Operating review

Lazio - Campania Area 

ACEA Ato2

The Integrated Water Service in ATO 2 Central Lazio - Rome started on 1 January 2003. The ATO gradually took over services from the Municipalities, and 75 of the 112 services in the ATO are currently run by the Municipalities. At 31 December 2014 the overall situation in the territory managed is as follows:

Acquisitions no. of municipalities
Municipalities fully acquired by I.I.S.  75
Municipalities partially acquired, for which ACEA ATO 2 provides one or more services: 19
- Municipalities in which only the acquired consortium service is provided  5
- Municipalities partially acquired but with Protected Subject 3
- Municipalities partially acquired  11
Municipalities in which ACEA Ato2 provides no services 13
Municipalities that declared they do not wish to be part of the I.I.S.* 5

* Municipalities with fewer than 1,000 inhabitants who had the right to express their will in accordance with paragraph 5 of Legislative Decree 152/06. 6,0

The larger Municipalities which have not yet been acquired include Civitavecchia, to which the Lazio Regional Authority in Decree of the Regional Government No. 318 - 10/10/2013, attributed powers of substitution to transfer the integrated water service to the ATO 2 single operator, appointing a Commissioner to do so. It is also noted that the Municipal Administration has recently been re-elected, therefore we are awaiting communications regarding policies on the management of the I.I.S. The transfer of the I.I.S. of Civitavecchia is however troubled by considerable criticalities in terms of equity, management and authorisation problems, about which we are unable to give any definite answers.

On 29 December 2014 the water abstraction and/or distribution services were acquired for the Municipalities of Capranica Prenestina, Olevano Romano, Canterano, Rocca Canterano, Gerano and Rocca di Papa (services performed previously by Società Acque Potabili under a protected category regime). For the Municipalities of Capranica Prenestina and Olevano Romano, for which the company was already performing the sewerage and water treatment services, the transfer to ACEA Ato2 of the complete water service completes the acquisition of the Integrated Water Service (I.I.S.), while for the remaining four Municipalities only the water service has been acquired, pending the complete transfer of the IIS, which can only happen after the upgrading of sewerage networks and wastewater treatment systems.

The company provides the full range of drinking water distribution services (collection, abstraction, retail and wholesale distribution). Water is abstracted from sources on the basis of long-term concessions.

Water sources supply approximately 3,600,000 residents in Rome and Fiumicino, as well as more than 60 Municipalities in the Lazio region, via five aqueducts and a system of pressurised pipes.

Three further supply sources provide non-drinking water used in the sprinkler system of Rome.

The sewerage service comprises a sewer network of about 6,084 km (including approximately 4,088 km of network serving the municipality of Rome) and more than 300 km of trunk lines, without counting the connections to the sewage system.

The company manages the wastewater treatment system and pumping stations that serve the network and sewage trunk lines.

In 2014, the main wastewater treatment plants handled approximately 565 million cubic metres, an increase of around 3% compared with the previous year. Sludge, sand and grating production for all managed plants in the reporting period exceeded 160,000 tonnes, an increase of around 10% vis-à-vis 2013.

At 31 December 2014, the Company managed a total of 541 sewage pumping stations, including 173 in the municipality of Rome, and a total of 174 wastewater treatment plants, including 33 in the municipality of Rome.

With reference to the issue concerning the seizure of wastewater treatment plants, at 31 December 2014 8 treatment plants and 5 untreated waste discharges were under seizure.

On this point, it is noted that in August: (i) a court petition was filed for the release from seizure of the Colle Pisano treatment plant; (ii) authorisation was granted for the Valle Silla discharge, and a court petition was filed for the release from seizure of the Valle Silla treatment plant and Pastene treatment plant in the Municipality of Rocca di Cave; (iii) the Ordinary Court of Rome ordered the seizure of “the stretch of underground piping in piazzale Dunant, 1 and of the ACEA drawpit”, prohibiting the performance of digging works in the surrounding area. The precautionary seizure came further to the death of the foreman of the subcontracting firm, who was working on behalf of ACEA in the drawpit. It is also recalled that the appeal lodged with the TAR for the Colle Pisano treatment plant at Monteporzio Catone is still pending, for which the Province had granted an authorisation at the end of December 2013, giving instructions that could not be enacted in the given time frame, and at odds with upgrading intervention previously agreed upon in the services conference. These orders will be additional grounds for the appeal before the TAR. For the Allumiere treatment plant too an appeal before the TAR is pending for the Bolzella treatment plant, for which the Province issued an authorisation in February 2014, imposing limits at odds with the nature of the ditch and of previous authorisations. In March 2015 the Roma Est treatment plant was released from seizure.

With regard to tariffs, with resolution 141/2014/R/idr of 27 March 2014, AEEGSI approved the values of the tariff multiplier for 2012 (1,025) and 2013 (1,053) proposed by the Mayors’ Conference meeting on 4 March 2014.

With reference to the 2014-2015 tariff update AEEGSI approved, with resolution 463/2014/R/idr of 25 September 2014, the tariff proposed for 2014 and 2015 and relative tariff multipliers examined by the Mayors’ Conference of 10 July 2014; the tariff multipliers – 1.148 for 2014 and 1.251 for 2015 - mark an annual increase of 9% for both annual tariffs, subject to approval.

With this resolution the Authority made the following main observations:

  • non-recognition of costs incurred for water-related emergencies relating to the drinkability of water supplies, for a value of 0.24 million euros;
  • provisional upholding of other costs incurred for environmental emergencies (9.6 million euros) pending further studies and the results of legal proceedings;
  • acceptance, with the obligation to maintain the iso-revenue, on the basis of 2013 volumes effectively measured, of changes to the tariff structure approved by the Area Authority, without prejudice to AEEGSI's right to ensure that criteria established by art. 39 of resolution no. 643/2013 is observed at the time of application.

Furthermore, as required by Resolution No. 141/2014/R/idr approving the 2012 and 2013 tariffs of Rome ATO 2, the Conference, within the scope of implementation of the Water Tariff Method (MTI), completed further in-depth assessment required for the dimensioning of the “FoNI” component, in relation to the acknowledgement of planned operating costs, in accordance with the Operator's guaranteed income. This assessment led to the consequent adjustment, approved by AEEGSI, of the value of the FoNI component for 2013, while confirming the guaranteed income (VRG) and tariff multiplier approved for the 2-year period 2012 and 2013 and resetting the 2013 FNIFoNI component.

In order to reduce annual tariff increases, the Area Authority, in agreement with the operator, reallocated the adjustments for 2012 and 2013, forecasting the subsequent recovery in 2015 of approximately 19 million euros.

As a result, revenues for 2014 based on the tariff calculations set for 2014 amounted to 500.2 million euros, inclusive of estimated adjustments of pass-through items and the differences compared with values recognised in the 2012 and 2013 financial statements.

ACEA Ato5

ACEA Ato5 provides integrated water services on the basis of a thirty-year agreement signed on 27 June 2003 by the company and Frosinone Provincial Authority (representing the Authority for the ATO comprising 86 municipalities). In return for being awarded the concession, ACEA Ato5 pays a fee to all the municipalities, based on the date the related services are effectively acquired.

The management of the integrated water service in the territory of ATO 5 Southern Lazio-Frosinone involves a total of 85 municipalities (management still to be taken over for the municipalities of Atina, Paliano and Cassino Centro Urbano as regards water services only) for a total population of around 480,000 inhabitants, about 460,000 inhabitants supplied and a number of end users of 187,101. No new acquisitions were formalised in 2014, but it is noted that on 17 September 2014 a memorandum of understanding was reached with the Municipality of Atin marking the end of a pending dispute and delivery of the facilities required for the management of the IIS in the municipality.

With regard to the Municipality of Paliano, in August 2014 ACEA Ato5 proposed to AMEA – the current service operator – a memorandum of understanding to resolve numerous problems that have thus far prevented the formalisation of the move to the IIS.

With regard to the Municipality of Cassino, in December 2014 the TAR of Latina upheld the appeal lodged by the Company, ordering the Municipality to complete its obligations within ninety days of the notification (or, if before, of the administrative notification of the decision) or, if this order is not complied with upon expiry of this period, an acting Commissioner, appointed with the same decision, shall act in its place.

The drinking water system comprises supply and distribution plants and networks that use 6 main sources from which an equal number of aqueduct systems originate. The coverage of this service amounts to about 97%.

The sewerage-purification system comprises a network of sewers and trunk lines connected to wastewater treatment terminals. The company manages 201 sewage pumping plants and 111 biological wastewater treatment plants, as well as 16 Imhoff tanks and 3 percolating filters.

Following the recognition and related assessment of users connected to the sewerage system (as a result of Constitutional Court Sentence No. 335/2008), it emerged that the coverage of this service is equal to approximately 68% of aqueduct users.

With reference to the tariff for 2012 and 2013 that was approved by the Mayors’ Conference of 5 March 2014, the Company started billing the corresponding tariff using the highest allowed tariff multiplier in accordance with AEEGSI Resolution No. 585/2012.

With reference to the 2014-2015 tariff update and the related economic-financial plan, the Company submitted a specific application to the Area Authority and AEEGSI on 29 April 2014. The tariff multiplier contained in the application is equal to 1.669 for 2014 and 1.660 for 2015, therefore 9% higher than that prescribed, based on AEEGSI studies.

Following the notice given by AEEGSI to the Area Authority, on 14 July 2014 the Mayors' Conference approved the maximum tariff multiplier for 2014 and 2015 calculated provisionally using the tariff method (respectively 1.090 for 2014 to be applied to the 2013 tariffs and 1.090 for 2015 to be applied to the 2014 tariffs), resulting in temporary tariffs of 1.680/m3 for 2014 and 1.831/m3 for 2015, “without prejudice to the fact with regard to the theta values proposed by the operator resulting in tariff changes, in absolute terms, exceeding the MTN limit, an investigation shall be ordered by AEEGSI.”

Furthermore, a resolution was passed on the new tariff structure, which on the basis of art. 39 of Annex A to Resolution No. 643/2013/R/idr, obliges the Area Authorities or competent subjects to abolish the minimum consumption commitment for domestic users.

The Mayor's Conference also decided to “send the resolution to AEEGSI, along with the documentation on the agenda for the consequent investigation, in observance of the AEEGSI notice served on 16 June 2014, in accordance with art. 5 paragraph 5.6 of Resolution No. 643/2013/R/idr”. The Mayor's Conference resolution was published at the end of September 2014.

On 19 February 2015, with regard to preliminary studies as per paragraph 7.1 of resolution 585/2012, AEEGSI contacted the Area Authority requesting information and explanations, to be provided by 6 March 2015.

As a consequence, revenues in 2014, including adjustments to the pass-through items, totalled 67.2 million euros, calculated, as in 2012 and 2013, using the tariff multiplier proposed in the Operator's application approved by the Mayors' Conference on 14 July 2014.

With reference to prior adjustments for the period 2006-2011, quantified by the appointed Commissioner as equal to 75.2 million euros (at 31 December 2014 the amount was 64.6 million euros), ACEA Ato5 began billing users as from July 2014. It is recalled that, as required by Resolution No. 643/2013, the adjustments will be billed over three years in full observance of the methods and times for recovery.

Please refer to the paragraph “Information on concession services” for further information.

     

GORI

The Company manages the Integrated Water Service throughout the entire territory of ATO No. 3 Sarnese Vesuviano in the Campania Region, covering a surface area of 897 Km2 and a population of approximately 1.44 million euros inhabitants.

A total 4,388 km of water network is currently managed consisting of a 360 km primary abstraction network and a 4,028 km distribution network, with a 2,298 km drainage and sewerage system.

The table below outlines the main technical data, broken down by service, posted for the period ending 31 December 2014:

Technical data 2014
Municipalities Managed   (no.) 76
Resident population (ISTAT figures at 1/1/ 2013)  (no.) 1,441,170
Water distribution network  (Km) 4,028
Abstraction network  (Km) 360
Total Network   (Km) 4,388
Sources  (no.) 9
Wells  (no.) 67
Reservoirs  (no.) 183
Pumps  (no.) 113
Drainage and Sewerage Service
Drainage and Sewerage Network  (Km) 2,298
Pumps  (no.) 149
Water Treatment Service
Plants   (no.) 12

The Company provides integrated water services on the basis of a thirty-year agreement signed on 30 September 2002 by the company and the Sarnese Vesuviano Area Authority.

As for tariffs, the Acting Commissioner of the Sarnese Vesuviano Area Authority, in Resolutions Nos. 26 and 27 of 31 March 2014, updated the Economic-Financial Plan, transmitting to AEEGSI this Plan and the Plan of Action, and set Guaranteed Revenue Limits and the tariff multipliers for 2014 and 2015.

According to the provisions of resolution 643/2013, the assumptions made by the Acting Commissioner for the purposes of calculating tariffs for 2014-2015, or the applicable tariff rules, and identification of the respective Area led to GORI being placed in Area IV, by virtue of the ratio between capital expenditures required in the period 2014-2017 and the value of existing infrastructures being greater than the parameter w, corresponding to 0.5, and the assumption of a system-wide variation due to the transfer of regional works, in accordance with the resolution of the Campania Region, no. 172/2013 of 03/06/2013, ordering said transfer of “Regional Works”.

Since the previous assumptions formed the basis for determining the 2014 VRG (guaranteed income restriction) entered in the financial statements, it is also necessary to specify the changes occurring in the meantime having an impact on said limit.

It is firstly necessary to consider the coming into force of Campania Regional by-law no. 16/2014, “Intervention to boost and develop the regional economy and update the regulatory and organisational system (connected to regional stability by-law 2014)” which in paragraphs 88-91 of art. 1 requires that Regional Works be transferred to I.I.S. operators operating in Campania only after a period of efficiency-raising, to be carried out within thirty-six months. Said transfer will therefore presumably occur at the beginning of 2018.

Secondly, following the inspection conducted by the Authority at GORI on 15 April 2014, some doubts were raised regarding some base assumptions for calculating the 2012 and 2013 tariffs. The points raised have a negligible impact on the 2012/2013 Restriction and on the theta, and have been considered as a precautionary measure for the purposes of calculating the 2014 Restriction.

In particular, the breach of art. 7, paragraph 1 of Annex A to resolution 585/2012/R/idr and of point 3.4.4 of Decision 2/2012 TQI and of art. 8, paragraph 4 of Annex A to resolution 585/2012/R/idr and point 3.4.4 of Decision 2/2012 TQI have led to a correction of contested values in ModStratificazione, resulting in an adjustment of the Capex value.

For 2014, therefore, a VRG of 174.2 million euros was determined (Group share of this 64.5 million euros), corresponding to an incremental theta of 1.438 in respect of the 2012 tariff.

These revenues, as in 2012 and 2013, include the difference between the revenue derived from the application of the rules in Resolutions Nos. 585/2012 and 643/2013 and the maximum allowed in the first phase: said difference amounts to a total 39.0 million euros (Group share 14.4 million euros).

Prior adjustments accrued at 31 December 2011 amount to 79.4 million euros (Group share 29.4 million euros), initially 122.5 million euros (Group share 45.3 million euros). These adjustments were approved, in accordance with Article 31 of Annex A of Resolution No. 643/2013, by the Acting Commissioner of the Area Authority in Resolution No. 43 of 30 June 2014. The resolution also established billing times as four years, for the same amount. The decrease derives from billing first issued in September 2014. Finally, it is noted that because of the implementing agreement signed on 24 March 2014 between the Campania Region, the acting Commissioner of the Sarnese Vesuviano Area Authority and the Company, resulting in the re-calculation of the debt with the Campania Region, fixed as a result of the settlement agreement of 24 June 2013, tariff adjustments accrued up until 2011 were increased by 9.8 million euros (Group share 3.6 million euros).

The Company set aside this sum to meet the relative cost of adjusting the value of debts for bills to be issued for tariff adjustments, in relation to schedules in place for the billing and recovery of these debts. As a result of the issue in 2014 of a part of the pre-2011 adjustments, the part of the discounting fund deemed to be in excess was reclassified to the bad debts fund to cover risk regarding the collection of items from previous years.

As for the 40 million euros bridge loan that matured 30 June 2011, on 30 June 2014 a contract was signed converting the bridge loan into a multi-year loan with maturity 31 December 2021. This contract regularized the Company's debt position, with consequent positive effects in terms of improvement in its rating and access to bank loans.

 

GESESA

The Company operates under ATO Authority no. 1 Calore Irpino, which is promoting and developing IIS management in Municipalities within the Provinces of Avellino and Benevento. The Authority, currently headed by an Acting Commissioner as per D.G.R. no. 813/2012, has not yet chosen a Single Operator for the management of the IIS.

ATO no. 1 has recently implemented – as part of a broader initiative for the planning and management of Water Resources in the Campania Region – the recommendations from the Mission Structure for the Planning and Management of Water Resources, aimed at facilitating the shared desire of former AATO authorities to choose a Single Operator to operate under the supervision of the same Authorities, also in light of changes introduced by Law 164/2014 Art. 7, Environmental decree no. 152/2006, in particular articles 147 and 172, and most recently the 2015 Stability law. This activity is deemed to be an urgent need by virtue of the deadlines fixed by art. 172 of the cited decree 152/2006, setting 30 September 2015 as the deadline by which Area Governing Agencies must adopt final measures for choosing a Single Operator to run the service (paragraphs 1-3), and regulate the enactment of the ‘first application’ phase of the provision. This activity in the phase of transition is also contemplated by paragraph 3 of Art. 19 of the draft regional by-law 477/13 for the reorganisation of the IIS, referring to the provisions of the cited art. 172.

The Company manages the IIS in 12 Municipalities of the Province of Benevento, serving a total population of about 95,000 inhabitants over an area of 451 km2. There are about 45,000 served users. The sewerage and water treatment service is supplied to around 80% of users.

The Company is currently engaged in the acquisition of the CABIB Consortium, consisting of seven Municipalities.

   

Tuscany - Umbria Area 

Acque

The management agreement, which came into force on 1 January 2002 with a twenty-year duration, was signed on 28 December 2001. In accordance with said agreement, the Operator took over the exclusive integrated water service of ATO no. 2, comprising all public water collection, abstraction and distribution services for civil use, sewage systems and the treatment of waste water. The Area includes 55 municipalities. Acque pays a fee to all the municipalities for the concession, including accumulated liabilities incurred under previous concessions awarded.

On 11 February 2015 the AIT agreed to the proposal put forward by the Company to extend the concession period to 2026. This decision will come into full effect upon the approval of the lending Banks.

With reference to the 2014 and 2015 tariff proposal approval process, on 3 April 2014 the Territorial Conference of the Lower Valdarno ATO2 approved the guaranteed Revenue limits and the theta for 2014 and 2015.

Compared to the previous year the theta is equal to 6.5% for both 2014 and 2015. In order to maintain the tariff increase at this level, the tariff recovery of the 2012 adjustments repayment component was postponed to 2016.

On 24 April 2014 the Company sent the tariff update request in accordance with Resolution No. 643/2013/R/idr and the methods required by AEEGSI. On the same date the Meeting of the Tuscany Water Authority approved the tariff proposal as formulated by the Territorial Conference.

The data and evaluations in the update request presented by the Company differ from the calculations approved by the Meeting of the Tuscany Water Authority as to the formula used to calculate the tariff multiplier, as the Company considers the formula adopted by the Tuscany Water Authority to be incorrect, failing to respect the principle of full cost recovery.

Following the decision to modify the formula used for calculating the Theta, in order to maintain the annual tariff increase of 6.5%, the adjustments to be recovered in 2016 have been altered. In brief, the two tariff proposals differ in the amount of the portion of Rc adjustments postponed to 2016 and, ultimately, in the total guaranteed tariff revenues.

In Resolution No. 402/2014/R/idr of 31 July 2014 AEEGSI approved the 2014 and 2015 tariff multipliers, respectively equal to 1.134 and 1.208; these multipliers take into account, considering the amount of planned investments, the shorter useful asset life compared to the regulatory life, further to the Tuscany Water Authority's right to adopt financial amortization.

2011 adjustments for previous periods were approved by the Tuscany Water Authority on 30 June 2014 by Resolution No. 35 and amount to 3.8 million euros (Group share 1.7 million euros).

On 31 July 2014 in Resolution No. 402/2014 AEEGSI approved “the tariff proposals reported to the Authority pending further preliminary investigation by the Tuscany Water Authority, concerning the remarks made by Acque S.p.A. the results of which may be considered as an adjustment.” The Tuscany Water Authority approved the Company's observations and intends to include them as adjustments in the next Economic-Financial Plan.

Revenues in 2014 amounted to a total of 125.9 million euros, including adjustments of pass-through items (Group share of 56.7 million euros).

As already mentioned, in October 2006 Acque signed a contract with a pool of banks which provides for a total loan of 255.0 million euros to cover the financial needs of the investment plan from 2005 to 2021, estimated at around 670.0 million euros. The actual drawdown at 31 December 2013 was 218.0 million euros. The period for repayment of the loan started in June 2014, with six-monthly instalments increasing according to the profile defined for the loan. The final instalment of the repayment is due to be paid in December 2021. Instalments paid in 2014 totalled 2.1 million euros; in 2015 the overall repayment will be 8.3 million euros.

 

Publiacqua

The management agreement, which came into force on 1 January 2002 with a twenty-year duration, was signed on 20 December 2001. In accordance with said agreement, the Operator took over the exclusive integrated water service of ATO no. 3, comprising all public water collection, abstraction and distribution services for civil use, sewage systems and the treatment of wastewater. The Area includes 49 municipalities, of which 6 managed via agreements inherited from the previous operator, Fiorentinagas. In return for awarding the concession, the Operator pays a fee to all the Municipalities, including accumulated liabilities incurred prior to award of the related contracts.

In June 2006, ACEA - via the vehicle Acque Blu Fiorentine S.p.A. – completed its acquisition of an interest in the company.

With reference to the 2014 and 2015 tariff proposal approval process, on 18 April of this year Territorial Conference No. 3 Middle Valdarno of the Tuscan Water Authority approved the new tariff and the Economic-Financial Plan for 2014-2021, approved also by the Meeting of the Tuscany Water Authority on 24 April 2014. Compared to the previous year the theta is equal to 3.4% for 2014 and 6.4% for 2015.

In Resolution No. 402/2014/R/idr, AEEGSI approved the 2014 and 2015 tariff multipliers respectively equal to 1.101 and 1.171; these multipliers take into account, considering the amount of investments planned, a shorter useful asset life compared to regulatory life, further to the Tuscany Water Authority's right to adopt financial amortization. Furthermore, the Guaranteed Income Restriction (VRG) includes the valorisation of the FNInew component calculated on the basis of parameter ψ equal to 0.4.

Revenues for 2014 were calculated on the basis of approved tariff calculations, and amount to a total, including adjustments of so-called pass-through items, of 201.8 million euros (Group share 80.7 million euros).

The Tuscan Water Authority, in a letter dated 27 September 2013, implemented the 4th tariff review relevant to costs, announcing it wished to apply it to the years 2010-2011, excluding 2012 therefore, the year in which the Transitional Tariff Method came into force.  The review concluded with the approval of Resolution No. 36 - 30 June 2014: the Tuscan Water Authority calculated an adjustment of 8.9 million euros (Group share 3.6 million euros), about 10 million euros (Group share 4 million euros) less than the figure set aside in previous years, representing the recovery of lower depreciation and amortisation and remuneration of invested capital which, when the MTN was in force, was recognised to the previous operator.

In terms of financing sources, on 29 November 2012 the company took out a new bridge loan with a duration of 18 months minus one day, until 23 May 2014 for a total of 75.0 million euros, of which a total of 60 million euros disbursed on the subscription date.

On 15 May 2014, the company submitted a request to the Agent Bank for an extension of the Loan Final Maturity until 30 November 2014. The request was approved by the Banks, and the necessary changes were made to the Loan Agreement.

Upon the maturation of the bridge loan the Company entered into bilateral loans for a total of 92.5 million euros, maturing (i) to the extent of 55 million euros on 30 June 2015 and (ii) for the remaining 37.5 million euros on 27 November 2015.

The Company is also in talks with leading lending banks to jointly assess the best way of financing the Economic and Financial Plan 2015-2021.

 

Acquedotto del Fiora

Based on the agreement signed on 28 December 2001, Acquedotto del Fiora is to supply integrated water services on an exclusive basis in ATO no. 6 Ombrone, consisting of public services covering the collection, abstraction and distribution of water for civil use, sewerage and wastewater treatment.

The concession term is twenty-five years from 1 January 2002.

In August 2004, ACEA – via the vehicle Ombrone S.p.A. – completed its acquisition of an interest in the company.

With reference to the 2014 and 2015 tariff proposal approval process, on 8 April the Territorial Conference No. 6 Ombrone of the Tuscan Water Authority approved the new tariff and the Economic-Financial Plan for 2014-2021, approved also by the Meeting of the Tuscany Water Authority on 24 April 2014. Compared to the previous year the theta is equal to 6.5% for both 2014 and 2015. On 31 July 2014 AEEGSI confirmed the above in Resolution No. 402/2014/R/idr, approving the 2014 and 2015 tariff multipliers, respectively equal to 1.134 and 1.208; these multipliers take into account, considering the amount of planned investments, the shorter useful asset life compared to regulatory life, further to Tuscany Water Authority's right to adopt financial amortization. Furthermore the Guaranteed Income restriction (VRG) includes the valorisation of the FNInew component calculated on the basis of parameter ψ equal to 0.5.

In order to limit annual tariff increases, the Area Authority, in accordance with the operator, reallocated the adjustments for 2012 and 2013, forecasting the subsequent recovery in 2015 of approximately 3.7 million euros (Group share 1.5 million euros).

2011 adjustments for previous periods were approved by the Tuscany Water Authority on 30 June 2014 by Resolution No. 38 and amount to 4.2 million euros (Group share 1.7 million euros).

Revenues in 2014 amounted to a total of 90.1 million euros, including adjustments of pass-through items (Group share of 36.1 million euros).

In financial terms, on 5 March 2012 the company signed an extension to the bridge loan agreement for a further 18 months, i.e. to September 2013, which increased from 80 million euros to 92.8 million euros after disbursement of a further 12.8 million euros. Finally, on 5 September 2013 a further extension of the Bridge was agreed up to 105.0 million euros (Group share 42.0 million euros) expiring 30 September 2014, required to cover the remaining new investments in 2013 and a significant portion of the investments listed in the Plan for 2014. The procedures which would hopefully have made it possible to consolidate the current loan in a medium/long-term financial structure by the date of maturity of the Bridge loan, and cover the moderate financial requirements still needed to complete the Plan of Action, were at an advanced stage. At the same time, considering new regulations, and following the Tuscany Water Authority's resolution on the new Water Tariff Method, the Company sent letters of invitation for the procedure to select one or more Banks interested in the project, with 31 July 2014 set as the deadline for presentation of the offers, extended to 15 October 2014 on request of the same banks. In consideration of the above extension of the deadline for the presentation of offers for a medium/long-term loan, as the same is also required to refinance the existing Bridge loan, the 30 September 2014 maturity of the same “Bridge” loan is no longer coherent and for these reasons in August the Company quickly requested an extension to the Bridge maturity date, suggesting 31 March 2015 as the new maturity date.

   

Umbra Acque

On 26 November 2007 ACEA was definitively awarded the tender called by the Area Authority of Perugia ATO 1 for selection of the minority private business partner of Umbra Acque S.p.A. (concession expiry 31 December 2027). A stake in the company (40% of the shares) was acquired on 1 January 2008.

During the period, the company performed its activities in all 38 Municipalities constituting ATOs 1 and 2.

With Resolution 252/R/idr passed on 29 May 2014 AEEGSI approved the tariff proposals for 2014 and 2015 with tariff multipliers respectively equal to 1.126 and 1.195.

In its report, the Area Authority specified that it opted for the non-application of financial amortization and, exercising its right, reset the FNInew tariff component for 2014. An adjustment of 6.3 million euros was also approved for 2012, equal to a maximum of 2.1 million euros per year to be added to the 2014, 2015 and 2016 tariffs.

Revenues in 2014 amounted to a total of 60.9 million euros, including adjustments of pass-through items (Group share of 24.4 million euros).