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ENERGY

At a glance: What does Italy’s new energy aid package mean for you?

Italy’s government has confirmed further financial aid to help households and businesses cope with soaring energy bills. Here’s a breakdown of the main measures.

Boiler knob
Italy’s government has confirmed a new round of financial aid measures to help households and businesses cope with soaring energy bills. Photo by Ina FASSBENDER / AFP

Much like the rest of Europe, Italy has been hit by record energy prices over the past few months and gas and electricity tariffs are only expected to rise further in the coming months. 

On Thursday, the government announced a new round of financial aid to support struggling families and businesses.

READ ALSO: How Italy has avoided a huge hike in gas prices – for now

The latest aid package, worth 9.1 billion euros, is the fourth aid bill (decreto aiuti) issued since the start of the energy crisis. It comes after Mario Draghi’s cabinet brought in three such bills which amounted to a total of 61.2 billion euros in state aid. 

Here are the most relevant measures included in the new package.

Subsidies for low-income families

Italian households with an annual income – this is calculated as ISEE (Equivalent Financial Position Indicator) – of up to 12,000 euros or up to 20,000 euros in the case of families with four or more members will continue to benefit from discounts on their gas and electricity bills (‘bonus gas e luce’) until the end of the year.

READ ALSO: Italy’s energy giant reports huge profit as more price hikes expected

The size of the discounts, which are applied directly to bills, varies based on the geographic location, type of energy contract and family size of the claimant.

Find further information on Italian energy regulator Arera’s website.

Tax credit for businesses

Businesses across the country will remain eligible to receive tax credit (credito d’imposta) equal to as much as 40 percent of their energy-related expenses. 

First introduced under Draghi’s government, the above measure was meant to expire on November 30th but has now been extended to the end of the year.

The criteria regulating who can claim the bonus and how much they can claim are available here on the Italian tax agency’s website. Details on how to claim the bonus can be found here.

Radiator

Families will be able to claim discounts on gas and electricity bills until the end of the year. Photo by Jean-Christophe VERHAEGEN / AFP

Paying bills in instalments 

Under the new decreto, businesses across the country will be able to pay gas and electricity bills received between October 1st, 2022 and March 31st, 2023 in instalments, with a maximum of 36 monthly instalments allowed.

The option to pay via instalments will be revoked if a business fails to pay two consecutive instalments.

READ ALSO: EXPLAINED: How much are energy prices rising in Italy this autumn? 

Fuel duties

Despite a recent decrease in fuel prices across the country, the existing discounts on fuel duties – 30.5 cents on every litre of petrol or diesel and around 10.4 cents for methane – will remain in place until December 31st.

So far, around 8 billion euros have been allocated to cutting fuel prices in Italy. 

Cost of living bonus scrapped

The government has ultimately scrapped the idea of offering another one-time 150-euro bonus for all residents with an ISEE of up to €20,000 a year – the first round of such bonuses had been offered by Draghi’s cabinet as part of the third decreto aiuti back in October.

Cash payment limit increased

As promised, Meloni’s government has raised the legal limit for cash transactions.

While ministers originally proposed bringing the cash payment ceiling up from the current 2,000 euros to 10,000 euros, the new aid package sets the threshold at 5,000 euros.

READ ALSO: Italian government seeks to raise cash payment limit ‘to help the poor’

The measure has attracted criticism as critics believe it will encourage widespread tax evasion and money laundering – two problems that have long dogged the Italian economy.

Superbonus 110

The discount on construction works afforded by Italy’s much-discussed building bonus will go from 110 percent to 90 percent in 2023.

Builder taking a break

The discount on home construction works afforded by Italy’s building superbonus will go from 110 percent to 90 percent in 2023. Photo by Valentine CHAPUIS / AFP

However, while the bonus was originally meant to lapse for one-household properties (‘immobili unifamiliari’) at the end of 2022, the owners of such properties will still be able to claim the discount in 2023 as long as the property in question is their first home and their ISEE doesn’t exceed 15,000 euros a year (the threshold is expected to change depending on the size of the claimant’s family).

Extraction of natural gas 

The latest aid package will allow the government to grant licences for the construction of new drilling stations between nine and 12 nautical miles off the Italian coast

The measure is part of a wider attempt to diversify the country’s energy portfolio and wean Italy off Russian gas supplies altogether.

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ENERGY

Why your Italian electricity provider could change in 2024

A planned change in Italy’s electricity suppliers system means that many customers may be automatically assigned to a new provider in 2024. But what exactly is changing and who will it affect?

Why your Italian electricity provider could change in 2024

A long-planned reform of Italy’s utility suppliers system means that many customers around the country may have their current electricity provider automatically changed as of July 1st of this year.

But, as new details over the reform have emerged in recent days, it’s now easier to understand what the upcoming change will be all about and what it will mean for customers. 

What’s changing?

At the moment, electricity customers in Italy have two options.

You can sign up for an energy supply contract with tariffs set by the Italian national energy regulator Arera under what’s called mercato tutelato, or ‘protected market’.

Or you can sign up for a contract with a private supplier in the mercato libero (or ‘free’ market), with providers setting their own rates and being at liberty to offer a variety of discounts and promotions.

But, following the introduction of laws aimed at increasing market liberalisation in Italy, the ‘protected’ market option is now being phased out, with electricity contracts at state-controlled rates set to expire on July 1st 2024 (the original deadline fell on April 1st but was later postponed by three months). 

READ ALSO: Why you may need to switch your Italian energy supplier by 2024

This means that customers on protected contracts (approximately 4.5 million households according to the latest estimates) will have until the start of July to switch to a new provider (and contract) within the free market. 

What happens if I don’t make the switch?

Customers who don’t make the switch to a ‘free market’ provider by July 1st will be automatically assigned to a new supplier and placed under a ‘gradual protection contract’ (or servizio a tutele graduali)

This is a special three-year contract designed by national energy regulator Arera to smooth customers’ transition from the protected market to the free market. 

Under the contract, private suppliers will offer rates in line with or, at times, lower than previous ‘protected’ tariffs, with customers enjoying a fixed rate (i.e., not varying based on market price fluctuations) for the first 12 months. 

READ ALSO: At what time of day is electricity cheapest in Italy?

The switch to the ‘gradual protection’ contract will be free of charge and totally automatic, with previous direct debit arrangements set to be transferred to the new contract. 

The switch will apply to all households on protected electricity contracts, except customers identified as ‘vulnerable’ by Arera, who will continue to enjoy protected market tariffs beyond July 2024. These include people over 75, people with disabilities and severely ill patients. 

How are my bills going to change?

Automatically assigned private suppliers will apply rates generally in line with previous state-controlled tariffs. 

In some cases, the switch to the ‘gradual protection contract’ may even lead to non-negligible savings on your yearly electricity bill.

For instance, customers in Avellino, Benevento, Grosseto, Livorno, Pisa, Pistoia, Prato and Siena may see annual savings of up to 200 euros, according to a report from Italian news website Today. 

For any further information on ‘gradual protection’ contracts, see national energy regulator Arera’s website.

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