determining the fees for both the integrated water service and the integrated waste service and approves the tariffs prepared by the competent bodies;
• Defines the criteria for determining the users' fee for connection to the district heating network and the procedures for exercising the right to "disconnection";
• Encourages investments in infrastructure with particular emphasis on adequacy, efficiency and safety;
• Ensures advertising and transparency of service conditions;
• Promotes higher levels of competition and more acceptable safety standards in procurement, with particular attention to harmonizing regulation for the integration of markets and networks internationally;
• Establishes provisions on accounting separation for the electricity and gas sectors, the water sector and the district heating service, as well as on the compulsory functional separation for the electricity and gas sectors;
• Defines the minimum quality levels for services in terms of the technical and contractual aspects and the service standards;
• Encourages the rational use of energy, especially with regard to the dissemination of energy efficiency and the adoption of measures for sustainable development;
• Until the complete opening of the markets scheduled for July 1, 2019, it updates the reference economic conditions for customers who have not chosen the free market in the energy sectors, on a quarterly basis;
• Increases levels of protection, awareness and information to consumers;
• Monitors, supervises and controls the service quality, safety, access to networks, tariffs, incentives for renewable and similar sources, including in collaboration with the Guardia di Finanza (Tax Police) and other bodies, including the Cassa per i Servizi Energetici e Ambientali (Fund for Energy and Environmental Services - CSEA) and the Gestore Servizi Energetici (Energy Services Manager - (GSE).
• It can impose sanctions and assess and possibly accept commitments by companies to reinstate the adversely affected interests (Italian Legislative Decree No. 93/11).

The Authority also carries out an advisory role to the Parliament and the Government to which it can submit reports and proposals; each year it presents an Annual Report on the state of services and the activities carried out.

Transparency in the decision-making process

The Authority's provisions are adopted according to procedures governed by their internal regulations and by regulations on the general operation of the Public Administration, based on efficiency and transparency criteria. Considerable space is devoted to consultation with all stakeholders, through the dissemination of documents, the collection of written observations and any collective and individual hearings.
The mandatory public disclosure of records and provisions of a general regulatory nature is assured through publication on the Authority's website (art. 32, paragraph 1, of Italian Law No. 69/09).An appeal against the Authority's provisions can be made through the Lombardy Regional Administrative Court (TAR Lombardia), which represents the first instance of the administrative process.
Since 2005, the Authority has introduced the Analysis of Regulatory Impact (AIR) on provisions of particular importance, as a further instrument for a better quality of regulation.

International activities

Since its inception, ARERA has initiated intense international cooperation with regulators in European and non-European countries, to promote the harmonisation of rules and the integration of the energy markets of neighbouring countries and to achieve the objectives of effective and efficient operation of the national market. 

Activities within the European Union Agency for the Cooperation of Energy Regulators (ACER) 

Since 2011, ARERA has been actively contributing to the formation of the regulatory framework of the European electricity and gas markets by participating, together with the regulators of the other 26 EU Member States, in the activities of the European Union Agency for the Cooperation of Energy Regulators (ACER), established by Regulation 713/2009 of the European Parliament and of the Council.
ARERA, together with the other European Regulators, is a member of the Board of Regulators, the Agency's body that contributes to the formation of rules by implementing Euro-Union legislation and in particular European standards and network codes. 
ARERA's officials participate in the activities of the Agency's Working Parties that prepare its acts. 
More information on the European Grid Codes and their implementation process can be found in the section of the ARERA website.

On 23 January 2019, board member Clara Poletti was elected Chairwoman of the ACER Board of Regulators, a position she still holds today, after being confirmed for a further two terms.
Furthermore, since the year 2000, ARERA has been a founding member of the Council of European Energy Regulators (CEER), the voluntary association whose task is to consolidate collaboration between European Union regulators in the electricity and natural gas sectors, develop regulatory best practices and contribute to the formation of European legislation by interacting with the Union's institutions. 

ARERA is the founder and main promoter of the European Water Regulators (WAREG), the association of European water regulators, with the aim of facilitating cooperation between European water regulators (based in Milan at ARERA's offices), exchanging good regulatory practices and promoting a harmonised and stable regulatory framework in the European Union. ARERA has chaired WAREG since 2015, a position held by board member Andrea Guerrini, who was confirmed as Chairman in March 2023. In 2023, the association also started a discussion on municipal solid waste by setting up a specific task force. 

ARERA, as the owner of the Conciliation Service ADR organisation, has been a member since 2016 of the National Energy Ombudsmen Network (NEON), a European network that brings together Ombudsmen and independent out-of-court dispute resolution bodies for consumers in the energy sectors, with the aim of promoting the dissemination of ADR and the exchange of best practices with a view to strengthening the protection of end customers. 

ARERA also plays a leading role in promoting international cooperation with the EU's neighbouring countries. It is, in fact, the founder and main promoter of the Association of Mediterranean Energy Regulators (MEDREG), of which it holds the permanent deputy chair position after two terms as Chair. The position of Deputy Chair has been held by ARERA Chairman Stefano Besseghini since 2018. 
The MEDREG Secretariat is in Milan, hosted by ARERA. 

ARERA has played an important role in the Balkan region since the establishment of the Energy Community Regulatory Board (ECRB), a body set up by the Energy Community Treaty, signed in 2005 between the European Union and the countries of the region. 

In 2022, ARERA promoted the creation of the Balkan Energy School - BES, a no-profit association under the Italian law based in Milan, chaired by ARERA, whose aim is to promote debate and exchange of knowledge in the energy sector, with particular reference to the development, regulation and integration of the market, also taking into account the new sustainability parameters. (The Balkan Energy School website is going to be released soon).

Over the years, ARERA's role in the international arena has also been consolidated through the strengthening of bilateral relations with regulators in other countries, which have led to the initiation of formal collaboration agreements on specific regulatory projects as well as twinning projects funded by the European Commission. 
Through CEER and MEDREG, ARERA also provides support to the International Confederation of Energy Regulators (ICER), the world association that coordinates the regional associations of energy regulators worldwide.
As part of the Organisation for Economic Co-operation and Development (OECD), ARERA participates in the Network of Economic Regulators (NER), a forum numbering more than 70 regulators from various sectors (energy, water, transport, telecommunications) in the 38 member countries, created by the OECD Regulatory Policy Committee to provide advice and studies on good practices in economic regulatory governance.

last update 21 Febrary 2024