In the Italian energy landscape, the Regulatory Authority for Energy, Networks, and Environment (ARERA) plays a crucial role in ensuring the sector’s stability and competitiveness. To this end, ARERA has issued the Standard Network Code for the Electricity Transport Service (CTTE), which regulates, among other things, the contractual guarantees required from companies operating in the sector.
To access the network and supply electricity, companies must provide specific guarantees to the distribution company. The Network Code outlines different types of guarantees, distinguishing between:
- Traditional guarantees: bank or insurance sureties, or non-interest-bearing security deposits
- Reputational guarantees: credit ratings or parent company guarantees issued by the controlling company of the user.
Obtaining a credit rating, particularly a public investment-grade rating, provides energy companies with a significant advantage in terms of access to guarantees and liquidity management.
Benefits
- Simplified access to guarantees: Companies with a high rating can use the rating itself as a guarantee, avoiding the need for bank or insurance sureties, which are often costly and complex to manage. This mechanism allows companies to free up liquidity that can be allocated to other strategic activities for business growth
- Increased competitiveness: The ability to use the rating as a guarantee enables companies to participate more actively in the market, reducing access costs and enhancing their competitiveness
- Cost reduction: A high credit rating can result in more favorable conditions when accessing bank or insurance credit, positively impacting the company’s financial management
- Improved reputation: A credit rating serves as an important indicator of reliability and financial stability, helping to strengthen the company’s reputation and market image.
Why are credit ratings essential for energy companies?
ARERA recognizes the importance of credit ratings as a guarantee tool for energy companies, and the Network Code precisely defines the requirements for the issuance and use of ratings for this purpose. Companies that wish to take advantage of this opportunity must turn to accredited rating agencies capable of providing a reliable evaluation in compliance with ARERA’s regulations.
In conclusion, obtaining a credit rating represents a strategic opportunity for energy companies aiming to operate efficiently and competitively in the Italian market. A solid rating simplifies access to guarantees, frees up financial resources, enhances reputation, and strengthens their position in the sector.
Are you an energy company looking to discover how a credit rating can help you operate more efficiently and competitively?