Jacopo Torriti, Luca Lo Schiavo, Elena Fumagalli

RIA in the practice of an Independent Authority - The experience of Italian Regulatory Authority for Electricity and gas

  • Abstract

Informations and abstract

Keywords: regulatory impact assessment, independent authorities, quality of service, electricity

In the last ten years Regulatory Impact Analysis has become "the" instrument providing groundwork for evidence-based regulatory decisions in most developed countries. However, to an increase in quantity, it did not correspond an increase in quality. In Italy, Regulatory Impact Analysis has been in place for ten years on paper, but in practice it has not been performed consistently. Of particular interest is the case of independent regulatory authorities, which have been required to apply Regulatory Impact Analysis since 2003. This paper explores how Regulatory Impact Analysis is carried out, by examining in depth how an individual case - on the Regulation for Quality of Service - was executed by the Autorità per l'energia elettrica e il gas. The aim is to provide a picture of the process leading to the final Regulatory Impact Analysis report, rather than just a study of its content. The case illustrates how Regulatory Impact Analysis, when properly employed, can be an important aid to the regulatory decision, not only by assessing ex ante the economic impacts of regulatory proposals in terms of costs, benefits and risks, but also opening the spectrum of policy alternatives and systematically considering stakeholder opinions as part of the decision-making process. This case highlights also several difficulties, analytical and process-related, that emerge in practical applications. Finally, it shows that the experience and expertise built by the regulatory authority over the years had a significant impact on the quality of the analysis.

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