http://www.enel.it/azienda/it/investor_relations/presentazioni/doc/2008_01/ENEL_third%20regulatory%20period.pdf

1. 2008-2011: new regulatory period for electricity
distribution, metering and commercial activities
January 14, 2008

2. Enel SpA
Investor Relations
The new regulatory framework
Resolution
Resolution Distribution and metering tariffs for 2008-2011
348/07
348/07
Recognized revenues for commercial activities
Resolution
Resolution related to “protected customers”
349/07
349/07
Resolution
Resolution Quality of service regulation for 2008-2011
333/07
333/07
Clear and stable regulatory scenario
New challenges and opportunities
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3. Enel SpA
Investor Relations
Clear and stable regulatory scenario
Reduction of 2008 tariffs fully balanced by volume
Impact on revenues increase
Impact on revenues
Slight revenue increase for 2009-2011
Profit sharing effects balanced by other regulatory
Profit sharing
Profit sharing items:
increase in depreciation thanks to new investments,
old meters treatment and digital meters useful life
reduction
2008 vs. 2007 volume increase
increase of commercial activities price
Reduction for the period 2008-2011
X-factor
X-factor
New mechanism based on achieved efficiencies
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4. Enel SpA
Investor Relations
New challenges and opportunities
Higher tariff for commercial activities to promote
Liberalisation
Liberalisation liberalisation
Higher value of customers on the free market
New regulation to enhance continuity of service,
Quality of service
Quality of service including reduction of number of interruptions
Innovative actions to be implemented to confirm
the good track-record in outperforming standards
2% extra-return for minimum 8 years on specific
Investment
Investment investments, with regard to quality and efficiency:
incentives
incentives
new sub-stations in specific areas (e.g. Southern
Italy)
new technologies (low losses transformers and smart
grids)
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5. Enel SpA
Investor Relations
The new regulatory framework: key metrics
2008-2011 2004-2007
~ 22 bn€ ~ 20 bn€
RAB 11
RAB
7.0% for distribution 6.8% for distribution
7.2 % for metering 7.0 % 3 8.4 % for metering
7.0 % 3, 4
WACC 22
WACC 7.0 % for commercial activities 8.4 % for commercial activities
2.2%5
X-Factor
X-Factor 1.4% on a like for like basis 3.5%
1. Starting RAB for distribution, metering and commercial activities
2. Real pre-tax
3. Weighted WACC = WACCd*RABd+ WACCm*RABm+WACCc*RABc
4. Plus 2% extra return on specific investments (for minimum 8 years)
5. Applied only to opex and equal to weighted average of 1.9% (Distribution) and 5.0% (Metering)
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6. Enel SpA
Investor Relations
Commercial activities regulation
Compensation Mechanism introduced by the Regulator to
Compensation
mechanism compensate 2008 unbalances between revenues
mechanism
and costs in excess of 5%
Reduced impact of larger customers switching to
the free market thanks to €/customer indexation
Revenues evolution of tariff
Revenues evolution
New mechanism to be set by the Regulator to
guarantee fixed costs coverage in presence of
significant switching of customers to the free
market
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7. Enel SpA
Investor Relations
2008 estimated tariff revenues
€mn
1
Depreciation
4,850 4,860
Distribution and Metering
0.24
Commercial activities 4,180
4,340 0.44 Opex
0.32
510 680
2007 2008 Return on RAB
Source Enel
1. Including volume effect
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8. Enel SpA
Investor Relations
Estimated RAB evolution
€bn
+2 +0.5 -0.5 ~ 22
~ 20
Net
2004 Deflator Other 2008
investments
impact 1 adjustment 2
2004-2006
Source Enel
1. From IIQ03 to IQ07
2. Mainly disposals, change in pension fund, change in provisions
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9. Enel SpA
Investor Relations
Closing remarks
Clear and stable framework
Investment in digital meters acknowledged
General framework in line with Enel commercial
strategy on the free market
No effects on 2008 figures
Positive impacts on 2009-2011 figures
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10. Enel SpA
Investor Relations
Disclaimer
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CORE ENERGY BUSINESS, ITS ABILITY TO IMPLEMENT COST-CUTTING PLANS, CHANGES IN THE REGULATORY
ENVIRONMENT AND FUTURE CAPITAL EXPENDITURE.
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11. Enel SpA
Investor Relations
Contact us
Investor Relations Team (investor.relations@enel.it)
Luca Torchia (Head of IR) +39 06 83053437
Massimiliano Bevignani (Stock analysis and IR reporting) +39 06 83057023
Donatella Izzo (Buy-side) +39 06 83057449
Fausto Sblandi (Sell-side) +39 06 83052226
Visit our website at:
www.enel.it (Investor Relations)
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