Managing the liberalization of Italy's retail electricity market: A policy proposal☆
- Autori: Stagnaro, Carlo; Amenta, Carlo; Di Croce, Giulia; Lavecchia, Luciano
- Anno di pubblicazione: 2019
- Tipologia: Articolo in rivista
- OA Link: http://hdl.handle.net/10447/390688
Italy will phase out electricity retail price regulation by July 1st, 2020. Until then, residential customers and small businesses who do not choose their supplier are served under a regulated tariff named “maggior tutela” (greater protection), supplied by the local distributor at a price set by the regulator. We review the literature on electricity retail competition – with particular regard to its expected effects on prices, innovation, and customer engagement – and the conditions under which competition is expected to deliver benefits. We perform a Structure-Conduct-Performance analysis of Italy’s retail electricity market for residential customers, finding two issues potentially problematic: excessive market concentration and low customer engagement. We propose a phase-out mechanism that relies on graduality, asymmetric regulation, and a mandatory, opt-out collective switching exercise. The mechanism aims to rapidly reduce market concentration by leveraging behavioral incentives to customers to switch to the cheapest supplier.