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Italian power, natural gas tariffs to rise 5% on January 1

Barcelona (Platts)--29 Dec 2017 704 am EST/1204 GMT


Italy's power, gas and water regulator, Autorita per l'energia elettrica il gas e il sistema idrico, said Friday it will increase both regulated domestic gas and power tariffs 5% from January 1.

* Power hike largest since Q2 2012

* Gas increase driven by seasonality, regional markets

AEEGSI said the power bill for the typical consumer would rise 5.3% in the first quarter, while the typical gas bill will increase by 5.0%.

The power tariff rise was the largest since a 10.4% increase for the second quarter of 2012 while the gas tariff increase was the highest since the fourth quarter of 2014, according to regulator data.

AEEGSI said its reference price for first-quarter electricity would be Eur0.20626/kWh (25 cents/KWh), up from Eur0.19589/kWh in the fourth quarter, with 49% of the tariff related to the cost of procurement, 19% for distribution, metering and related, 20% for system costs (generally renewable incentives,) and 13% for taxes.

The regulator said there were nine factors which had contributed to rising wholesale prices during the fourth quarter. Those included increased end-user demand, reduced imports of French power as a result of nuclear plant outages, low hydro caused by the driest year in 200 years, and higher regional wholesale gas prices.

Domestic costs such as balancing, likely expenditure on interruptible contracts from next year -- the mechanism for which was still awaiting clearance from the EU -- and increased costs for essential plants also contributed to the tariff increase, AEEGSI said.

For natural gas, AEEGSI said the reference price for the typical consumer would be Eur7,669 per cu m in the first quarter, up from Eur0.7305/cu m in the fourth quarter of 2017, with 41% of that corresponding to raw material costs, 38% taxes, 18% transport and metering and 3% for system costs.

The quarter-on-quarter increase was largely due to seasonality, the regulator said, with increased regional demand and prices impacting the scenario for Italy.

--Gianluca Baratti, newsdesk@spglobal.com

--Edited by Dan Lalor, daniel.lalor@spglobal.com




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