ARERA's Resolution 665/2017/R/idr and its Annex (known as TICSI – Integrated Text for Water Service Charges), although issued in 2017, has not yet been applied in various areas of our country, for a variety of reasons. However, the obligations for Water Service providers to correctly apply these charges remain, and above all, the obligation for ARERA to approve these charges remains.
The TICSI redefines some concepts of the equivalents that had remained somewhat vague in the MTI and MTI2 tariff methods. Redraw the tariff structure specifically for Domestic Customers, also introducing some principles of “fairness” for water services and attempting to standardise bands and charges at a national level. In fact:
• Clearly distinguish between Resident Domestic Users and Non-Resident Domestic Users, a situation that many suppliers, in their own way, were already trying to manage, to safeguard a correct distinction between daily household consumption and that of properties used for holidays and with occasional usage.;
• The “Concessional Annual Consumption Band” become usable Solo for Resident Domestic Users, finding no justification for setting aside this band for Users with intermittent consumption;
• The variable quota of the “Concessional Annual Consumption Band” and of the other bands is calculated based on “per capita consumption” (for the concessional band, 50 litres/inhabitant/day, which is 18.25 cubic metres per year per inhabitant). This is applied according to a correct principle of equity, meaning the larger the family living in the property, the wider the bands will be and the later excess consumption will be applied.;
• Tariffs must be applied proportionately, The Reduced Rate will be equal to the Base Rate minus the Discount, and the Discount granted per cubic metre may vary from 20% to 50% of the Base Rate (the Area Governing Body will decide which Discount to apply, In many areas, a 35% discount is currently being applied);
• The tariff for the last excess band may not exceed 6 times the Concessional tariff, in order to maintain a correct balance between the tariffs of the various bands.
Furthermore, for Non-Domestic Users, ARERA has provided for a redefinition of Categories:
• by merging Commercial and Artisan utilities into a single category;
• identifying the new categories of Non-Distributable Public Users (Educational Institutions of all kinds and grades, Hospitals and hospital facilities, Nursing and Care Homes, Barracks and operational emergency centres, Military and security structures, Other public users which, in any case, perform a necessary service to guarantee the health and physical safety of people, or for which a possible suspension of supply could lead to public order and State security issues, including “fire hydrants”) and Distributable Public Users (other public structures).
It has made some changes to the Annex of Resolution 218/2016/R/Idr (called TIMSII – Integrated Text for the Regulation of the Metering Service Integrated Water Service) – including a reclassification of average domestic consumption based on household composition and the obligation to notify meter readings only for those with inaccessible or difficult-to-access meters;
It has finally introduced a new method for calculating Sewerage and Treatment charges for Industrial Users with discharge permits, to be borne by the Authorities of the Basin Government.
The mandatory remodulation of fees under the new structure, known as “TICSI,” remains in place, with all Water Service operators required to submit data in this new fee structure to the EGA and ARERA for appropriate approval. However, the implementation of this resolution continues to be slow, prompting ARERA to initiate a monitoring procedure for its application (dated 5 December 2018, no. 636).
Indeed, even if some Operators have “ceased to exist by law” or are among those to whom a statutory tariff is applied with Theta=0.9, or for various reasons cannot access the tariff update, this does not relieve them of the obligation to “remodel the tariff according to the TICSI”.
In simple terms, the obligation to submit data (an Excel file prepared by ARERA and named RDT-2018) to the Area Regulatory Authorities remains; and in these files, assuming the projected revenues remain unchanged (i.e. at Isoricavo), a restructuring of tariffs is proposed, in accordance with the principles and structure indicated by TICSI and the guidelines on concessions, on the proportionality of tariffs and on the breakdown of bands dictated by the Area Regulatory Authorities, documenting all this with appropriate recalculations of consumption within the new bands in an analytical manner and justifying the methodologies adopted and the changes to the tariff compared to the previously adopted structure (which, for each user category, may not vary by more than 10% upwards or downwards, Art. 36.6 Annex to Del 664/2015/R/idr).
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