Controversies and litigation

Opposition to the construction of new lines

Terna considers respect for the environment and local communities to be an integral part of grid planning and makes every effort to carry out its activities in agreement with local authorities. However, projects for constructing new infrastructures entail adverse reactions manifesting the NIMBY (not in my backyard) syndrome. In these cases, Terna’s stance is one of willingness to seek alternative solutions, even ones that are technically more complex than those originally planned, provided they are compatible with the requirements of security, efficiency, and cost-effectiveness of the electricity service.

The pursuit of shared solutions requires difficult negotiations and lengthy time. The outcomes are usually positive, however local opposition may continue during the process. During 2011 and in early 2012, the following cases were reported:

  • “Dolo-Camin”: The line was authorized in April 2011 by the Ministry for Economic Development (MiSE) in agreement with the Ministry of the Environment (MATT). In 2011, the Municipality of Vigonovo, together with the Municipalities of Fossò and Camponogara filed a petition against the MiSE’s Decree. 2010, contrarily, was characterized by opposition to the project by various Municipalities that requested the segment of line that concerned their respective territories to be buried. The Cat (Committee for the Environment and Local Communities) also protested strongly in favor of the project of the buried power line. Three petitions have presently been filed with the Regional Administrative Court (TAR).
  • “Trasversale in Veneto”: The line is in the coordination stage. There are many problems with the local communities, in particular with an environmental association in the Municipality of Paese. Among the local bodies involved, particularly the Provinces of Treviso and of Venice, the first is generally in favor of the project. The Committees request totally burying the 380 kV (approximately 33 km) power line. The “Trasversale in Veneto” power line is the fruit of a lengthy process that began in 2001 and is currently in progress. The project is included in the works for implementing the provisions of Law 443/2001, known as “Legge Obiettivo”, the legislative tool that establishes the procedures of funding modalities for building large strategic infrastructures in Italy for the 2002-2013 ten-year period. Terna has voluntarily chosen, based on a responsible approach, to involve the municipalities in the pre-authorization phases and since 2011 has intensified meetings with the municipalities to concur on a written agreement – after 5 years of dialogue – for determining the feasibility segment for placing the power line’s route and thus allowing to associate the possible removal of old lines with the building of the new one. Terna will begin the work in the authorization stage in 2012: submitting the project will activate the procedures of the “Legge Obiettivo”.
  • “Redipuglia-Udine Ovest”: The line has been in the authorization stage since December 2008. On July 26, 2011, the environmental compatibility decree was issued. In 2009, and throughout 2010 and 2011 there was strong opposition – led by the Committee for the Defense of Rural Friuli – to the project, requesting the construction of the work as a buried line. The controversy was also directed against the information and awareness rising campaign that Terna launched in Friuli to inform the people in the communities affected by the power line project.
  • “Sorgente-Rizziconi”: The work is under construction. After the authorization Decree was issued on July 8, 2010 by the Ministry for Economic Development, citizens in the municipality of Serro (hamlet of Villafranca Tirrena) carried out protest actions, requesting that some of the pylons of the overhead segment “Sorgente-Villafranca”, which crosses Serro, be buried or shifted. Similar requests were made by communities from the Municipality of Pace del Mela, both regarding the new power line under construction and the presence of the existing 380 kV “Sorgente-Rizziconi” located near the urban center of Passo Vela. Despite the power line’s route is the fruit of over 2 years of technical-environmental assessment and analyses that have led - in agreement with Sicily’s Regional Authorities, Messina’s Provincial Authorities, the Municipality of Villafranca and the Municipality of Pace del Mela, together with other 11 municipalities involved of the Messina area - to defining an overhead route that would meet in the best possible way the needs of environmental, social and health needs, fully respecting the limits established by law. Coordination and dialogue with the local governments began in 2004: over 100 meetings were held between Terna, the authorities and the local bodies involved for identifying the best solutions for protecting the territory. During 2010, the Municipality of Villafranca Tirrena, of San Filippo del Mela and of Pace del Mela filed an appeal for canceling the single authorization issued by the Ministry for Economic Development; a similar initiative was undertaken by some private citizens and environmental associations.
  • “Italy-Montenegro”: The work was authorized in July 2011. The electricity interconnection project between Italy and Montenegro was included in 2008 among the priority infrastructures (Corridor 8) as a strategic connection between the entire Balkan area and Europe through Italy, by the European Commission that also co-financed all the studies and research as part of the program for supporting Trans-European Network (TEN) electricity infrastructures. Following the favorable stance with a unanimous vote by the Local Authorities Planning Conference (November 2010), as of March 2011 controversies arose in Pescara against the cable’s route. Terna, in line with its practice of willingness to dialogue with the local governments and the communities involved, modified the route to meet the needs of the Municipality of Pescara. In February of this year, the “Futuro e Libertà per l’Italia” council group at the Municipality of Pescara announced its intention of wanting to promote a consulting referendum to hear the opinions of the community regarding the building of the power line. The Municipality of San Giovanni Teatino officialized the appeal at the Tar (Regional Administrative Court) in Lazio against the project’s authorization.
  • “Fano-Teramo”: The work is currently being coordinated. As of 2006, technical consulting began with the regional authorities involved (Marche and Abruzzo). The optimal corridor for the project was agreed upon and coordination is still in progress for defining and sharing a feasibility segment for the future power line. In January of this year, the Municipality of Pesaro expressed its opposition, through a specific amendment, against having the power line pass through its territory. Even Coldiretti, the Comitato di Belforte and the Municipalities of Ostra, Senigallia, Monte San Vito, Polverigi, Osimo and Santa Maria Nuova expressed opposition against building the power line.


Preliminary inquiries of the Electricity and Gas Authority

The following inquiries by the Authority that involved also Terna, among others, should be noted:

 

Outages in Sicily in June 2007

Fact-finding investigation on the outages that occurred in Sicily on June 25 and 26, 2007, which the Authority initiated with its Resolution no. 155/2007. On June 26, 2007 Terna took anti-blackout measures to avoid loss of control of the system and prevent more critical situations from arising; electricity distributors consequently carried out planned rotating disconnections of ordinary users. The measure was necessary owing to a series of concomitant factors: very high consumption, widespread fires that entailed shutting down several lines to allow them to be extinguished, breakdowns, and failures. The investigation is still pending.

 

Preliminary inquiry on unassigned power

With its Resolution VIS 16/11 of February 7, 2011, the AEEG imposed a 420,000 euro administrative fine on Terna. The inquiry followed the fact-finding investigation (VIS 171/09), begun in 2009, regarding non assigned energy. The preliminary inquiry followed the conclusions of the fact-finding investigation, begun in 2007, regarding anomalies noted in the determination of the electricity lots withdrawn from the grid and not correctly assigned to dispatching users. With the imposition of the penalty, the AEEG criticized Terna’s conduct for lack of diligence in performing several activities of the transmission and dispatching services for which it is responsible. The AEEG also acknowledged Terna’s proactive conduct in mitigating the negative effects of the improper behavior of other companies providing the electricity service and took the same into account in quantifying the penalty.

 

Fact-finding investigation on supplying the connection service to the grid for the electricity production plants by the grid operators

With its Resolution VIS 42/11 of March 16, 2011, the Authority began a fact-finding inquiry for further analyzing the situation regarding grid connections of the electricity production plants, particularly the low and medium voltage connections of productions plants from renewables, also following reports from operators and category associations indicating possible criticalities in carrying out connection procedures in various areas.

During the inquiry, all the grid operators and principal associations of electricity producers were requested to provide information regarding the grid connection service for production plants and also to differentiate this information according to the various reference resolutions that regulate the issue (281/05, 89/07, 99/08-ICA, TICA modified).

Also Terna, as the National Transmission Grid operator, received the requests and provided all the information under its responsibility.

The fact-finding investigation closed with Resolution VIS 99/11, without any further provisions being expected to be taken against Terna.

The outcome of the inquiry, included in the Report attached to the Resolution, indicated a substantial compliance of the grid operators’ activity with respect to the terms of the regulation. Nonetheless, the Authority deemed it necessary to continue inquiry procedures with the grid operators analyzing in detail various random sample connection applications. 

 

Litigation regarding environmental issues

Litigation for environmental issues is based on the installation and operation of electricity plants and mainly regards damages that could derive from exposure to electrical and magnetic fields generated by the power lines. The Parent Company and the subsidiary Terna Rete Italia were parties in various civil and administrative proceedings where a request was made for moving or modifying the operation modalities of the electricity lines on the basis of the alleged damage they cause, even if installed in full compliance with the existing laws on the matter (Law no. 36, February 22, 2001, and D.P.C.M. (Decree of the Presidency of the Council of Ministers) July 8, 2003). Requests for damages compensation for health owing to electromagnetic fields were very few.

Regarding decisions on the matter, it should be noted that only in few litigation cases, unfavorable decisions against the Parent Company were issued, which were appealed and whose relative proceedings are still pending and negative outcomes are considered unlikely.

 

Litigation regarding concession activities

The Parent Company, as the owner of the concession for transmission and dispatching activities as of November 1, 2005, was summoned in various proceedings largely for appeals to provisions issued by the AEEG and/or the MSE (Ministry for Economic Development) and/or by Terna itself and relative to such activities. Only in the cases where the appealers claim, in addition to irregularities in the provisions appealed, also Terna’s alleged violation of the rules established by the above-mentioned authorities, the Company started a legal action. As part of this litigation, although various proceedings ended in first and/or in second instance trials with the annulment of the AEEG Resolutions and of Terna’s consequent provisions, it is unlikely that there will be any negative outcomes for the Company, since these are considered normally as let through lots, as is also gathered by the information provided by the external attorneys that assist the Company in proceedings. Terna, the Parent Company, as the owner of the concession of the transmission and dispatching activities, in application of the Resolutions of the Authority, adopts deeds and provisions that can be appealed, even if the relative economic charges, in the presence of certain conditions, can be recognized by the sector’s Authority.

 

Other litigation

Some proceedings are pending regarding the environment and city-planning in connection with the construction and operation of several transmission lines. A negative outcome in these cases could generate unpredictable effects and thus they are not included in the determination of the “Provision for litigation and sundry risks”.

For a small number of proceedings we cannot presently absolutely exclude unfavorable outcomes, whose consequences – in addition to the payment of damages – could consist in, among other things, sustaining the expenses connected with modifying lines or the temporary unavailability of the lines themselves. In any case, negative outcomes would not compromise the operation of the lines.

Taking into account also the opinion of the Company’s external lawyers, an examination of the abovementioned litigation leads to believing that negative outcomes are highly unlikely

 

PenaltiesEU25
SO4
SO7
SO8
EN28
PR9

In the 2009-2011 three-year period:

  • there were no definitive criminal convictions or plea bargaining for injuries to third parties caused by Terna assets;
  • as of December 31, 2011 there was no pending litigation nor had any legal proceedings ended regarding  corruption, unfair competition, anti-trust, or monopolistic practices. Also with regard to corruption, unfair  competition, anti-trust, or monopolistic practices, no definitive administrative or judicial, monetary or non-monetary fines were recorded for non-compliance with laws or regulations, including environmental ones, that imposed on Terna an obligation to “do/not do” (e.g., prohibitions) or convicted its employees for crimes. 

In the three-year period 2009-2011 no significant penalties were recorded regarding the environment, or in general, compliance with law provisions.

On the basis of Resolution VIS 16/11 by the AEEG, in 2011, Terna S.p.A. paid an administrative fine of 420,000 euro to settle the preliminary inquiry begun with Resolution VIS 171/09, for having violated AEEG’s provisions regarding electricity transmission, dispatching and metering services. The dispute particularly referred to anomalies noted in the determination of electricity lots withdrawn from the NTG and not correctly assigned to dispatching users.