Italian power market hit by crisis decree

A proposed policy package from the Italian government in response to the financial crisis could cause further turmoil in the domestic power market, finds Rachel Morison

Italy's recently announced 'anti-crisis' decree, formulated by the government in response to the global economic turmoil, proposed significant changes to the current wholesale electricity pricing system, prompting ratings agency Fitch to warn of increased regulatory uncertainty and heightened risk over price predictability.

The decree could spark a move from the current marginal pricing system, where the electricity price reflects the costs of the most expensive plant to be dispatched, to a pay