Risk Management

Electricity market risk management
With its Resolution no. 115/08 (“TIMM”) regarding the monitoring of the Wholesale Energy and Ancillary Services Markets, the Authority for Electricity and Gas defined the general principles and criteria of market monitoring for the companies Terna, GME and GSE, calling for each of these companies to establish a specific monitoring office. Electricity Market Risk Management is Terna’s monitoring unit, which is responsible for the TIMM data warehouse and sees to the acquisition, organisation and storage of data in order to monitor the volumes and indicators related to the Ancillary Services Market. The activity in question is particularly important under the scope of the Terna incentives scheme envisaged by Authority Resolution no. 213/09 in relation to the provisioning of resources for the dispatching service. In order to analyse the main risks relating to the electricity market in 2010 the SIMM (Security Index Market Monitor) was started-up. This is a managerial “dashboard” devoted to monitoring the electricity market.
A dynamic graph included represents the key performance indicators (KPIs) that allow us to have an overview of the high level of the trend of the electricity market and to readily identify any differences from the threshold limits established in order to analyse potential critical issues and risks.

Electricity system risk management
Terna is responsible for coordinating the functioning of the entire electrical system, although the Company only directly manages the part that concerns the transmission grid. As such, the correct function of the plants connected must be protected by conduct outside the scope and management of Terna, which can represent an additional threat. This is a component of operational risk that must be monitored and for which mitigating actions must be taken, actions which generally work towards limiting external events, such as malfunctions or failures to comply with the Grid Code. At times, systems with certain innovative characteristics, such as wind and photovoltaic farms, or other events that have not been foreseen require analyses and studies that may lead to changes or additions to said Code.


Fraud Management
In 2010, the Fraud Management Unit continued with its prevention of company fraud, taking all actions needed to discourage its occurrence. Under this scope, the company proceeded to implement specific procedures for certain critical processes. These aim to define the criteria and means by which to ensure management at maximum efficiency and effective prevention of unlawful conduct. The Operative Instruction defining the flows of information needed to implement the Memorandum of Understanding signed with the General Command of the Tax Police force in 2009 is particularly important, for the prevention of the risk of crime and the development of the related computer portal to allow the Tax Police access to the relevant information, in order to guarantee the timeliness, confidentiality, traceability and integrity of data.
Together with the activities involved in preventing crime, the Fraud Management Unit also carried out:
  • activities to support the Company’s other units, such as in the analysis and assessment of counterparties, so as to limit the risks deriving from transactions with others;
  • compliance activities focusing on cooperating with and supporting the Company’s management and its various offices, aimed at ensuring compliance with laws, regulations, procedures, codes of conduct, and best practices, as well as at reducing and/or preventing the risk of sanctions and safeguarding the Company’s image.

Organisational Model under Legislative Decree no. 231 of 8 June 2001
The Company Security Department, in collaboration with the Legal and Corporate Affairs Department, is engaged in implementing and updating the Organisational Model under Legislative Decree no. 231/01. For more details on the content and changes made in 2010, please refer to the Corporate Governance Report published
with the 2010 Annual report. In order to disclose and ensure the effective implementation of the principles and rules established in the model, in 2010 a capillary, differentiated training campaign was organised at all transmission areas.