ARERA water services activities
Resolution 25/2018/R/idr - Initiation of the proceeding concerning the necessary and urgent interventions for the water sector for the definition of the "Aqueducts" section of the national plan, referred to in article 1, paragraph 516 of Italian Law 205/2017
The provision initiates a proceeding concerning the necessary and urgent works in the water sector for the purposes of defining the "aqueducts" section of the National Water Works Plan, referred to in article 1, paragraph 516 of the 2018 forecast budget law (Italian Law no. 205/17 of 27 December 2017).
The aforementioned budget law provides that the Regulator, after consulting the Regions and local authorities concerned, on the basis of the existing schedules and monitoring the implementation of the financial plans of the managers "conveys the list of necessary and urgent works for the sector, specifying the implementation methods and times, for the achievement of the following priority objectives: achievement of adequate levels of technical quality, recovery and expansion of the water supply and transportation of water resources, dissemination of tools aimed at saving water in agricultural, industrial and civilian uses". The Authority also resolved to verify the "persistence of any critical issues in the planning and implementation of works in certain areas of the country, as well as to carry out additional monitoring activities" also using the Energy and Environmental Services Fund (CSEA).
DCO 80/2018/R/idr - Procedures for the containment of arrears for the integrated water service
With consultation document (DCO) 80/2018/R/idr (deadline for submitting the observations scheduled for 12 March 2018), the ARERA presents the final guidelines on the measures necessary for the containment of delinquency related to the integrated water service and also attaches the provision scheme for the Regulation of arrears in the integrated water service (REMSI).
In particular, the DCO contains the final guidelines on the following aspects:
- definition of the categories of final users that cannot be disconnected;
- timing and methods for the declaration of default (including the methods for the payment of the amounts subject to declaration of default);
- timing and procedures for limiting, suspending and deactivating the water supply;
- protection measures that benefit the end user, in particular for resident home users and users in conditions of economic hardship or physical disability;
- compensation that the manager is required to pay in the absence of compliance with certain deadlines.
In addition, the DCO introduces changes to the integrated text of the Contractual Quality Regulation - RQSII, establishing that, in the event that it is not possible to extinguish the complaint, the manager provides the end user with the information to resolve the dispute, indicating in particular the contact details of the Energy and the Environment Consumer Desk and the procedures for involving any other out-of-court dispute resolution bodies, in which the operator commits to participate to make an attempt to resolve the matter through mandatory no-cost end-user mediation.
Lastly, the provision scheme supplements Resolution 86/2013 relating to the security deposit by providing that the security deposit that has been fully or partially depleted due to default of the end user can be reinstated by the manager by adding the related amount in instalments to the subsequent bills over a minimum instalment period equal to 18 months, unless otherwise agreed between the parties. The end user's will to avail himself of the possibility of paying in instalments for a period of less than 18 months must be expressed in writing or in another documented manner.
The Company submitted a document containing its own reflections by the requested deadline (i.e. by 12 April 2018). We are awaiting the final resolution on the matter.
Resolution 1/2018/DSID - Definition of the procedures for the collection of technical and tariff data, as well as the standard forms for the report accompanying the programme of works and updating the tariff provisions for the years 2018 and 2019, pursuant to Resolutions 917/2017/R/idr and 918/2017/R/idr
With regard to the biennial update of the tariff provisions, which is expected to be implemented by the governing bodies of the area (EGA) by 30 April 2018, with resolution 1/2018 drafted by the Water Systems Department (DSID), the ARERA incorporated the contents of resolutions 917/2017 and 918/2017 and established that by 30 April 2018 the EGA must send the ARERA (for the purpose of its approval) the update of the tariff arrangements for the years 2018 and 2019 through the specific procedure available on the ARERA website.
The decision also approves the standard schemes for the preparation of the works programme and the economic and financial plan, the standard format for the report accompanying quality data and the works programme, the standard format for the accompanying report on the update of tariff preparation. These documents, duly completed, must be sent to ARERA using the digital procedure cited above.
The final forms were made available with the Press Release of 05/04/2018, initiating Data Collection and reconfirming the deadline of 30 April 2018 for the EGAs.
With a subsequent press release dated 17/05/2018 "Tariff and technical quality requirements for the integrated water service", ARERA urged the completion of the tariff determination process and the related implementation of the technical quality regulation, recalling that according to Resolution 1/2018/DSID it is possible for managers to present an application for tariff updates in case of inaction of the responsible parties, requesting the Authority to authorise the extraordinary procedure for entering the data. With regard to the new formulation of the fees to be applied to industrial waste authorised to discharge into public sewerage, in addition to the flexibility margin associated with the iso-revenue related to the rate of sewerage and treatment deriving from the application of the previous method, where there are significant problems of financial sustainability other transitional forms of tariff convergence are possible in compliance with the constraints envisaged by Resolution 665/2017/R/idr.
Resolution 57/2018/A - Approval of the organisation and operation regulations of the new ARERA organisational structure
This resolution describes the new organisational structure of the Authority, in force since 1 March 2018, updated in light of the new responsibilities in the waste cycle. The framework was completed by subsequent resolutions 58, 59 and 60 (assignment of macro-structure assignments, interim appointment of the Director of the Environment Division, assignment of offices).
Resolution 9/2018 - DACU Changes to the regulation of the operators - managers portal and to the user manual as per the resolution of 5 January 2017, 1/DCCA/2017
With Resolution 55/2018/E/idr, ARERA defines the transitional regulations in force from 1 July 2018 until 30 June 2019 for the extension of the consumer protection system to the water sector and for the out-of-court settlement of disputes already active in the electricity and gas sectors.
Approved after two consultations in the months of September and December 2017, the provision contains two attachments:
- Annex A "Transitory regulations concerning voluntary out-of-court settlement procedures for disputes between water users and operators";
- Annex B "Regulations concerning the activities carried out by the Desk with reference to the processing of second-level complaints of water users".
With regard to the Transitional Regulation, we note:
Mediation Scope: from 1 July 2018, attempts to mediate disputes between users and their managers will be voluntary and possible - also through the ARERA Mediation Service - and for issues related to the aspects regulated by ARERA itself and for all other issues of interest to the user of the IWS, with the exclusion of those not falling within the scope of application of the Integrated Text of Mediation (TICO) and those relating to water quality;
Duration of the transitional period: the transitional period, defined in the document itself as the "period from the activation for the water sector of the ARERA Mediation Service managed by the Single Buyer, as of 30 June 2019", will start on 1 July 2018 and will end on 30 June 2019. An assessment of the implementation status of the transitional provision is envisaged in order to evaluate further gradual mechanisms, after discussion with the stakeholders;
Exemptions from the implementation of the regulation: if the manager proves that it cannot comply with the obligation to take part in the mediation procedure in the times provided, the EGA responsible, in agreement with the manager and the regionally registered local consumer associations, has the right to submit to ARERA a request for a justified exemption limited to this obligation and for a maximum period of one year, in any case with a deadline of 31 December 2019. The application is considered admissible if it is submitted by 30 September 2018 and if it is based on the existence of ongoing aggregation processes involving the manager submitting the application. ARERA will check the requests received and grant or deny the requested exemption.
Regarding the second topic, the Regulation establishes that the Energy and Environment Consumer Desk, managed together with the Single Buyer, will deal with complaints concerning issues subject to national regulation in the water sector by means of online procedures. Specifically, the Desk prepares and publishes a complaint submission form on its website and makes online submission methods available through its website by issuing a specific electronic receipt of the submission (article 4.2 of the Regulation). The form and online methods are approved as per the provisions of art. 4.3 of the Regulation upon proposal of the Desk, with resolution of the Director of the Environmental Services Protection of ARERA (see Resolution 2/2018 - DTSA discussed later).
The Regulation enters into force from 1 March 2018 and ceases to be effective on 1 July 2019. There is an exception to the date of 1 March 2018 contained in art. 9.2 of the Regulations, according to which "Managers make available answers to requests for information from the Desk through the Operator - Manager Portal, and, if requested by the Desk, send the answers to the end user without prejudice to any data of a reserved nature". Compliance was achieved on 1 June 2018.
Lastly, in addition to any technical meetings and focus groups, resolution 55/2018/E/idr envisages the convening of two technical round tables the first with consumer and user associations, managers and EGAs aimed at further expanding the procedures for the transformation of the mediation bodies currently operating at a local level - different from the joint mediations - into ADR entities referred to in the Consumer Code; the second with the Regions and the EGA, aimed at expanding further initiatives in support of users to be developed in partnership with the Regions.
In compliance with the provisions of art. 4.2 of the Regulation annexed to resolution 55/2018, with Resolution no. 2 of 23 February 2018 the Director of the Protection of Environmental Services approved the document "Single Portal. Project for the expansion of online services to users of the Integrated Water Service. Online procedure for submitting requests for information-complaints-reports-requests to the Desk and related forms", sent by the Desk to ARERA with a communication dated 23 February 2018.
The document supplements and amends resolution 7/DCCA/2015 "Customer Portal. Online procedure for submitting requests for information/complaints and related forms" and illustrates the revision of the customer and user electronic submission procedure prepared by the Desk and taking into account the changes introduced by resolution 900/2017 (extension of the Single Buyer to the water sector) and the aforementioned resolution 55/2018.
In addition to a new module relating to the bonus for light/gas/water services, ARERA resolution 2/2018 also proposes the following new modules related to the water sector:
- information request;
- Help Desk associations.
The methods of accreditation to the portal by the Managers/Operators were the subject of a specific procedure communicated by ARERA to the managers of the IWS, which, in compliance with the aforementioned art. 9.2 of the Regulations contained in Resolution 55/2018, from 1 June 2018 will have to make available the responses to requests for information from the Desk through the Operator - Manager Portal, managed by the Single Buyer. The procedure referred to above is contained in decision no. 9/DACU/2018 of 29 May 2018 containing "Changes to the regulations of the Operator - Manager Portal and to the User Manual referred to in Resolution 1/DCCA/2017 of 5 January 2017", with which the ARERA updated both the Regulation for Portal operation and the User Manual according to the provisions of resolution 55/2018.
With Resolution 56/2018 ARERA launched a fact-finding investigation concerning complaints and reports sent to ARERA by IWS users, Consumer Associations and local public bodies.
The procedure, which was completed on 31 December 2018, concerns in particular the most recurrent critical issues communicated to ARERA regarding:
- interruptions to the supply of the service due to causes or methods that do not comply with current legislation and/or user contracts;
- delays in the execution of works/connections associated with transfer and/or take-over procedures;
- failure to comply with the frequency and transparency of billing;
- responses to complaints, notifications and requests for information from users (missed responses, inaccurate/generic responses also sent using standard forms, inadequate assistance from call centre operators).
The managers involved in the survey (which will be conducted by the User Protection Department of environmental services in collaboration with the Accountability and Enforcement Department and the Finance Police for possible audits) will be selected based on the number, frequency and relevance of the content of the reports sent to ARERA regarding service problems. On the basis of additional reports sent during the course of the survey the assessment may be extended to other managers.
As part of the survey, the conditions for sanctions and/or regulatory actions will also be assessed.
Lastly, again with regard to consumer protection, we point out DCO 199/2018/R/com "Guidelines for sectoral efficiency and harmonisation of the regulation regarding out-of-court dispute resolution procedures between customers or end users and operators or managers in the sectors regulated by the authority for energy networks and the environment (TICO)" with which ARERA expresses its orientation on the topic (by offering 14 different ideas) and represents some clarifications that apply to the regulation.
The effectiveness of the interventions subject to consultation will start from 1 January 2019, with the exception of the provisions for the water sector which are proposed to be effective from 1 July 2018 (coinciding with the entry into force of the transitional period pursuant to Resolution 55/18). In particular, the application clarifications noted for the water sector can be summarised in the following points:
- ARERA incorporates the definitions of "end user" and "manager" contained in Annex "A" of resolution 655/2015 (RQSII) which regulates the contractual quality of the IWS;
- the attempt at mediation on a voluntary basis during the transitional period can be made by the final user, including condominium users;
- as regards separate management, always in accordance with the provisions of the RQSII on the subject of contractual services, the Authority proposes (making it a point of reference for consultation) that the manager of the water supply is the party that receives requests for mediation in cases of separate management, even if the disputes concern sewerage and/or treatment service;
- in terms of increasing the efficiency of the transitional provision of the Mediation Service for the water sector, ARERA established that in order to avoid the convening of meetings at which it is already know that the manager will not be able to participate, the manager must communicate participation in the procedure within 5 days prior to the scheduled date of the meeting and, in case of refusal or non-confirmation, the procedure is dismissed and the final user is informed of such dismissal (see art. 7 paragraphs 21 and 22 of the document).
Acea S.p.A. submitted a document containing its reflections on the matter through Utilitalia by the date requested (May 4, 2018).
Resolution 14/2018 - DACU Approval of the detailed procedures for the validation of Social Water Bonus requests and the procedures for the recognition of the One-Off quota as per Resolution 21 December 2017, 897/2017/R/Idr as amended.
With Resolution 14 of 10 August 2018, ARERA approved the detailed procedures for the validation of social water bonus requests. These procedures are contained in Annex A, which specifically reports the checks that water managers are required to make on the Request for Benefits (RDA) for the purposes of validation/rejection (OK/KO) of the social water bonus, as well as the list of the reasons for the rejection of the RDA to be used to communicate the details of the RDA rejection to SGAte. The procedures contained in Annex A are divided into fully operational procedures and operating procedures for 2018. Furthermore, the Authority approved the self-certification form (Attachment B) that the user can use to declare that he/she is in the conditions required to obtain the social water bonus.
The provisions of Annex A apply as of 1 September 2018, except for paragraphs 2.3 "Special cases: multi-family dwellings not classified as apartment buildings" and 2.5 Optional fields that will come into force from 1 October 2018. Attachment B containing the self-certification form will be applied starting 1 October 2018. Finally, starting on 31 August 2018 the latest version of the technical specifications relating to the management functions for Suppliers for the applications for the Social Water Bonus on SGAte were made available on the website http://www.sgate.anci.it/. In particular, the document describes both the method of interaction between the water manager and the SGAte system (based on web services) and the method of interaction between the water manager and the SGAte system (based on web-files).
Document for consultation 573/2018/R/idr of 13 November 2018 - Control of the implementation of planned investments for the integrated water service
The document is part of the procedure started with Resolution 518/2018/R/Idr (conclusion scheduled for 30 April 2019) and illustrates the Authority's guidelines for: i) assessing the possible benefits achieved by the manager through the use of regulatory schemes for the promotion of investments even in the presence of their non-execution; ii) taking into account the outcome of the monitoring of the causes of deviations between the investments made and those planned, articulating the current system of rules possibly by providing for the mere recovery of the possible benefits in the absence of responsibility, as well as the application of specific penalties and the recovery of the benefits achieved in the event of persisting difficulties in carrying out the planned investments and with the presence of significant differences; iii) defining further rules that put the managers in charge of differentiated efficiency improvements due to the relative effectiveness in carrying out the planned investments.
In fact, when processing the data received, ARERA found uncompleted planned investments, with deviations more or less significant compared to what was planned in the various ATOs. In particular, the rate of completion of the planned projects was 81.9% for 2014, 77.6% for 2015, 81.7% for 2016 and 88.8% for 2017. The analyses performed by ARERA highlighted the different cases, and in the report the Authority expressed its own guidelines on the matter. Particular attention was paid to the investments connected with the pursuit of targets for improving or maintaining technical quality performance levels.
The deadline for submitting observations was set for 15 December 2018. The Acea Group submitted its observations on 14 December 2018.
Resolution 571/2018/R/idr of 13 November 2018 - Launch of the procedure for monitoring the application of the regulation related to the contractual quality of the integrated water service, as well as for the implementation of the current regulation (RQSII)
The ARERA resolution seeks to strengthen the measures aimed at ensuring the diffusion, usability and quality of the service to users in a uniform manner throughout the country. With this resolution, a procedure was initiated to monitor the application of the regulation of the contractual quality of the integrated water service pursuant to resolution 655/2015/R/idr, as well as for the implementation of the regulations contained therein.
Lombardy Regional Administrative Court judgements on actions brought by certain Operators
In 2013 Acea Ato2 filed an appeal against Resolution 585/2012 (MTT) and subsequent resolutions that amended and supplemented the contents (Resolutions 88/2013, 73/2013 and 459/2013). The appeal was partially upheld by the regional administrative court of Lombardy 2528/2014, against which both Acea Ato2 and ARERA have appealed.
In the public hearing held on 29 September 2015, the suspension of the pending judgement and the postponement of the decision to a later date following the outcome of the technical office consultancy arranged for the appeals proposed in 2014 by Codacons and the associations Acqua Bene Comune and Federconsumatori, considering the existence of a relationship of dependence-consequentiality between the decision of the appeal by ARERA and the decision on appeals promoted by the Consumer Associations, focusing in particular on the tariff component relating to the financial charges of the IWS manager, i.e. on the formulas and parameters implemented in art. 18 of Annex A of Resolution ARERA no. 585/2012/R/idr of 28 December 2012 (MTT), considered as a reintroduction of the criterion of "adequacy of invested capital" that had been eliminated by the outcome of the 2011 referendum.
The expert committee, appointed in October 2015, filed the report on 15 June 2016, concluding that the formulas and parameters aimed at calculating the interest rate of reference are considered reliable and reasonable in terms of national and international regulations and the component of risk coverage considered in the Resolution.
The final hearing in the case was held on 15 December 2016 and sentence no. 2481/2017 was published on 26 May 2017, in which the Council of State accepted the conclusions of the panel of experts and reiterated the full legitimacy of the tariff method adopted by the ARERA, as the definition of the single parameters on the basis of the criterion of efficient cost coverage only and also the different calculation of the tax cost in the water sector compared to the electricity and gas sectors tends to eliminate any performance guarantee, leading to the strict coverage of the cost of invested capital and minimising the user costs, in line with the law and the principle of full cost recovery. This ruling therefore rejected the Codacons and Acqua Bene Comune/Federconsumatori appeals noted above, consequently confirming the original sentences. Following this, the subsequent hearing before the Council of State was set for 20 September 2018. In view of the hearing, Acea Ato2 presented a Memorandum with which, after presenting an overview of the issues that are the subject of the dispute, requested that the Council of State "reject the appeal proposed by ARERA as completely unfounded and confirm the decision of the Regional Administrative Court of Lombardy - Milan, section II, no. 2528/14".
Following the hearing, held as planned on the scheduled date, the Council postponed the discussion of the judgement, inviting the parties to file some briefs (to be presented by 19 December 2018) to make sure that there were no delays in resuming the appeal proceedings. At the hearing in question, however, the judge had not set the date of referral, which was instead established only in the early days of 2019: the next hearing will therefore be held on 13 June 2019.
At the date of this report, in addition to the appeal to the Council of State cited above, the other appeals filed by Acea Ato2 to the Lombardy Regional Administrative Court against Resolution no. 643/2013/R/Idr (MTI) and Resolution 664/2015/R/idr ARERA (MTI-2) are still pending. With regard to the latter, in February 2018 Acea Ato2 extended its original appeal, presenting additional reasons against resolution ARERA 918/2017/R/Idr (biennial update of the tariffs for integrated water service) and against Annex A of resolution 664/2015/R/idr, as amended by the aforementioned resolution 918/2017/R/Idr.