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Role of regulators and regulation in a (typical) restructured electricity industry - page 8 / 21

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The Italian Authority for Electricity and Gas – September 20038

Role of regulation in generation competition/2

Wherever the generation expansion is remained more or less centralised, in the process for the planning of commissioning new capacity, regulators evaluate the projects and should have the authority to approve a project prior to its implementation. During project evaluation, the regulatory body should proceed not only from economic point of view (lowest possible implementation cost) but also take into consideration other circumstances such as the necessity of using domestic energy resources enhancement of the energy safety of the country.

In the case of free generation activity, regulators have the role to define a clear and stable market design associated with clear and stable tariff system as well, where the periodical review of tariff parameters is operated on the basis of sound rules ex-ante declared and transparently applied.

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