Italian contract modification ordered

The Italian Energy Authority has ordered all producers and distributors of electricity to modify their contracts with major clients ahead of market liberalization in 1999. The requirement will apply where contracts contain clauses or binding agreements that limit competition among the operators of the electricity network.

Companies including Enel, the national utility, Unapace, Federelettrica, Confinindustria and Confapi will be affected by the decision.

Agreements between Enel and the gas group Snam will also have to be renegotiated. The key issue is the price paid by Enel to Snam for deliveries of around 6bn m3 of natural gas per year. An agreement on the transport of Algerian natural gas which Enel purchases directly from Sonatrach may also be included.