Annual Report 2011 - Snam

Snam Annual Report 2011 / Main factors of the pricing framework29The transportation, regasification of LNG, storage and distribution of natural gas are regulated by theElectricity and Gas Authority, which has been operative since 1997, and is responsible for the regulationof the national electricity and natural gas markets. Among its functions are the calculation and updatingof the tariffs, and the provision of rules for access to infrastructures and for the delivery of the relativeservices. The following are the primary tariff components for each of the regulated activities carried outby Snam, based on the regulatory framework in force as at 31 December 2011.TRANSPORTATION REGASIFICATION STORAGE DISTRIBUTIONEnd of regulatoryperiod• 31 December 2013 • 30 September 2012 • 31 December 2014 • 31 December 2012Calculation of netinvested capitalrecognised for regulatorypurposes (RAB)• Revalued historical cost • Revalued historical cost • Revalued historical cost• Deduction of restorationcosts recognised• Revalued historical cost• Parametric method forcentralised assetsReturn on net investedcapital recognisedfor regulatory purposes(pre-tax WACC)• 6.4% (transportation)• 6.9% (metering)• 7.6% • 6.7% • 7.6% (distribution)• 8% (metering)Incentives on newinvestments• 1% over 5 years(on safety investments)• 2% over 7/10 years(on capacity upgradeinvestments)• 3% over 10/15 years(on entry capacityupgrade investments)• 2% over 8 years(on expanding existingterminals by lessthan 30%)• 3% over 16 years(on expanding existingterminals by morethan 30%)• 4% over 8 years(on upgradingexisting capacity)• 4% over 16 years(on developing newstorage fields)• 2% over 8 years(on replacing cast-ironpipes and renovatingodorisation systems)Efficiency factor(X FACTOR)• 2.1% on operating costs • 0.5% on operating costs • 0.6% on operating costs • 3.2% on distributionoperating costs• 3.6% on meteringoperating costsGas demand• 15% of revenues exposedto change in demand• 10% of revenues exposedto change in demand• No exposure to changein demand• No exposure to changein demandSnam Annual Report 2011