The role of Acquirente Unico in the electricity market

Acquirente Unico (AU) was set up in order to ensure electricity supply to the customers of the captive market (d.lgs n. 79/1999).
In establishing AU, the law-makers took into account that the Italian electricity sector is characterised by vertically-integrated distribution and generation companies. Indeed, the former incumbent and municipally-owned companies are involved in both the generation and distribution business. In this situation, AEEG (the Italian electricity & gas regulator) would have been unable to determine the price of electricity on the basis of the procurement costs of distributors, who would have had no interest in minimising the costs of electricity supply.

Therefore, AU represents a "wedge" between the liberalised segments of generation and sale which avoids the above-mentioned conflict of interest.
With the full opening-up of the market on the demand side, the law-makers provided that small consumers would be entitled to benefit of an "henanced protection" service. Small consumers include households and small businesses connected at low voltage, with less than 50 employees and a yearly turnover not exceeding € 10 million.
Since 1 July 2007, in the new competitive scenario, AU has fulfilled the task of procuring electricity for supply to small consumers not wishing to migrate to the open market.
In accomplishing its procurement task, AU minimises costs and risks by diversifying contracts deadlines and using an adequate mix of fixed - and indexed - price contracts to cover a demand of almost 84 TWh (ca 25% of the national demand) telated to 28 milion customers.
In particular, AU trades in regulated (spot and forward) markets and holds auctions under transparent and non-discriminatory procedures.
AU relies on an energy auction portal (physical bilaterals, contracts for differences, transmission capacity, green certificates and guarantees of origin).
AU acts as any other operator, transferring the prices established in the wholesale market directly to small customers, allowing them to benefit of the competitive energy market.
On a monthly basis, AU publishes the price of sale of electricity to the enanched protection retailers. This provides the market with a transparent price signal, i.e. a benchmark to open-market retailers.
On a quarterly basis, AEEG updates the price of electricity that retailers apply to end users on the basis of the costs incurred by AU. Thanks to this mechanism, the enanched protected consumers, i.e. those who have the lowest individual consumption and an informational gap, take advantage from wholesale market competition.
These market model, fully compliant of the European directives, is supporting succesfull the development the retail market, as shown by the high rates of customers who changed their supplier.
In the past few years, AU's role in the electricity market has been further strengthened with other tasks aimed at: i) providing consumers with information about their rights and market opportunities; ii) making retailing competition work more effectively, by improving the data flow between operators. 



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