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Anna Mallia | Wednesday, 26 November 2008

Electricity rates in Italy

In Italy, companies supplying electricity and gas are in competition to offer the most discounted rates to consumers.
As from 1 July 2007, the European Union gave the go-ahead for the liberalisation of electricity and the EU citizens obtained the right to shop around and buy electricity from the companies that supply it.
In Malta we still do not have the luxury of shopping around and choosing the company that gives us the most advantageous rates, as in the case of mobile phones and telephony in general. In Malta we still have to make do with what Enemalta dictates and we have to make up for Enemalta’s inefficiencies as well. Whereas in Italy the top five electricity companies – Eni, Enel, Edison, Sorgenia and MPE – are at loggerheads with each other as to who offers the most discounts, in Malta it is the other way round.
In Malta electricity rates are going up and not down, and they are going up very fast, dangerously fast. Of course, the rates in Italy are those approved by their regulator which they call “Autorità per l’energia elettrica e il gas (Aeeg)” and the authority establishes the maximum rates every three months.
In Malta, the energy regulator has so far proven to be a non-entity, a figurehead because it is the government that fixes the rates without the prior approval of the regulator.
In Italy consumers are aided in selecting the right electricity supplier. By the end of this year they will have an internet site available which they call the ‘price calculator’, wherein the consumer will log in the number of units they consume in energy and the computer will tell them which is the most advantageous offer that befits their situation.
Even the rates vary according to the time of consumption and place. If you use electricity for your ordinary residence, you pay one rate; if you use electricity for your second residence, the rate is another. If you use electricity during the day the rate is more expensive than if you use it during the night or on weekends.
The regulator in Italy has for example decided that if you consume electricity between seven in the evening and eight in the morning, on Saturdays and Sundays and on public holidays, the rates are cheaper. This is to say that singles who are at home only in the evening after work, or a family who goes to the country or beach home for the weekend, gets cheaper rates because of the time and day that electricity is consumed.
Eni also offers the consumer a scheme wherein the rates are fixed for two years and that for the first year, the rate is €0.101/kWh and for the second year it is €0.099/kWh. Of course this system is risky as the fuel prices can go down but the consumer will still be bound to pay the same rates; it can also go up and this type of arrangement will in this case work well for the consumer.
But the fact remains that help is provided to the consumer when it comes to him choosing what is most suitable to his particular situation.
And in Malta? They all speak and shout about the new electricity and water tariffs and when you browse on the internet you find a lot of talk and no substance because to date not even the regulator has had the decency to publish information to the consumers as to what the new electricity tariffs are. We heard a lot about surcharge and other duties but when it comes to the nitty-gritty, the consumer is still left in the dark as to how much he is being charged retrospectively on consumption of water and electricity.
Of course negotiations are still being held, at least that is what they tell us. But the consumer is not being adequately informed of the fate of his budget, and that means he cannot make any plans on what and where and how much to spend from his income.
I am sure that you have noticed, as I have, when you go in certain shops and get the feeling that you are in a state of war: with the electricity switched off or left to a bare minimum. It is not a nice feeling at all: it is so depressing and it reminds us of the days when, during the oil crisis of the 70s, the government had introduced tight measures regarding consumption, so that Malta was practically left in the dark.
Only this time round, the government is giving the impression of ta feel-good factor by lighting more streets and putting out more Christmas lights and decorations, as if their consumption is not being forked out by us consumers.
So we have a situation where the feel-good factor that the government is trying to instil in us contrasts sharply with the economy in the use of electricity by shop owners and hair salons. As one hairdresser told me, “my work goes to the water and electricity and I regret the day that I opened the salon, because I earned more money when I worked from home”.
And this is precisely what the system is telling us: if you are honest and law-abiding you will be penalised in this country. There is no incentive for people to come out clean and pay taxes: the incentives are there for those who avoid taxes altogether.
In this situation the question is whether it is still feasible for a small country like Malta to continue to supply energy to the Maltese through one service provider such as Enemalta, or whether we should go for liberalisation, or scrap and close Enemalta altogether and buy electricity from another member state such as Italy.
The question is very complex indeed, but the consumer does not care about the prestige of having the supply coming from a Maltese company such as Enemalta Corporation. All the consumer wants is to pay less in electricity and water tariffs at the end of the month.
We owe a lot to the internet because the internet allows us to check what our politicians are preaching. And if in Italy, consumers have the luxury of shopping around when it comes to choosing their energy supplier, I do not see why in Malta we can be deprived of such a luxury. The arguments made by the government to substantiate its decision for the increase in tariffs, are a waste of time and energy as Italy has provided all the counter-arguments.


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