Brussels is open to Meloni’s energy bill decree. Broad agreement reached between Italy and the EU. Technical issues remain

Brussels – After months of discussions, Italy and the European Commission are moving closer to an agreement on the energy bills decree, the measure through which Giorgia Meloni’s government aims to reduce the cost of electricity by addressing the role of gas-fired generation. The European Commission reports that a solution compatible with European regulations has emerged, which would allow the measure proposed by Rome to be implemented. The final go-ahead, however, has not yet been given. 

“Following intensive and constructive discussions between the Commission and the Italian authorities, a broad agreement is taking shape on the key elements required to implement this measure in line with EU rules,” stated the Commission’s spokesperson for Competition, Ricardo Cardoso, during the usual midday press briefing. “All of this, of course, is subject to final technical discussions.”

This issue is not just a hot topic for Meloni. Following last week’s informal meeting of the “Friends of Competitiveness”, the Prime Minister, together with German Chancellor Friedrich Merz and Belgian Prime Minister Bart De Wever, has sent a letter to the President of the European Council, António Costa, specifically to call for an acceleration of investment in strategic sectors, starting with energy.

Meloni herself had spoken about developments regarding the Energy Bills Decree in her statements to the Senate ahead of the European Council on 15 and 16 October: “The Commission has committed to working with us on the Energy Bills Decree. The technical discussions have been intense and constructive and are leading us towards a solution that is compatible with European rules and would enable us to implement our measure, reducing the impact of gas-fired generation costs on the overall price of electricity.” Now,  the Commission confirms that the discussions have led to progress, although not all the issues necessary to implement the measure have been resolved. 

The aim of the decree is to reduce the impact of gas costs on the overall price of electricity by adjusting the mechanism through which the cost of gas-fired power generation is reflected in wholesale prices. In this way, the government aims to ease the burden of energy bills on households and businesses, in an electricity system where the marginal price is often determined precisely by gas-fired power stations. 

It is on the basis of this outcome that the government and the European Commission are seeking a joint solution, in accordance with European rules on competition and the functioning of the electricity market. The technical discussions are aimed at identifying implementation methods that are compatible with the EU regulatory framework. 

However, the agreement in principle does not yet amount to final approval of the measure. The statements from Brussels do not clarify the extent of the expected savings, the timeline for implementation, or how any reduction in costs will be passed on to consumers’ bills.