Financial Statements of ACEA S.p.A. Consolidated Financial Statements of the ACEA Group

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(1)WorldReginfo - 86f5056d-fda3-4c81-9e82-bd4acaa4f22c. Financial Statements of ACEA S.p.A. Consolidated Financial Statements of the ACEA Group.

(2) 2010 Financial Statements of ACEA S.p.A. Consolidated Financial Statements of the ACEA Group. Acea SpA Registered office Piazzale Ostiense 2 – 00154 Rome Share capital 1,098,898,884 euros, fully paid-up Tax code, VAT number and Rome Companies’ Register no. 05394801004. Prepared by Planning and Finance Editorial coordination External Relations and Communication Graphic design, editing and copyediting Message Photographs Acea archives Fabio Anghelone Printed by Union Printing Printed in April 2011. WorldReginfo - 86f5056d-fda3-4c81-9e82-bd4acaa4f22c. Registered in Rome at REA no. 882486.

(3) Contents Report on operations The ACEA Group. 8. Corporate bodies. 10 11. 99. Relations with Roma Capitale: public lighting service. 99. New regulations for excavation works. 99 99. Chairman’s statement. 12. Decreto Rinnovabili (Renewable Energy Decree). ACEA Group financial highlights for 2010. 18. SAO. Group operating review. 19. Risks and uncertainties. 100 101. Network Industrial Area. 19. Regulatory risk. 101. Energy Industrial Area. 57. Legislative risk. 108. Water Industrial Area. 64. Strategic risk. 110. Environment Industrial Area. 70. Photovoltaic risk. 111. Operational risk. 112. Litigation risk. 113. Economic and financial review. 77. Group economic results. 78. Group financial position and cash flows. 84. Other Information. Operating (and financial) outlook. 120. Shareholder resolutions. 122. 95. Performance of the international share markets and ACEA shares. 95. Medium/long-term incentive plans. 97. Relations between ACEA and GdF SUEZ. 97. Ohsas 18001:2007 Certification. 98. Technological innovation projects. 98. Contents. 3. WorldReginfo - 86f5056d-fda3-4c81-9e82-bd4acaa4f22c. Equity investments held by Directors and Statutory Auditors. Significant events after the balance sheet date.

(4) Financial Statements of ACEA S.p.A. Income statement. 126. Statement of comprehensive income. Report of the Board of Statutory Auditors. 229. 126. Independent auditors’ report. 239. Balance sheet - Assets. 127. Balance sheet - Liabilities. 128. Certification of separate financial statements in accordance with art. 154-bis of Legislative Decree 58/98. 241. Cash flow statement. 129. Statement of changes in shareholders’ equity. 130. Notes to the financial statement Form and Structure of the Financial Statements. 132. Accounting standards, revisions, interpretations and improvements applied from 1 January 2010. 141. Notes to the Income Statement. 146. Notes to the Balance Sheet. 157. Related Party Transactions. 189. Update on major disputes and litigation. 193. Additional information on financial instruments and risk management policies 204 Commitments and contingencies. Annexes 1. Analysis of net debt at 31.12.10. 208 213 215. 2. Statement of movements in investments at 31.12.10 216 3. Related party transactions pursuant to CONSOB Resolution 15519 of 27 July 2006 218 4. Non-recurring material transactions pursuant to CONSOB Resolution 15519 of 27 July 2006. 224. 5. Positions or transactions deriving from unusual and/or exceptional transactions 225 6. Segment information (IAS 14). 4. Contents. 226. WorldReginfo - 86f5056d-fda3-4c81-9e82-bd4acaa4f22c. Accounting standards, amendments and interpretations applicable after the end of year and not adopted in advance 145.

(5) Consolidated Financial Statements 244. Aggregate Consolidated Income Statement. 245. Statement of Consolidated Financial Position - Assets. 246. Statement of Consolidated Financial Position - Liabilities. 247. Consolidated Cash Flow Statement. 248. Statement of changes in consolidated shareholders’ equity. 249. Notes to the financial statements Basis of Presentation and Consolidation. 250. Accounting standards and policies. 251. Accounting standards, revisions, interpretations and improvements applied from 1 January 2010. 261. Accounting standards, amendments and interpretations applicable after the end of year and not adopted in advance by the Group 266 Consolidation policies and procedures. 267. Basis of consolidation. 269. Financial Highlights of Companies accounted for under Proportionate Consolidation. 270. Segment Information. 272. Notes to the Consolidated Income Statement. 272. Notes to the Consolidated Balance Sheet Assets. 291. Notes to the Consolidated Balance Sheet Liabilities. 313. Service Concession Arrangements. 327. Related Party Transactions. 348. Update on major disputes and litigation. 353. 385. Annexes 1. List of consolidated companies. 386. 2. Reconciliation of shareholders’ equity and net profit for the year ended 31 December 2010 in the consolidated and separate financial statements. 390. 3. Remuneration of Directors, Statutory Auditors and Key Managers. 391. 4. Information provided pursuant to CONSOB Ruling 6064293. 393. List of significant investments at 31 december 2010 (art. 120, Paragraph 4, legislative decree 58/98). 414. Independent auditors’ report. 423. Certification of consolidated financial statements in accordance with art. 154-bis of Legislative Decree 58/98. 426. Corporate governance and ownership structure report. 429. Additional disclosures on financial instruments and risk management policies 366 Commitments and contingencies. 381. Contents. 5. WorldReginfo - 86f5056d-fda3-4c81-9e82-bd4acaa4f22c. Consolidated Income Statement.

(6) mancano traduzioni. RICAVI CONSOLIDATI. 3.599,7. 666,5. milioni di euro. milioni di euro. +22,0%. +18,8%. EBIT. UTILE NETTO. 317,9. 136,2. milioni di euro. milioni di euro*. +71,7%. * prima dell’attribuzione a terzi di €7,9 mln e dell’adeguamento a fair value delle attività discontinue riferite allo scioglimento della joint venture nell’energia per 36,2 mln. WorldReginfo - 86f5056d-fda3-4c81-9e82-bd4acaa4f22c. EBITDA.

(7) WorldReginfo - 86f5056d-fda3-4c81-9e82-bd4acaa4f22c. Report on operations.

(8) The ACEA Group. The ACEA Group The share capital of ACEA S.p.A. at 31.12.10 is broken down as follows:. 10%. Municipality of Rome Market. 13%. Caltagirone Group. 51%. GDF Suez Group. 26%. 8. Report on operations. WorldReginfo - 86f5056d-fda3-4c81-9e82-bd4acaa4f22c. The chart only shows shareholdings exceeding 2%, as demonstrated by Consob.

(9) As at the same date, the Group structure comprises the following main companies:. Acea Holding. Water. Energy. 96%. Acea Ato 2. 94%. Acea Ato 5. 96%. Samese Vesuviano 37% Gori. 100%. Crea Gestioni. 40%. Umbra Acque. 55%. Acque Blu. 86%. Ombrone. 59%. Environment. 100%. Acea Risorse e Impianti per l’Ambiente. 100% AE Elettricità. 74%. Aquaser. Acea8cento. 50%. Ecomed. AceaElectrabel 50% AE Produzione 84% AE Trading. 100%. 40% Acquedotto del Fiora. 69%. Acque Blu Arno Basso. 69%. Acque Blu Fiorentine 40% Publiacqua. 35%. Intesa Aretina 46% Nuove Acque. 1%. Networks. 100%. 50% Acea Distribuzione. Ingegnerie Toscane. 25%. Consorcio Agua Azul. 51%. Aguazul Bogota. 100%. Acea Dominicana. Acea Reti e Servizi Energetici 51% Ecogena. 100%. Acea Illuminazione Pubbllica. 50%. Acea Distribuzione. Other services. 100%. LaboratoRI. Report on operations. 9. WorldReginfo - 86f5056d-fda3-4c81-9e82-bd4acaa4f22c. 45% Acque.

(10) Corporate bodies. Corporate bodies Board of Directors Chairman Giancarlo Cremonesi. Chief Executive Officer Marco Staderini. Directors Paolo Giorgio Bassi Francesco Caltagirone Jean Louis Chaussade Aldo Chiarini Paolo Di Benedetto Luigi Pelaggi Andrea Peruzy. General Manager 1 Paolo Gallo Board of Statutory Auditors 2 Chairman Enrico Laghi. Corrado Gatti Alberto Romano. Alternate Auditors Leonardo Quagliata Claudio Valerio. Independent Auditors Reconta Ernst & Young SpA. Executive Responsible for Financial Reporting Giovanni Barberis. 10. Report on operations. 1 (appointed by the Board of Directors at the meeting on 27 October 2010; office actually taken up on 1 February 2011) 2 (appointed by the Shareholders’ Meeting on 29 April 2010). WorldReginfo - 86f5056d-fda3-4c81-9e82-bd4acaa4f22c. Standing Auditors.

(11) Equity investments held by Directors and Auditors as at 31.12.2010. Name and Surname. Investee. Shares owned as at 31/12/2009 (2). Shares purchased. Shares sold. or as at 29/04/2010 (3). Shares owned as at 31/12/2010 (3) or as at 29/04/2010 (2). Directors 1) Giancarlo Cremonesi (*). ------------. ------------. ------------. ------------. ------------. 2) Marco Staderini (*). ------------. ------------. ------------. ------------. ------------. 3) Paolo Giorgio Bassi (*). ------------. ------------. ------------. ------------. ------------. 4) Francesco Caltagirone (**). Acea SpA. 25,000. 30,000. 5) Paolo Di Benedetto ( **). ------------. ------------. ------------. ------------. ------------. 6) Jean Louis Chaussade (*). ------------. ------------. ------------. ------------. ------------. 7) Luigi Pelaggi (*). ------------. ------------. ------------. ------------. ------------. 8) Andrea Peruzy (*). ------------. ------------. ------------. ------------. ------------. 55,000. 9) Aldo Chiarini (**). ------------. ------------. ------------. ------------. ------------. 10) Massimo Caputi (1). ------------. ------------. ------------. ------------. ------------. 11) Pierre Clavel (****). ------------. ------------. ------------. ------------. ------------. 12) Marco Maria Bianconi (****). ------------. ------------. ------------. ------------. ------------. 13) Enrico Laghi. ------------. ------------. ------------. ------------. ------------. 14) Alberto Romano. ------------. ------------. ------------. ------------. ------------. 15) Corrado Gatti. ------------. ------------. ------------. ------------. ------------. 16) Leonardo Quagliata. ------------. ------------. ------------. ------------. ------------. 17) Gianluca Marini. ------------. ------------. ------------. ------------. ------------. 18) Maurizio Lauri (***). ------------. ------------. ------------. ------------. ------------. 19) Francesco Lo Pomo (***). ------------. ------------. ------------. ------------. ------------. 20) Roberto Pertile (***). ------------. ------------. ------------. ------------. ------------. 21) Claudio Valerio (***). Acea SpA. 500. ------------. -----------. 500. 22) Claudio Bianchi (***). ------------. ------------. ------------. ------------. ------------. (*) director re-appointed by the shareholders’ meeting on 29/04/2010 (**) director appointed by the shareholders’ meeting on 29/04/2010 (***) statutory auditors in office to 29/04/2010 (****) director in office to 29/04/2010 (1) director stepping down from office on 08/03/2010 (2) date to be considered for directors and statutory auditors in office to 29/04/2010 (3) date to be considered for directors and statutory auditors in office from 29/04/2010. Report on operations. 11. WorldReginfo - 86f5056d-fda3-4c81-9e82-bd4acaa4f22c. Statutory Auditors.

(12) Chairman’s statement. The Chairman. Chairman’s statement The severe economic crisis that hit the western markets over the last three years has left the major industrial groups with very difficult decisions to make. An uncertain future, a crisis of market confidence and the looming threat of an outof-control recession has constantly generated complex scenarios which need to be assessed, complicating the job of those with the huge responsibility for making the final decisions. Acea has come through this delicate phase, and continues to do deal with it on the basis of a principle of great responsibility and by applying the values which have guided it through the water and energy markets for more than a century. In particular, that responsibility and those values characterise its link with the local area, and make Acea an undisputed leader in terms of Roman development and the flagship of the domestic economy at European level. But this responsibility and those values are also the foundation of a long and illustrious company history, and demand the utmost respect for what Acea has acquired under its trademark – now also modernised graphically – in terms of knowledge, technology, cost-effectiveness and, not least, personal and professional relations.. 2010 was a year in which the difficulty of these choices and the subsequent sacrifice required by shareholders were fully rewarded by extremely satisfying results. The serious approach adopted towards the 2009 balance sheet has, therefore, enabled Acea to overcome the crisis, and exit it in a stronger and more stable position than when the crisis struck. The full implementation of investments, combined with essentially stable markets has, in fact, allowed our Group to achieve better than expected economic results. And the importance of the number of products is borne out by the Revenues/Gross Operating Profit ratio, which recorded its best ever performance for Acea this year. Now we’ll take a look at a summary of the 2010 figures. Consolidated revenue amounted to 3,600 million Euros, the best result in the company’s 102 year history. In fact, the best margins were also recorded in absolute. 12. Report on operations. WorldReginfo - 86f5056d-fda3-4c81-9e82-bd4acaa4f22c. Solely on the basis of this great sense of responsibility, the 2009 financial statements closed, not without difficulty, with a significant liability. A liability that reflected the necessary prudence regarding provisions. The urgency of closing the tax deferment. Which revealed, in particular, the courageous priority of continuing to carry out investments, in view of their crucial role in times of crisis, for Acea and the areas in which it operates..

(13) terms; consolidated Gross Operating Profit (ebitda) stood at 667 million Euros compared to 561 million Euros in 2009, as with the Group operating profit (ebit), which amounted to 318 million Euros, or 72% above last year’s figure. Consolidated net profit was also very important, reaching 92.1 million Euros, after an IAS entry relating to some assets held for sale of 36.2 million Euros. In 2010, Acea spent more than 470 million Euros on investment, in order to guarantee efficiency and development for the region and for users, dedicating (i) more than 200 million Euros to the water segment, in order to permit the forecast tariff development and to consolidate its position as domestic leader, (ii) roughly 110 million Euros to the distribution of electricity, to ensure constant improvement in the quality and continuity of service, (iii) approximately 50 million Euros to the Environment and Energy segment, to develop capacity as regards waste-to-energy, disposal of sludge produced by agricultural activities, biomass and special waste treatment and (iv) around 50 million in the electricity generation segment. In addition, a significant contribution to environmental sustainability came in the form of the allocation of more than 10% of the amounts required by the Investment Plan to the renewable energy sources sector (photovoltaic and cogeneration).. The above information presents us as a major group. In fact, Acea is currently among the few European companies able to boast the single “A” area rating from 3 rating agencies, which reflects both sound business and its similarly strong financial and equity structure. The year 2010 also saw the agreement to terminate the energy partnership with GDF Suez. Following said agreement – signed on 31 March – the Acea Group acquired full control of electricity and gas sale activities, and full ownership of the plants transferred in due course under the joint venture. Instead, trading companies and the other electricity generation companies with the associated assets, previously subject to the joint venture, exited the Group perimeter given transferred to the former partner. The conclusion of this energy partnership with GdF Suez will allow Acea to focus on new growth opportunities. These may include room for gas distribution in the Roma Capitale (Municipality of Rome). In said light, any successful tender bid would allow Acea to own management of the city’s water, electricity and gas networks, and. Report on operations. 13. WorldReginfo - 86f5056d-fda3-4c81-9e82-bd4acaa4f22c. Special attention and effort will again be dedicated to new projects such as Public Lighting, with an ambitious project involving more than 40,000 new lighting points for Roma Capitale (Municipality of Rome) and Smart Grid experimentation, for increasingly greater efficiency in terms of electricity distribution and energy savings. 2010 also saw the termination of the Joint Venture with GDF Suez, which will allow us to increase our presence in the electricity sales sector, without compromising generation, thanks to shrewd hedges..

(14) Chairman’s statement. so create significant operating synergies. However, we must await publication of the call for tenders in order to be able to fully assess any potential participation in the bid. In this regard, the recent publication in the Official Journal of the Decree of the Ministry of Economic Development on the “Determination of the regional areas in the natural gas distribution sector”, constitutes one of the main prerequisites, whilst we await another provision which will lay down the rules that local administrations must comply with in awarding the contract for the service.. The context certainly was and continues to be one of crisis, in which market uncertainties continue to weigh heavily. But our Group has clearly demonstrated that it has not taken a passive stance when faced with its many problems. And the strength of its initiative certainly does not signal the end of the drive in this financial year in terms of achieving a high level of satisfaction. In fact, the results achieved provide the basis for the major new challenges Acea intends to face with steely determination. The aforementioned resolution of the disputes related to the French partnership and consolidation of the strong economic and financial position now represent the basis for the challenging targets set out in the 2011-2013 industrial plan. In confirming a strategy to strengthen all core sectors, this plan also provides the Acea Group with new ambitious goals. The main feature of the plan is the definition of organic growth which leverages principally on efficiency. Work to rationalise the organisational and industrial. 14. Report on operations. WorldReginfo - 86f5056d-fda3-4c81-9e82-bd4acaa4f22c. Moreover, it appears to be necessary to focus, even just briefly, on the referendums called regarding the management of water resources, on which voters will be required to vote next June. Public consultation will determine the methods for the award and management of local public services of economic importance and the duration of the return on invested capital as regards the criteria for calculation of the tariff for the integrated water service. As regards the first referendum question – which proposes the full repeal of the contents of article 23-bis of decree-law no. 112 of 2008, as amended by decreelaw no. 135 of 2009 (also known as the “Ronchi Decree”) – the risks resulting from a potential repeal are clear. The legislative framework outlined with the “Ronchi” Decree had, in fact, largely resolved the interpretative uncertainty of the previous legislative framework and its repeal would again leave room for extremely detrimental instability for sector operators. In relation to the second referendum question, a successful repeal – which as regards the constituent elements of the water services tariff would remove that of an adequate return on invested capital – would require a profound rethink of the role of the water services operator, at least regarding the system of financing investments..

(15) structure targeted at an improvement in the operating efficiency of the Areas and the Parent Company, also with the objective of fully exploiting all assets. The second founding element of the plan is the repositioning on the downstream market. This is to be achieved through: optimisation of the customer mix; increase in efficiency and effectiveness in energy sales; realisation of the dual-fuel offers; and the development of professional sourcing and trading skills. If we look at the end of the three-year period, the new plan projects consolidated EBITDA in 2013 at a healthy 865 million Euros – without the contribution from extraordinary transactions and considering the energy perimeter in the absence of the partnership with GDF Suez. The average annual growth of EBITDA forecast in the three-year period is 11%. An ambitious plan, but no less solid and credible considering the extraordinary stability demonstrated by the Group in the past year. A robustness which is also recognised at European level, when we consider that Acea is one of the few preeminent Italian companies to boast three single A area ratings. On the other hand, ambition and responsibility have always been distinctive traits of this historic company which now, more than ever, I am proud to represent before shareholders and the country. As regards the complex recessionary trend which characterises the current western economic phase, 2009 may be considered the year in which the financial crisis of the previous year stopped having painful repercussions on the real economy.. On the other hand, the commitment to other sectors, including those very different from electricity distribution and not strictly linked to economic trends, provides our Group with complete solidity. In fact, Acea boasts a position of domestic leader in the water sector and operates successfully in the Environmental sector with increasingly more plants for the development of waste and renewable energy sources. But concentrating solely on this data would now be extremely limiting. The deeper roots, and at the same time more serious consequences of the economic crisis, reflect the dramatic decrease in confidence that now afflicts all markets and increasingly wider parts of civil society. The road to rebuilding this confidence will inevitably incorporate the creation of value and a sound approach to governance.. Report on operations. 15. WorldReginfo - 86f5056d-fda3-4c81-9e82-bd4acaa4f22c. The consequences for energy consumption could definitely not be avoided, even though the repercussions for Acea were not as heavy as other companies that continue to operate in more industrial areas..

(16) Chairman’s statement. Acea is tackling this issue with utter determination. In particular, this year Acea wanted to deploy every effort to avoid eroding in any way, but instead increase its extraordinary industrial, economic and social value for the region. Clear proof of this is the positive contribution from all the Group’s industrial areas – the liberalised activities of the Joint Venture with GdF Suez excepted –thanks to which Acea’s Gross Operating Profit in 2009, net of non-recurring components, was limited to 4.2%, despite the considerable reduction in consumption. Creating confidence requires prudence. Hence 2009 closed with significant provisions to cover any possible future risk. We are talking about risks linked to previous financial years which must, at a delicate and strategic time, not hinder the company’s efficiency and development in any way. But creating confidence calls for courage in particular. Thus, investments increased by more than 100 million Euros compared to 2008, despite the macro-economic context and the “tax deferment” imposed by the European Union, which deducted 110 million Euros from the economy and Group liquidity.. Therefore, 2009 closed against a backdrop of prudence and courage, sacrificing dividends in the awareness that the right way to tackle the crisis and help the economic recovery is not by boasting brilliant results – which Acea could easily do – but through the protection and enhancement of its values, its services and its territory. Now we’ll look at a summary of the 2009 economic results. Consolidated revenue stood at 2,954.3 million Euros, the decrease relating to the result of activities tied to the Joint Venture with Gas de France Suez which also discounted the fall in the quantities of energy produced together with the simultaneous decrease in consumption and the price. The Consolidated Gross Operating Profit (EBITDA) amounted to 563.9 million Euros. This included: Water (42%); Networks (41%); Energy (12%); Environment and Energy (5%). The Group’s Operating Profit (EBIT) came to 185.9 million Euros, compared to 385.0 million Euros in 2008. As already partly touched upon, said result was heavily. 16. Report on operations. WorldReginfo - 86f5056d-fda3-4c81-9e82-bd4acaa4f22c. And investments will continue at the same pace in 2010 too, with around 500 million Euros planned, distributed as follows: 40% to the Water segment, in order to permit the tariff development envisaged and consolidate the position as domestic leader; 20% to Electricity Distribution, to guarantee constant improvement in service quality and continuity; 25% for the Environment and Energy segment, to develop the capacity as regards waste-to-energy, disposal of sludge produced by agricultural activities, biomass and special waste treatment; and lastly, 15% for the development of Renewable Energies, mainly wind, photovoltaic and cogeneration..

(17) shaped by not only the decrease in EBITDA but: the increase in amortisation and depreciation (up 21.6 million Euros), rise in investments (+ 100.8 million Euros); higher impairment charges (up 15.9 million Euros); and by higher provisions made necessary for the correct assessment of tax and/or legal risks deriving from previous years. Consequently, the pre-tax result stood at 100.9 million Euros and the Group’s net result, after allocations to third parties, was a negative 52.5 million Euros. It should be noted that the overall economic impact on the 2009 consolidated financial statements of the recovery of the so-called “tax deferment” stood at 78.9 million Euros, net of use of the appropriate fund of 31 million Euros. The normalised tax rate for the year, net of extraordinary events, stood at 42.9%, compared to 42.3% in 2008. Investments carried out in 2009 totalled 518.1 million Euros, marking an increase of 100.8 million Euros over 2008. These are broken down between: Networks for 187.9 million Euros (36% of the total); Water for 177.4 million Euros (34% of the total); Environment and Energy for 89.4 million Euros (17% of the total); Energy for 39.8 million Euros (8% of the total); Parent Company for 23.6 million Euros (5% of the total). The figures and decisions illustrated herein depict a forward-thinking industrial Group, ready to make sacrifices in the full awareness of its value and the importance it holds for its shareholders and its region.. The commitment is focused on facing international competition to expand its gas distribution services; to maintain a significant position as domestic leader in the management of Integrated Water Services; to offer advanced solutions in the development of waste which represents an increasingly urgent problem for the relevant area; to develop the increasingly significant renewable energy sector at a sustained rate. Ambitious projects pursued with caution. Rather than distribute dividends, at such a delicate time, we have decided to strengthen our reserves and promote investments to revive absolute values on the market and grasp the opportunity for strategic partnerships. We are confident in the soundness and quality of the decisions taken, and are certain that in the next few years Acea will distribute significant dividends, and hence appeal to all those that want to acquire a stake in the company and in its undertakings.. Report on operations. 17. WorldReginfo - 86f5056d-fda3-4c81-9e82-bd4acaa4f22c. 2010 and the subsequent years will present significant challenges, that will see Acea ready to grasp the many opportunities it is shaping up for..

(18) ACEA Group financial highlights. ACEA Group financial highlights at 31.12.10 31.12.2010. 31.12.2009 Restated. Change %. Consolidated revenue. 3,599.7. 2,951.3. 22.0%. Consolidated operating costs. 2,941.9. 2,392.6. 23.0%. 8.7. 2.2. 288.2%. 666.5. 560.9. 18.8%. Profit (loss) from commodity risk management EBITDA EBIT Net profit/(loss) Profit/(loss) attributable to minority interests. 317.9. 185.2. 71.7%. 136.2. (47.0). 389.6%. 7.9. 5.5. 42.2%. Net profit/(loss) attributable to the Group. 128.3. (52.6). 344.2%. Fair value adjustment of discontinued operations. (36.2). 0.0. (100.0%). 92.1. (52.6). 275.3%. Net invested capital. 3,585.0. 3,416.3. 4.9%. Net Debt. 2,203.7. 2,129.6. 3.5%. Consolidated Shareholders’ Equity. 1,381.3. 1,286.7. 7.0%. Net profit (loss) attributable to the Group after the fair value adjustment of discontinued operations. Amounts are shown in millions of euros. It should be noted that the figures shown above do not take into account the classifications required by IFRS 5, with the exception of the fair value adjustment of dis-. 18. Report on operations. WorldReginfo - 86f5056d-fda3-4c81-9e82-bd4acaa4f22c. continued operations..

(19) Andamento gestione. Group operating review Networks Industrial Area Electricity demand in Italy in 2010 (326,165 GWh) in-. In said context, net domestic production (286,531 GWh). creased slightly by 1.8% compared to the same period. recorded an increase of 1.9%, while the balance of im-. in the previous year. Domestic production met 86.5% of. ports fell by 2.3%. With the exception of hydroelectric. Italy’s requirements (66.8% from thermoelectric plants,. sources, all sources of domestic production reported. 15.1% from hydroelectric sources and 4.6% was gen-. an increase compared to the same period last year.. erated from geothermal and other renewable energy. The wind power segment (+29.1%) and photovoltaic. sources) whilst the remaining 13.5% was covered by. production (+136.3%) registered particularly significant. imports.. increases.. 1.1.2010 31.12.2010. 1.1.2009 31.12.2009. Change 2010-2009. GWh. GWh. %. Gross production. 49,369. 52,844. –6.6. hydroelectric. 222,157. 216,087. +2.8. thermoelectric. 5,031. 5,015. +0.3. geothermal. 8,374. 6,484. +29.1. wind power. 1,600. 677. +136.3. photovoltaic. 286,531. 281,107. +1.9. (of which: CIP 6 production). 36,939. 44,011. -16.1. Import. 45,761. 47,070. -2.8. 1,817. 2,111. -13.9. 43,944. 44,959. -2.3. 4,310. 5,798. -25.7. 326,165. 320,268. +1.8. Export Balance of imports Consumption for pumping systems Electricity demand * * Source: Terna – December 2010, monthly report on the electricity system.. Report on operations. 19. WorldReginfo - 86f5056d-fda3-4c81-9e82-bd4acaa4f22c. Electricity demand in Italy as at 31.12.2010.

(20) Group operating review. Electricity transmission During 2010, the overall amount of electricity injected. The remainder of the year was characterised by moder-. into ACEA Distribuzione’s network (from the national. ate weather conditions in September, October and No-. transmission grid, generating plants that are directly. vember (followed by reductions in electricity demand of. linked to ACEA Distribuzione’s network and from ENEL. -4.07%, -2.39% and -0.17% respectively). The weather. Distribuzione’s interconnected network) decreased by. got partially worse in December, with a subsequent in-. 0.69% compared to the same period last year1. This av-. crease in electricity demand of 2.77% (an increase also. erage change is lower than the trend-based one estab-. aided by the effects of the calendar).. lished in the 2010 budget, estimated at +0.24% (devia-. The graph below shows the trend in the reference tem-. tion determined by comparing the estimated figure in. perature recorded in 2010 and the average monthly dif-. the 2010 budget for energy injected into the network. ference of said parameter calculated in the correspond-. with the same figure provided at the end of 2009).. ing months of 2009 and 2010.. Peak demand on Acea Distribuzione’s network during 2010 amounted to 2,398 MW, which was recorded at 1.00 pm on 20 July 2010. This is up approximately 141 MW, or +6.25%, on the peak of 2,257 MW recorded in the same period last year, at 1.00 pm on 17 July 2009. Electricity demand recorded on Acea Distribuzione’s network in 2010 was mildly affected by harsher weather conditions (with deviations in the reference temperature, TDR2, peaking in May, of -2.92°C, and September -2.65°C) and a higher number of working days (five more working days than the last calendar year3). Weather conditions and the calendar clearly had an impact in March and April, in which electricity demand recorded increases of 2.03% and 1.40% respectively, in and June, mild temperatures led to a fall in electricity demand of 5.06% and 2.05% respectively. July and August were characterised by contrasting weather conditions, which saw temperatures alternate from the highest in July (with an average variation of +5.13%) and the mildest temperatures in August (with an average variation of -5.87%).. 1. Data provided at the end of 2009. 2 The reference temperature (TDR) is defined as the weighted average of the daily temperature highs and lows which better reflects the effect of the weather on electricity demand. The reference temperature trend shown in this report was drawn up on the basis of updates to historical series’ carried out following the drafting at the end of the half in 2010. 3 The calendar is assessed by counting the number of weekdays, holidays and pre-holidays distributed throughout the year.. 20. Report on operations. WorldReginfo - 86f5056d-fda3-4c81-9e82-bd4acaa4f22c. response to colder temperatures. By contrast, in May.

(21) TDR 2010 30. 4.00 25. 3.00 2.00. 20. 1.00 15. 0.00 -1.00. TDR. TDR (reference temperature) change. TDR (reference temperature) change 5.00. 10. -2.00 5. -3.00 -4.00. 0. January. February. March. April. May. June. July. August. September. -0.29. 0.47. -0.76. -0.95. -2.92. -0.49. 0.76. -1.51. -2.65. 7.59. 8.37. 10.72. 14.22. 17.35. 21.82. 26.36. 25.18. 20.76. October. November. December. 0.69. 0.23. -1.22. 16.56. 12.97. 8.26. The following table shows the monthly percentage variations of electricity injected into ACEA Distribuzione’s network, which were calculated on the basis of the volumes recorded in 2009 and 2010, as recorded by the related metering system (raw series) and as resulting from the calculations4 made in order to counterbalance the effects of the said weather conditions and the different calendar days (purified series):. Variazioni percentuali mensili – serie “grezza”, serie “depurata” 2010 vs. 2009. Jan.. Feb.. Mar.. Apr.. May. Jun.. Jul.. Aug.. Sep.. Oct.. Nov.. Dec.. Total. “Raw” series. -0.76%. 0.33%. 2.03%. 1.40%. -5.06%. -2.05%. 5.13%. -5.87%. -4.07%. -2.39%. -0.17%. 2.77%. -0.69%. “Purified” series. -0.41%. -0.09%. -0.08%. -0.11%. -2.62%. -1.41%. 3.30%. -2.48%. 2.86%. -0.73%. -0.55%. 0.87%. -0.10%. The following table shows the monthly sequence of electricity injected into ACEA Distribuzione’s network during 2010,. Energia immessa nella rete Acea [GWh] 2010 vs. 2009. Jan.. Feb.. Mar.. Apr.. May. Jun.. Jul.. 2010. 1,043.70. 953.76. 995.44. 893.22. 919.74. 972.59. 1,196.37. 2009. 1,051.71. 950.64. 975.65. 880.85. 968.78. 992.92. 1,137.95. Aug.. Sep.. Oct.. Nov.. Dec.. Total. 969.21. 971.48. 960.87. 970.03. 1,054.31. 11,900.72. 1,029.66. 1,012.70. 984.41. 971.67. 1,025.92. 11,982.86. These electricity amounts were intended to cover the. Municipality of Saracinesco. There are also sales and. needs of the utilities supplied by the above-mentioned. injections of energy between the ACEA Distribuzione’s. network, i.e. the customers of the free and protected. network and ENEL Distribuzione’s networks at some LV,. markets and of the market subject to additional safe-. MV and HV interconnection points.. guards, as well as the so-called underlying distributors, which are represented by the electricity company of the 4. Energy figures which discount the impact of the weather and the calendar were calculated by using de-climatisation, de-calendarisation and de-seasonalisation parameters updated after the close of the half in 2010.. Report on operations. 21. WorldReginfo - 86f5056d-fda3-4c81-9e82-bd4acaa4f22c. together with the same series for 2009:.

(22) Group operating review. With regard to FY 2010 and as compared to 2009, the following table illustrates the above-mentioned aspects, with further specification of the contribution given by Acquirente Unico S.p.A. and by the import supply:. Market subject to additional safeguards. Free market. Underlying distributors. Total. AU Source. Other Sources. GWh. GWh. GWh. GWh. GWh. 2010. 4,117.32. 432.38. 7,348.17. 2.85. 11,900.72. 2009. 4,485.52. 432.38. 7,062.25. 2.71. 11,982.86. With regard to import supply, as from 1 January 2002. Development - that sets out the assignment of transmis-. ACEA Distribuzione signed an agreement with the Vati-. sion capacity shares to the interconnection with foreign. can City State (that was renewed on 6 July 2006) in force. countries for the Vatican City State and the Republic of. from 1 January 2007 to 31 December 2011, for the op-. San Marino).. timised management of imported electricity assigned. In this context, the Company undertook to provide tech-. to it (established by Terna, in accordance with the indi-. nical services linked to the management of underlying. cations provided by the Italian Authority for Electricity. utilities to the above-mentioned State, as well as to ra-. and Gas, based on the Decree issued by the Ministry for. tionalise and improve any related electricity network. Productive Activities – now the Ministry for Economic. and plant.. On 24 December 2007 the Italian Authority for Electric-. thority issued Resolution ARG/elt no. 76/09 that imple-. ity and Gas issued Resolution no. 333/07 regarding the. ments the observations received from the entities con-. third regulatory period from 2008 until 2011.. cerned, by amending Annex A of Resolution no. 333/07. Resolution no. 333/07 introduces and governs four dif-. of 19 December 2007, with the postponement of the. ferent types of regulation, amending the two pre-exist-. relevant deadlines for the termination of the procedure. ing ones and supplementing the current legislation, as. pursuant to paragraph 22.4, Annex A for 2008 and the. follows:. deadlines pursuant to point 2 of Authority Resolution no.. 1. Regulation of prolonged or extended outages;. ARG/elt 168/08 of 25 November 2008.. 2. Individual standards regarding the number of outages for MV customers; 3. Regulation of the total duration of long outages without advance warning; 4. Regulation of the average number of long and short outages.. The main changes can be summarised as follows: • change in the selection rule of exceptional long outages starting in “periods of perturbed conditions”, with the introduction of a threshold for the number of outages that is necessary in order to identify the “periods of perturbed conditions” (upper limit), by mak-. 22. On 27 April 2009, the Authority issued the reference doc-. ing a distinction between low voltage and medium. ument DCO 9/09 “Electricity distribution service continu-. voltage;. ity – Urgent review of some provisions concerning the. • exclusion of all long outages without advance warn-. regulation of the number of outages without advance. ing which start in periods of perturbed conditions,. warning and the 2008-2011 trend levels”.. with regard to the number of outages, similarly to the. Following the end of the consultation process, the Au-. provisions in force for short and temporary outages;. Report on operations. WorldReginfo - 86f5056d-fda3-4c81-9e82-bd4acaa4f22c. Service quality.

(23) • extension of the above-mentioned provisions to the. • exclusion of outages due to thefts from electric-. duration of outages, excluding all long outages start-. ity distribution plants, from Title 7 of the Integrated. ing in periods of perturbed conditions;. Code.. • postponement of the deadlines set out in point 2 of Resolution ARG/elt 168/08 for the delivery of conti-. Reporting activities in 2009 were concluded within the. nuity data and the calculation of starting and trend. deadlines established beforehand by the Regulator (by. levels for distribution companies, pursuant to para-. 31 March 2010). The results of the aforementioned re-. graph 30.1 of the Integrated Code, which opted for. porting were ratified with Resolution ARG/elt 205/10 of. three-year levels of continuity indicators, instead of. 22 November 2010 known as “Definition of continuity. two-year levels;. recovery amounts of electricity distribution services for. • postponement of the deadlines and obligations provided for with regard to service continuity, which are. 2009”, and an incentive of 7,023,755.17 euros was assigned to Acea Distribuzione.. relevant for the procedure concerning service continuity for 2008;. Regulatory Framework 8 January 2010 – By means of Resolution GOP 1/10,. ply point, separating them from the electricity transport. the Italian Authority for Electricity and Gas (hereinafter:. costs on the distribution networks.. the Authority), adopted a three-year strategic plan for. This obligation, running from 1 July 2010, is justified by. 2010-2012. The main goals to be achieved by these reg-. the following:. ulations are as follows:. • most sellers have not fulfilled the obligation, as per. • promoting and developing competitive markets, in-. Resolution ARG/elt 167/08, to provide the Authority. cluding by harmonising the electricity and gas mar-. with the data on the average monthly electricity pric-. kets, restricting the power of dominant players;. es on the final market, with the procurement costs,. of infrastructural services; • protection of customers with respect to energy services by means of the full openness of markets, and developing the levels of service quality and safety; • promotion of the idea to use energy in a reasonable manner and environmental protection; • supervision of the proper application of the rules with respect to the regulated parties; • strengthening the consultation instruments with operators and consumers; • increasing operating effectiveness and internal operations within the Authority.. network costs and measurement costs, general system charges and taxes separated out, by 45 days from the end of each quarter; • by Resolution ARG/elt 202/09, sellers must indicate the following in the invoices sent to their end customers: - separation out of individual price components making up the payments invoiced if the end customer so requests; - detailed information, at least on an annual basis, of the components owed to cover the costs incurred in the general interest, and the general charges incurred by the system.. 8 January 2010 – By means of resolution ARG/elt. 2 February 2010 – By means of Resolution ARG/elt. 1/10, the Authority established that distribution com-. 8/10, the Authority requested a notice to be included. panies would have to notify the sellers of the separate. as an Annex to the bills issued to domestic customers. values of the A, MCT and UC components for each sup-. who have electronic meters, commissioned and repro-. Report on operations. 23. WorldReginfo - 86f5056d-fda3-4c81-9e82-bd4acaa4f22c. • supporting and promoting efficiency and good value.

(24) Group operating review. grammed on a time-period basis. This notice, regarding the most recent two billing periods prior to application (which will start on 1 July 2010) of PED (energy and dispatching prices) fees, which will vary in accordance with. • disconnection of the supply upon request of the end customer (D01); • reconnection/restoration of supply following suspension for non-payment (R01).. the time period, must contain the following:. Specifically, by this resolution, the reference market. • for the second last billing period (from 1 March 2010),. where the provisions apply regarding the standardisa-. an information sheet (Annex A) containing details on. tion of communication flows was established, confirm-. application of the two-hourly PED prices;. ing, in accordance with consultation document (DCO). • at the last billing period (from 1 May 2010), an infor-. no. 35/09 proposals, its extension to all the LV and MV. mation sheet (Annex B) which, along with the details. customers, even though at the consultation stage, com-. already provided in Annex A, will note the option of. ments were made to the effect that the range of ap-. accepting offers with two-hourly prices upon request. plication should be limited to the free market and the. or accepting offers with temporary two-hourly prices,. market subject to additional safeguards.. with a greater degree of gradualness in the differen-. Regarding the introduction of the advanced instruments. tial between the F1 slot and the F23 slot, in accor-. (AtoA type and/or portal), resolution ARG/elt 13/10 pro-. dance with parameters that will be defined after the. vided for the following time-frames:. consultation process initiated by consultation docu-. • supply of an advanced instrument starting from 1. ment no. 36/09.. October 2010 for distribution companies with more. 3 February 2010 – By means of Resolution ARG/elt. • use of PEC files with attached files in Excel format. 10/10, the Authority implemented procedures to define. or equivalent (not owned) or CSV starting from 1. the standards regarding the communication flows be-. March 2010 for distribution companies with less than. tween electricity distributors and sellers with respect to. 100,000 customers at 31 December 2009.. the metering data regarding the timed and non-timed. Compliance with the aforesaid time-frames may be. supply points. This procedure completes the process. waived in the event of early input subject to agreement. which, following consultation document no. 14/07, led. between the parties, of an advanced instrument, in or-. to formalisation, in accordance with resolution ARG/elt. der to favour an increase in the efficiency of the infor-. 162/08, of the flows of supply point customer informa-. mation flows in any case.. tion. As regards how to determine the communication. In addition, the aspects governed by this provision in-. standards in question, the Authority announced the. clude the provision regarding the definition of batch re-. commissioning of a work group that will include the in-. quests, for which processing can be carried out within. terested parties, and the issuing of subsequent consul-. one working day from receipt, establishing that batch. tation documents.. requests are those that number more than 20. This is in line with the provisions of DCO 35/09, but was objected. 4 February 2010 – By means of Resolution ARG/. to by certain operators, who wanted to fix the number. elt 13/10, the Authority introduced provisions regard-. at 2 when they were consulted.. ing the standardisation of the contents and operation of. Finally, resolution ARG/elt 13/10 refers, to subsequent. the communication flows between electricity distribu-. provisions, the definition of arrangements regarding the. tors and sellers for the commercial quality services gov-. following:. erned by Annex A to resolution no. 333/07 (hereinafter:. • minimum obligatory sequence of the messages;. TIQE - Integrated Code to regulate the quality of electric-. • minimum contents of each information exchange;. ity distribution, sales and measurement service):. • inadmissibility reasons for the requests governed by. • making technical data that can be acquired by reading a meter unit available (M01); • making other technical data available (M02);. 24. Report on operations. the TIQE.. WorldReginfo - 86f5056d-fda3-4c81-9e82-bd4acaa4f22c. than 100,000 customers at 31 December 2009;.

(25) 11 February 2010 – By means of Resolution no. 4/10, the Authority approved the Annual Operating Plan for. ciency situations following completion of the allocation of the retroactive bonus quotas.. 2010, which includes the operating objectives originat-. In addition, resolution ARG/com 25/10:. ing from the strategic objectives indicated in resolution. • noted that the Authority will issue a provision in the. GOP 1/10 (Three Year Strategic Plan 2010-2012). The Op-. future to define the procedures to validate the elec-. erating Plan provides specific facts on the resolutions. tricity bonus requests, with identification of stan-. and documents for consultation that are scheduled to. dardised means of checking the admissibility require-. be issued every four months.. ments for the electricity bonus;. Along with the Operating Plan, the Authority added the. • modified resolution ARG/elt 185/09, regarding subsi-. calendar of readings and information flows falling on. dies for the people affected by the seismic events in. regular dates attached to the resolution in question.. the province of L’Aquila, noting the provisions pursuant to paragraph 13.1, in the sense of specification. 19 February 2010 – By means of Resolution VIS 8/10, the Authority ordered the operators to fulfil the obligations to gather the economic and asset data of the separate annual accounts pursuant to resolution. of the compulsoriness of the payment of the bonus allocation; • corrected the errors in table 8 of the resolution ARG/ com 211/09.. no. 11/07 (unbundling) for 2007 and 2008, providing for the staggered opening of access to the computerised. 25 February 2010 – By means of Resolution VIS. communication system in accordance with the follow-. 12/10, the Authority authorised the 3 inspection visits. ing time-frames:. to the electricity distribution companies regarding tariff. • the parties that, while having already implemented. regulation, to be carried out by 31 December 2010. The. the computerised input of separate accounting data,. inspections will involve:. have still not completed transmission of this data as. • the correct tariffs for the services;. of 1 February 2010 (including the parties from the. • application of the tariff components related to over-. final deadline of 19 March 2010; • the parties who must send the separate accounting data, or their assignees, who, as at 1 February 2010, still have not started input of this data, must input that data and send it starting from 29 March 2010 and by the final deadline of 7 May 2010.. heads in general; • management of the cases and allocation of the electricity bonus; • statements on the ways to check the general restrictions and equalisation measures; • consistency of the aforesaid statements with the energy budget.. 25 February 2010 – By means of Resolution ARG/. 8 March 2010 – With consultation document DCO. com 25/10, the Authority modified resolution ARG/elt. 2/10, the Authority presented its final guidelines on the. 117/08, regarding provisions on the supply of the elec-. checks to carry out on the distribution companies, in or-. tricity bonus. In fact, paragraphs 7.2, 7.3 and 7.4 of An-. der to assess the existence of the conditions necessary. nex A of the resolution ARG/elt 117/08 were abolished,. to obtain the Ic incentive, provided under paragraph. regarding payments for situations of insufficiency of the. 12.1 of resolution no. 292/06, in the event of achiev-. invoice amounts with respect to the payments made.. ing the objective of installing and starting up electronic. This modification incorporated the findings made by dif-. meters for a number of LV supply points with available. ferent electricity sellers, including through notification. power lower or equal to 55 kW, equal to 85% of the to-. by the FederUtility association, regarding:. tal. Previously, resolution ARG/elt 190/09 dealt with the. • the operational difficulties, and the high finance costs. matter, regulating:. that would result from a changed billing system; • the progressive decrease in the number of insuffi-. • the means to carry out the controls at the offices of the Authority;. Report on operations. 25. WorldReginfo - 86f5056d-fda3-4c81-9e82-bd4acaa4f22c. Acea S.p.A. group), must do so no later than the.

(26) Group operating review. • the option, for distribution companies that apply by. ity level trends established by the Authority for the dif-. 31 March 2010, to postpone the due date for check-. ferent territorial areas.. ing achievement of the 85% objective to 31 Decem-. In addition, the Equalisation Fund for the Electricity Sec-. ber 2010, against obtaining an incentive reduced to. tor (hereinafter: Fund) was charged to pay the aforesaid. 2/3 of the total.. incentives, in accordance with the yield available sup-. DCO 2/10 confirmed the controls in place noted in the. plied by the UC6 tariff component.. previous consultation document DCO 22/09, entailing. As regards Acea Distribuzione S.p.A., incentives of. the assessment:. 7,191,664 euros were allocated.. • of the commissioning of the electronic meters installed on the LV supply points; • of implementation of updates of the changes in numbers of the LV end-users on a continuous basis; • of registration of all the LV customers actually disconnected as disconnections; • of registration of the disconnected LV customers. 25 March 2010 – By means of Resolution ARG/elt 39/10, the Authority presented the procedure and criteria for attribution of the incentive treatment pursuant to paragraph 11.4 letter d) of Annex A of resolution no. 348/07 (hereinafter: TIT - Transport Code), with respect to automation, protection and control of active MV net-. equipped with these electronic meters using elec-. works.. tronic meters.. The provision identifies the purpose of the incentive in. Therefore DCO 2/10 provided the specifications on the. the presentation of the pilot projects, to be presented by. check-list of controls that will be carried out at the of-. 30 September 2010, regarding the promotion and devel-. fices of the distributors, giving information:. opment of smart grid technology. This indication differs. • on the documentation to provide before actually car-. from what had previously been provided by the TIT, to. rying out the controls; • on the means to check compliance.. the extent that: • it narrows the previous concept of investments, also. The date by which comments and suggestions should. including the investments already in place, replacing. be sent to the Authority was scheduled for 09 April 2010.. it with the pilot projects; nological innovations on the distribution networks. 32/10, the Authority postponed the expiry date for the. that can benefit:. valuation of the relief service provided by the distribu-. - the distributed generation;. tors to 1 July 2010, in accordance with paragraph 10.2 of. - the active participation by the customers;. resolution ARG/elt 341/07, with reference to the power. - the rational use of the energy;. failures that are not significant accidents and that re-. - the support of electrical mobility;. gard HHV/MV or HV/MV transformation plants connect-. - the improvement of the quality of the service.. ed directly to the National Grid (hereinafter: RTN).. The ARG/elt 39/10 resolution identifies the following as. In addition, ARG/elt 32/10 resolution provided for imple-. the requirements for admissibility to the incentive treat-. mentation of a procedure for the definition of the way to. ment:. manage the aforesaid financial items for the service pro-. • the definition of the project as the concrete demon-. vided for continuous service, and the top limit amount. stration in the field of MV distribution networks in op-. for incentives and penalties for transmission service. eration;. continuity.. • the presence of energy flux reversals on the network, from inactive to active, for at least 1% of the annual. 22 March 2010 – By means of Resolution ARG/elt. operating time, with reference to an active MV net-. 34/10, the Authority determined the total incentives. work, or alternatively, to a portion of the active MV. and penalties for 2008 for the continuity of the electricity distribution service, in accordance with the continu-. 26. Report on operations. network; • provision for a control/regulation system of the volt-. WorldReginfo - 86f5056d-fda3-4c81-9e82-bd4acaa4f22c. • it expands the smart grid concept, including all tech19 March 2010 – By means of Resolution ARG/elt.

(27) age on the network and a system that can ensure automatic recording of the significant technical signals;. plied with the obligation to communicate to the Fund or not;. • the use of non-proprietary communication protocols.. - the volume of service supplied, or the number of. In order to value the aforesaid pilot projects, the ARG/. supply points powered by low voltage, and the. elt 39/10 resolution therefore provided, in accordance. electricity levels supplied, equal to the data com-. with paragraph 11.7 of the TIT, for the appointment of. municated to the Fund, or if this communication. an expert commission to attribute the incentives in ac-. has not been made, from the most recent data. cordance with the ratio between the expected benefits. communicated to the Authority or to other admin-. and the expected costs.. istrations; - the value of the penalties for failure to comply with. 25 March 2010 – By means of Resolution ARG/elt. the electronic meter installation levels required,. 40/10, the Authority determined the 2008 amount of. officially putting the number of electronic meters. revenue equalisation for the low voltage metering ser-. installed at 0 (zero).. vice, pursuant to article 40 of the TIT, and the quantification of the RPMm penalty, in relation to the degree. 25 March 2010 – By means of Resolution ARG/elt. of discharge of the electronic meter installation obliga-. 41/10, the Authority, with which it updated the econom-. tions pursuant to paragraph 8.1 of resolution no. 296/06.. ic terms of the sales service subject to additional safe-. Acea Distribuzione S.p.A. was assigned a payment to. guards, with reference to the second quarter of 2010. the benefit of the Cassa (Fund) of 10,589,215.59 euros,. (April – June), also changed the equalisation of the cost. to which RPMm penalties of - 2,783.04 euros should be. of purchasing electricity used internally for transmis-. added. In addition, the ARG/elt 40/10 resolution:. sion and distribution pursuant to paragraph 13quater. • changed the TIT:. of Annex A to resolution no. 156/07 (hereinafter: TIV -. - with the change in the expiry date for sending the. Retail Service Code), with the addition of the acknowl-. general equalisation data to the Authority and/or. edgement to the distributors that procure an amount of. the Fund. These data are no longer scheduled for. costs equal to those which would have been incurred. 31 July, but 30 days from availability of the relative. for the purchase of electricity from the operators sub-. forms or the data collection computer system;. ject to additional safeguards.. ties, charged to the distribution companies and. 26 March 2010 – By means of Resolution ARG/com. to be applied if the equalisation data sent are. 44/10, the Authority updated the tariff components for. changed after the equalisation amount has al-. the cover of the general charges and further charges. ready been notified by the Authority or the Fund. for the electricity and gas sectors (A, UC and MCT tariff. to distributors;. components) with reference to the 2nd quarter of 2010. • this resolution introduced, to Annex A of the ARG/. (April-June), specifically establishing:. elt 40/10 resolution, the criteria for the official de-. • the reduction of the A2 tariff component in accor-. termination of the equalisation amount of revenues. dance with the estimates for the charges from nucle-. for the low voltage metering service, for that which. ar power expected for 2010;. concerns:. • the increase in the A3 tariff component, in light of the. - calculation of the gross financial increases and. increasing charges for the PV energy plant incentives;. value of the accumulated depreciation amounts. • the reduction of the A4 tariff component, due to the. pursuant to paragraph 40.1 of the TIT, equal to 0. elimination of certain special tariff structures in ac-. (zero) in the event of no communication;. cordance with Law no. 99/2009.. - the number of electromechanical meters installed. In addition, by resolution ARG/com 44/10 a material er-. at the low voltage supply points, distinguishing. ror in the TIT was corrected, in the part regarding pay-. them in accordance with whether they have com-. ments for the transmission service (art. 16).. Report on operations. 27. WorldReginfo - 86f5056d-fda3-4c81-9e82-bd4acaa4f22c. - with the introduction of administrative indemni-.

(28) Group operating review. 29 March 2010 – By means of Resolution no. 2/10,. or equal to 20 (known as batch requests), and in real. the Authority established the operating instructions re-. time for requests of less than 20.. garding communication standards between electricity sellers and distributors with reference to the following. 7 April 2010 – By means of Resolution VIS 20/10,. commercial quality supplies, regulated by the TIQE:. the Authority postponed the term for the completion of. • making technical data that can be acquired by read-. the enquiry on the application of the regulation regard-. ing a meter unit available (M01); • making other technical data available (M02);. ing the electricity bonus to 30 June 2010. This regulation was implemented by Resolution VIS 141/09.. • disconnection of the supply upon request of the end. sion for non-payment (R01).. 52/10, the Authority defined some lists of end-user internal grids, in line with provisions set out by Art. 33 of. With respect to the M01 flow, the Authority considered. Law 99/09, while setting out, in particular:. the opinions of certain operators, to exclude its appli-. • a first list of end-user internal grids consistent with. cability to LV and MV end customers with availability of. provisions set out by Art. 33, paragraph 1, of Law no.. power higher than 55 kW and with time treatment.. 99/09, i.e.:. Therefore, by resolution no. 2/10 the Authority con-. - an existing grid, or a grid in which, at the same. firmed what had been proposed during the consultation. date, the development works have been started or. stage, as regards:. all authorisations, as per regulations in force, have. • the communication flow sequence that provides for: - sending the request to the distributor;. been obtained; - connection of industrial end consumers, or con-. - verification of the admissibility of the request by. nection of industrial end consumers and electric-. the distributor and if negative, the distributor will. ity production units essential for the industrial pro-. have to send the inadmissibility message, giving. duction process, provided that they are included. the reasons, the same day as the request arrives if. in local areas composed of no more than three. single, or by the following working day in the event. adjoining municipalities, or no more than three. of batch requests. If there is a request that does. adjoining provinces. This only applies in the event. not pass the admissibility check, the distributor. the production units are powered by renewable. will cancel it, while the vendor will send a new re-. sources;. quest if necessary; - the distributor will send the result of the requested execution of the service. • the communication flow fields, in which the introduction of the “dispatching contract code” is noted as an optional field; • the reasons for inadmissibility, adding, with respect to DCO 35/09, further reasons “POD matched to a dif-. - no obligation of third-party connection, provided that each subject included in the same network has the right to connect, as an alternative, to the grid with compulsory connection by third-parties; - connection through one or more connection points to a grid with compulsory connection by third-parties, having a nominal voltage not lower than 120 kV;. ferent customer than the one noted in the request”. - presence of a subject in charge, acting as sole. and “disconnection outside working hours not appli-. manager of the same grid, with the possibility that. cable as it is not a temporary LV connection”.. this subject may differ from the owners of the con-. In addition, Resolution no. 2/10 governed:. sumption or production units, but is not the owner. • standardisation of the objective of the PEC and the. of electricity transmission and dispatching or dis-. type of files attached to this;. 28. 12 April 2010 – By means of Resolution ARG/elt. tribution concessions.. • the admissibility check time-frames, establishing a. • a second list of grids characterised by a compulsory. delay of no more than one day for requests higher. connection of third parties. In this case, they are in-. Report on operations. WorldReginfo - 86f5056d-fda3-4c81-9e82-bd4acaa4f22c. customer (D01); • reconnection/restoration of supply following suspen-.

(29) frastructures to which, based on the previous rules,. 19 April 2010 – By means of Resolution VIS 24/10,. subjects other than distribution companies were. the Authority set out the supplement of the proceed-. connected;. ing started with resolution VIS 72/09 with respect to the. • a third list includes grids for which the following is to. company Acea Distribuzione S.p.A. relating to a breach. be provided for:. of the regulations governing the availability for sellers of. - check of connection data of the first end con-. data for withdrawal points not treated on a time-period. sumer; - check of terms set out by Art. 2 of the Legislative Decree no. 115/08 on end-user efficient systems. • a fourth list of grids is composed of grids that are. basis, as per paragraph 18.3 of the TIV. This proceeding follows the outcome of inspections provided for by resolution VIS 16/09, performed on 4 and 5 June 2009 in compliance with resolution VIS 16/09.. deemed not eligible to be included in the list of end-. These inspections highlighted the following:. user internal grids as they are not compliant with. • the 20-day term from the recording or the metering. terms set out by Art. 33, paragraph 1, of Law 99/09,. attempt was not observed for the sending of data to. but for which special assessments are under way.. sellers, as per paragraph 18.3 of TIV, Table 2; • information as per Table 2 is incomplete, and in par-. 19 April 2010 – By means of Resolution ARG/elt. ticular, the following is not reported:. 56/10, the Authority set out some amendments to Annex. - incremental values of active energy supplied by. A (TIT) and B (TIC) to Resolution no. 348/07, in order to: • facilitate the connection for the supply of heat pumps for household heating; • facilitate the dissemination of private recharge infrastructures for electric vehicles. The above-mentioned targets are functional in: • the achievement of primary energy savings objectives;. time period (line 3 of Table 2); - quantity of differential active electricity, by time period, recorded from the last metering (line 4); - incremental values of totally supplied reactive energy (line 5); - quantity of differential reactive electricity, recorded from the last metering (line 6); - quantity of differential reactive electricity, by time. • the increase in the use of renewable energy;. period, for the withdrawal points with available. • the limitation of CO2 emissions.. power higher than 16.5 kW (line 7).. Therefore, this resolution provides for the overcoming of:. Moreover, inspections also assessed the application, for. • the limit set out by paragraph 5.2 of TIC, thus allowing. of time period treatment instead of hourly treatment,. to request a second electricity input points for the. in breach of the provision set out by Art. 4 of Annex A. separate powering of heat pumps with respect to the. to resolution ARG/elt 278/07 (hereinafter: TILP), whose. primary supply for households, also with an available. entry into force, after subsequent postponements, was. power higher than 3.3 kW;. lastly fixed by resolution ARG/elt 135/09 to 1 April 2009.. • obstacles to the installation of private recharge infra-. The assessment of this harmful conduct has therefore. structures for electric vehicles, through:. determined the start-up of the proceeding under evalu-. - the application of paragraph 5.2bis of TIC, which. ation and the matching of this proceeding with the one. makes an exception to uniqueness of the with-. started by resolution VIS 72/09.. drawal point for infrastructures destined for the private powering of electric vehicles;. 19 April 2010 – With consultation document DCO. - the explicit extension to the above-mentioned in-. 7/10, the Authority submitted the following proposals. frastructures as well as of the possible inclusion. to amend rules on incentives for transmission services,. amongst applications connected, or pertinent to. which were provided for with resolution no. 341/07:. households for domestic contracts as per para-. • the valuation of mitigation services rendered by dis-. graph 2.2, letter a), item ii) of TIT.. tribution companies for service continuity, with the. Report on operations. 29. WorldReginfo - 86f5056d-fda3-4c81-9e82-bd4acaa4f22c. supply points with available power higher than 55 kW,.

(30) Group operating review. provision of a two-fold hypothesis of decreasing mitigation according to the duration of power failure, thus indicating either: - the application of the entire reduction compared to the total amount acknowledged immediately after the first four hours of power failure; or - the application of a unit value adjusted according to time periods (e.g.: 8-hour time periods).. from data related to sellers; - the ownership and responsibility of managing and maintaining the database is granted to distributors; - companies selling on a market subject to additional safeguards are legally separated from companies selling on a free market; • the possibility of rendering a joint distribution service. • the application of the compulsory issue of monitoring. of natural gas and/or electricity, with the distribution. indicators of availability and non-availability of grid. of various types of gas through networks or the man-. elements. It is proposed that these elements disclose. agement of other network infrastructures for the ren-. the annual time percentage in which the grid element. dering of public services, provided that distribution. is in a temporary radial set-up, compared to the pe-. and metering is maintained detached from selling;. riod of time in which the grid element is an integral. • the cancellation of metering activities from activi-. part of the HV grid.. ties subject to functional unbundling, so as the latter, according to provisions set out by the Authority,. 20 April 2010 – By means of Resolution ARG/elt. is charged to distribution companies for which out-. 57/10, the Authority introduced amendments to rules. sourcing restrictions in data processing and relevant. on unbundling, according to resolutions of the Council. information are still effective;. of State taken on 16 December 2008, which highlighted. • the possible creation of the “combined system op-. the partial illegality of provisions on functional unbun-. erator”, within a vertically integrated operator, deal-. dling.. ing with both electricity transmission and distribution. In view of the removal of some restrictions on functional. services.. unbundling currently provided for in Annex A to resolu-. Moreover, resolution ARG/com 57/10 modified some. tion no. 11/07 (hereinafter: TIU), the resolution approved. provisions on administration and accounting separation,. before the consulting proceeding started by DCO 32/09. while introducing simplified ways of drafting separate. has therefore provided the following amendments:. annual financial statements for operators of small en-. • a time limit of 31 December 2014 is fixed for provi-. ergy sources and self-producers.. independent operators; • the title of independent operator is extended to leading operators as well;. 30. 22 April 2010 – By means of Resolution GOP 19/10, the Authority established the contribution for 2010 for the running of said Authority, confirming, for each party. • the repeal of paragraph 12.2 of TIU, regarding the. operating in the electricity and gas sectors, the rate ap-. definition by the Authority of the binding guidelines,. plied in previous years, equal to 0.3 per thousand euros. while acknowledging that this provision is excessive. of revenue booked to the financial statements approved. compared to provisions set forth by the EU regula-. for the previous year (2009).. tions. Resolution ARG/com 132/08 is therefore can-. In addition, the GOP 19/10 resolution:. celled. This resolution included the above-mentioned. • confirms that the only payment method for the 2010. guidelines, and set out that independent operators. contribution is through bank transfer made to the ap-. had to draw up and send the binding guidelines to. propriate current account of the Authority by 31 July. the Authority;. 2010;. • the possibility of having one single database of dis-. • indicates the date of 15 September 2010 as the term. tributors and sellers included in a vertically integrat-. to send data regarding contribution. These data shall. ed company, provided that:. be sent through the IT system developed following. - data related to distributors are logically separated. resolution GOP 35/08.. Report on operations. WorldReginfo - 86f5056d-fda3-4c81-9e82-bd4acaa4f22c. sions on functional unbundling and related action of.