Résumé

Price regulation has been a traditional device of Italian government intervention in production and distribution of electricity. The pillars of this intervention were essentially two: i) to make prices correspond to the generation and distribution costs on the basis of end-users’ different consumptions and ii) to use electricity tariffs as a tool for macroeconomic interventions, such as, for instance, freezing tariffs to curb inflation. The structure of electric rates did not change up to the 1990s: it was a two-block tariff based on power and energy consumption of different classes of consumers – in other terms, it was calculated on the average price rather than on the marginal price, contrary to what was the case in other European countries since the Sixties. Government intervention got larger after nationalization (1962): on the demand side, already in 1959 a single national tariff for similar consumers’ profiles was introduced; later in the Sixties and in the Seventies, poorer consumers were supported through reduced rates. On the supply side, government used fares to favor investment in innovation by cross subsidizing energy produced by more efficient plants. In the Nineties, the policy of regulation moved towards a more market oriented approach - price cap - with the aim of opening the market to new competitors and having them exploit the gains induced by innovation. Actually this intervention stimulated the entry of new firms even though it maintained a crucial role for the former public monopoly, ENEL, in the domestic market; besides, it did not reduce the level of price as expected, nor the rate structure, still characterized by cross subsidizing among different classes of consumers and charged with “improper burdens” by government.