In recent days, rags (and possibly complaints) have flown between the leader of Action, Carlo Calenda, and the CEO of Enel, Flavio Cattaneo. The object of the dispute is a topic that we have discussed several times: namely the mind-boggling EBITs – read profits – of the companies that manage electricity transmission and distribution networks.

The issue can be summarized as follows: Terna and Enel Distribuzione are the companies that manage the electricity grid (a public infrastructure) under concession. More precisely, Terna manages the transmission network (high and very high voltage), while Enel Distribuzione takes care of the distribution network. In reality there are also other operators, but Enel Distribuzione currently covers around 80 percent of the low and medium voltage network. Since the electricity grid is a natural monopoly (the cables are the same for everyone), the fact that the property is public and the management entrusted to a concessionaire is completely normal.

How the market works

Obviously, companies that obtain a public infrastructure concession have a duty to maintain it and guarantee continuity of service (i.e. that electricity reaches end users) and, in exchange, are entitled to a profit. In the case of network operators, in almost all of the world the profit comes from the transmission and distribution costs included in the bill, with the addition of a mark-up which constitutes the concessionaire’s operating margin.

The problem arises when these companies, taking advantage of the fact that they operate under a monopoly, decide to obtain enormous margins and make stratospheric profits – so much so are users forced to pay. And this is exactly the accusation that Carlo Calenda leveled at the two companies, together with the – more specific – accusation of having rewarded the managers with generous bonuses financed by those profits.

Enel’s CEO, Flavio Cattaneo, responded by calling Calenda a “lazzarone” and announcing legal action; Calenda, in turn, declared that he will present a question to Minister Pichetto Fratin on the financial statements of the concessionaires.

Italy has become the country of parasitic incomes.
On the bill, 60% of which is made up of charges other than the energy market price, this situation has become scandalous. Hydroelectric and distribution concessions renewed without tender are useful… pic.twitter.com/Tb7gKeAfD7

— Carlo Calenda (@CarloCalenda) October 16, 2025

From here on, the process of the matter is beyond our competence and also my interest, as is the issue of bonuses for Enel managers.

The point is that, looking at the financial statements, Calenda seems to have some reason. Enel Distribuzione has an EBITDA (gross operating margin, i.e. turnover minus expenses) of 54 percent, much higher than that of E.ON Distribuzione and EDF Réseau, concessionaires of the German and French networks, which translates into an EBIT (net operating margin: EBITDA minus depreciation and amortization) of 42%. The numbers are even higher for Terna, which closed the first half of 2025 with an EBITDA of 67% and an EBIT of 48.2%. From here the net profit is calculated (EBIT less taxes and interest), which for Terna amounts to over 30% of turnover. An enormity.

To make a comparison: luxury brands, which usually have the highest margins because they sell products at exorbitant prices compared to production costs, don’t even come close to these figures. Hermès has an EBITDA of 40%, Ferrari 38%, LVMH 28%, Lamborghini 27%.

In a free market regime, such high profits are not a problem: it means that customers are willing to pay more – for quality, innovation or brand status – or that the company has been able to reduce costs and increase margins. But here there is no competition: the transmission and distribution of electricity take place in a monopoly regime which concerns an essential service.

Market without rules?

It should also be said that the concessions to Terna and Enel Distribuzione are assigned without tender, and that both companies are publicly owned. Otherwise, the most obvious solution would be to put the concessions out to public tender, assigning them to those who guarantee lower tariffs for the same service.

It can be objected that the profits of Terna and Enel Distribuzione are reinvested in improving the networks, but the objection is perplexing: first, because the companies have other tools to finance structural investments (issuing shares or bonds); second, because at least part of the profits is distributed to shareholders, who in the case of Terna and Enel are mostly institutional investors.

This leads to two scenarios:

1. those profits are reused in public benefit projects – and then it would be a form of hidden taxation;
2. or they are simply pocketed by shareholders or redistributed to management in the form of bonuses – and then it would be “legalized theft”.

In both cases, given that Italy already pays one of the highest prices in Europe for electricity raw materials, if the bill is further inflated with fixed costs not linked to system charges, it is more than legitimate to ask for transparency on how that money is used.

Inflated prices, the document that reveals the extra earnings on electricity bills

In all of this, we should also talk about ARERA, the authority that regulates and controls the electricity markets. In theory it should establish the tariffs on the bill – including those relating to “General system charges” – based on the indications of the network operators. The suspicion, however, is that in this case it performs a function not very different from that of the validation machine on the bus.