Sustainability Report Terna Manages Electricity Transmission in Italy and Guarantees Its Safety, Quality and Low Costs Over Time

2008

Sustainability Report Terna manages electricity transmission in Italy and guarantees its safety, quality and low costs over time. The Company ensures equal access conditions to all grid users. It develops market activities and new business opportunities based on its experience and technical know-how acquired in managing complex systems. Terna creates value for its shareholders with an outstanding professional commitment, with a responsible approach towards the community and in respect of the environment. 2008

Sustainability Report 2 Sustainability Report 2008 R otn ne 13 22 structure Governance Activities, organisationandownershipstructure Terna’s profile GRI ContentIndex Introduction Summary utiaiiy rgams ik,opruiis37 Stakeholder involvement Sustainability: programmes, risks,opportunities Executive Summary Letter tothestakeholders Community andTerritory 24 Media andOpinionGroups Suppliers Grid usersandelectricitysectoroperators 36 Employees Shareholders Medium- andlong-termchallenges Disputes andlitigations Recognitions received inthereporting period Sustainability performanceandobjectives Terna’s themes Code ofEthicsandOrganisational ModelpursuanttoLegislativeDecree no.231/2001 controlInternal employee ControlInternal System(ICS) Board ofAuditors Board ofDirectors Statutory bodies Terna’s system corporategovernance The 2009-2013StrategicPlan Membership inAssociations Core organisation andprocesses inItaly Revenue structure andregulatory framework Ownership structure Boundary 21 31 45 49 48 48 48 46 45 43 42 40 39 37 33 33 33 31 31 31 29 28 27 23 11 9 6 4 cnmcrsosblt 71 57 56 55 Economic responsibility Additional information G3 product responsibility performanceindicators Context, managementapproach, andobjectives Responsibility fortheelectricityservice also niaos145 119 120 Report 85 86 Tables ofindicators Additional information 72 G3 socialperformanceindicators Context, managementapproach, andobjectives Social responsibility Additional information G3 environmental performanceindicators Context, managementapproach, andobjectives Environmental responsibility Additional information economicperformanceindicators G3 Context, managementapproach, andobjectives eain ihteeetiiysco prtr 81 Relations withtheelectricitysectoroperators Relations withsuppliers Relations withshareholders Engineering andinnovation Plant maintenance Grid development Service continuityandquality Safety oftheelectricitysystem eeomn n aaeeto ua eore 136 125 120 137 Report oftheIndependent Auditors 115 Initiatives intheCommunity Training Safety intheworkplace:acommitmenttowards on-goingimprovements Development andmanagementofhumanresources Society Human rights Labour practicesanddecentworkconditions Society Human rights Labour practicesanddecentworkconditions Environmental SustainabilityandDevelopmentPlan Concerted planningwiththeterritory Glossary Acronyms 173 160 158 136 125 111 174 140 139 134 134 124 123 111 58 88 78 73 79 78 67 67 63 60 58

3 Summary 4 Sustainability Report 2008 Letter tothestakeholders communication activities, the start of new training paths and the use of internal instructors intheCampusproject,communication activities,thestartofnewtrainingpathsand theuseofinternal andthe electricity –alsomeansdevotingconstantattentionto our people.Theyear2008sawasharpincrease ininternal In additiontoconsideringtheenvironmental aspects,appropriately performingourfundamentalmission–transmitting between birds andhigh-voltagepowerlines,anaspectforwhichscientificinformationisstillscanty. agreement signedwithLIPU–theItalianpartnerofBirdLife –hasinitiateda fieldstudytoassesstheinteract International factors amongthecriteriausedtodefinewhere newpowerlinesare placed.Asforexistinglines,anothercollaboration company –whichcalls,amongotherthings,forpreparing guidelines tointegratebiodiversityandconservationprotection and WWFItalia–thefirstsignedbyworld’slargest nature conservationorganisation withamajorItalianinfrastructure Contributing totheelectricitygrid’ssustainabledevelopmentwillbecollaborationagreement reached betweenTerna out ourmaindevelopmentprojects are almosttriplethenumberofkilometres ofnewlineswewillbebuilding(about450). environmental implicationsaswell:thekilometres ofexistingpowerlineswewillbeabletoremove (about1,200)bycarrying 2008; thefirstoftwocableslaidwillenterservicebyend2009.Othergriddevelopmentinvestmentshavemajor also forthepositiveeffects itwillhaveontheproduction ofenergy from renewable sources inSardinia. Works proceeded in accordance withwhatisnowawell-establishedapproach, wehaveintegratedintotheplanningandbuildingphases,but technical standpoint,withimportantsustainabilityimplications,notonlyfortheattentiontoenvironment which,in SAPEI, thesubmarinecableconnectionbetweenSardinia andtheItalianpeninsula.Itisarecord-setting workfrom the to continuingonthispathfor2009aswell,andtheyearsfollow. Themostimportantprojects includebuildingthe Italian core business.In2008,wefurtherincreased investmentsovertheaverageforyearsbefore, andweare committed the centre ofourStrategicPlan;thesalestakesinBrazil, announcedinApril2009,helpstowards concentratingonthe Carrying outthenationalelectricitygridDevelopmentPlan,alwaysoneofTerna’s fundamentalgoals, ismore thaneverat expect infrastructuralinvestmentstomakeanimportantcontributioneconomicrecovery. general interest. Andasaresult ofthisrole, there isalsoastrong recall toourresponsibilities, inaphasewhichwe solidity andperformance,whichare foundeduponitsrole asaninfrastructuralfirmcarryingoutworksand services of the area ofsustainability. Thedevelopingoveralleconomicscenariohascastanevensharperspotlightonthecompany’s For Terna, 2008wasayearthatbrought great satisfaction,bothineconomicresults, whichexceededforecasts, andin ion in itseffectiveness, andenrichedbyobservationsfrom thoseitaddresses. Report toselectedgroups ofstakeholders:ourcommitmenttotransparency wouldnotbecompleteunlessitwere tested and totheneedthateveryonecomplywithit.We willthencontinuethepathbegunin2008, aswepresent thisSustainability as well.Moreover, withtargeted communicationefforts, wewillstrengthen theappealtovaluesofCodeEthics, Internally, investmentinoccupational safety anddevelopinghumanresources willbethemainlinesofinterventionin2009 interest inenjoyingareliable, efficient electricityservice. objective istobringlocalinterests inlinewithTerna’s anditsshareholders’ interest increating value,andthecountry’s approach forsometimehasbeentotaketheterritory’sneeds intoconsiderationrightfrom theinitialplanningphases: activity: thegrid’sdevelopmentinfactcannotprogress withoutsociety’sacceptanceofelectricityinfrastructure. Our to this,listeninganddialoguingwithlocalinstitutionsiswillremain ourmostimportantstakeholderengagement Externally, thelocalterritoryremains thecentraldimension – becauseitislinkedtothecore businessandaimedatmaintaining arelationship oftrustwithstakeholders. Reports ofyearspast.Theybearwitnesstoapaththatgoesonconsistently–andwillcontinueinto2009beyond The results obtainedbearwitnesstoprogress onanumberoffronts, respecting thepurposesdeclared alsoinSustainability guiding criterionforothergenerosity efforts madetosupportlocalprojects. contemporary Italianartists.AndvolunteerworkcarriedoutbyTerna’s employeesinthenon-profit sectorhasbeenthe Terna01 electricity gridmaintenanceanddevelopmentactivities.Particularlyimportantamongthevariousinitiativesis another waytoreturn value tocivilsocietyandlocalcommunities,inconsiderationofourpresence ontheterritorywith 2008 alsosawTerna’s more decisivecommitmenttosupportinginitiativesinsocial,cultural,andhumanitariansettings– Terna carriesoutregularly everyyear. are alsoaconcrete corporateresponse totheareas ofimprovement indicatedintheemployeesatisfactionsurveysthat overall designofhumanresources developmentandmanagement,theprojects thathavebeencarriedoutandstartedup preparation oftheperformanceevaluationsystemthatwillbefullyoperationalin2009.Inadditiontoresponding toan The Chairman LUIGI ROTH award –aninitiativeconceivedanddevelopedbyTerna topromote artandinparticulartheworkof modern ofthedialogue.AsReportillustratesinsectiondedicat FLAVIO CATTANEO The CEO Premio ed

5 Letter to the stakeholders 6 Sustainability Report 2008 comments. to the29GRIindicatorsofelectricitysector(ElectricUtilitiesSectorSupplement,PilotVersion 2007)andtheirrelated 33 ofwhichrefer totheGroup’s boundary(6more thaninthe2007Report).Italsoincludesinformationcorresponding the GlobalReportingInitiative,andwasauditedbyKPMGauditingcompany(levelB+).There are 39GRIindicators, The SustainabilityReport2008wasprepared, liketheprevious twoeditions,according totheG3ReportingGuidelinesof The SustainabilityReport2008:newpoints reach completionbytheendofyear. signed onApril24,2009forthesaleofthisshareholding toCemigGeraçãoeTransmissão SA.Theagreement willprobably its management.TheTerna Group alsooperatesinBrazilthrough itssubsidiaryTerna Participações. Anagreement was Europe andseventhintheworldamongindependentnetworkoperators,withover61,000kmofelectricitylinesunder With thepurchase ofthehigh-voltageelectricitylinesbelongingtoEnelDistribuzione(April1,2009),Terna ranksfirstin has a70%shareholding). with ashareholding of29.99%,isCassaDepositiePrestiti (ajoint-stockcompanyinwhichtheItalianMinistryofFinance electricity infrastructures. IthasbeenlistedontheItalianstockmarketsince2004anditsrelative majorityshareholder, Terna isthemainownerofNationalhigh-voltageelectricityTransmission GridinItalywithover98%ofthenational Executive Summary to itsmission.Theyear2008highlightedprogress in allareas. environmental andsocial)afourtharea itsresponsibility concerning towards theelectricityservice, directly connected Terna acknowledgesfourareas ofresponsibility: thethree areas relating tothecompany’sSocialResponsibility(economic, The fourareas ofresponsibility: mainresults • Details relating tocorporategivingexpenseshavebeenpublished(p.73and140-142). Details relating • Details relatingtoemployeesincontractingcompaniesandtheirrelatedinjurieshavebeenshownforthefirsttime • aboutsafetyinthe workplacehasbeenincluded(p.137-138),whichillustratesTerna’s Additionalinformation commitment • hasbeenaddedaboutequalopportunities formenandwomen(tableonp.122):Terna’s information Further management • framework”hasbeenincluded(p.24-26):this explainsthe and regulatory newparagraphcalled“Revenuestructure A • Two gases). published:EN8(totalwaterwithdrawal)andEN19(refrigerant newindicatorswere • • wasappointed.ItsmandatewillfinishwiththeapprovalofFinancial On April28,2008thenewBoardofDirectors In 2008theTerna• 1,395millioneuro,ofwhich1,196inItaly. reached Grouprevenues OnDecember31,2008the Continuingattentionhasbeenpaidtowards thecontainmentofCO • Two importantcollaborationagreementsweresignedwithLIPU(p.91)andWWF99).Thefirstistargetedtowards • processwaslaunchedwhichachievedthemaximumincentive dailywind-powerelectricityproductionforecasting A • wereachievedandsurpassed(p.60-61). performancetargetsonthecontinuityandqualityofelectricityservice The • company’s vehicle fleet (p.106-107 and 110). According to the Italy Report of the Carbon Disclosure Project2008,Ternacompany’s vehiclefleet(p.106-107 and110).AccordingtotheItalyReportofCarbon Disclosure LA1 andLA7indicators(p.125-126p.128-129,respectively). towards on-goingimprovement. treatmentofwomen. systems donotcauseanydiscriminatory Terna’smechanisms usedtoremunerate activities. regulated that are consistent with the WWF’s conservation strategyintotheplanningprocessforconstruction ofnewlines. consistent withtheWWF’sconservation that are research intotheinteractionbetween high-tensioncablesandbirds.Thesecondaimsto integrateenvironmentalcriteria accuracyasprovidedforbytheAuthorityElectricityandGas. bonuses forforecasting control overSF do soensuingfromtheKyoto Protocolorfromemissiontradingschemes.Theprogrammes particularlyrelatetothe of DirectorsconfirmedFlavioCattaneoasCEO. of theCompany. LuigiRothinhisroleasChairman Meetingconfirmed Statements for2010.TheShareholders’ TheBoard number ofemployeesintheGroupstoodat3,734,which3,524Italy. 6 losses (agreenhousegasfound insomeelectricitystationequipment)andoveremissions fromthe 2 emissions, althoughtherewere noobligationsto The 2009objectivesrepresent anotherstepforward alongthepathsalready embarked upon(p.40). Sustainability objectivesfor2009 • The European The BusinessAwards. • Premio Aretê. • Accountability Rating2008. • Dow JonesSustainabilityIndexes. • • Launching the Global Performance System, the new performance assessmentmodelforTerna System,thenewperformance LaunchingtheGlobalPerformance employees. • Improvementsinexternalcommunication onthetopicofsustainabilitythroughaspecificsectionwebsite. • managementprocedures. Approvalofapolicyongiftsandsponsoringactivitiestheirrelated • Definition ofaspecificaccountingsystemforenvironmentalexpenses. • Newcommunicationtoolsforemployeeshavebeendeveloped(periodicalhouseorgan,photographiccompetition, • • Meetings with stakeholders were organisedforthefirsttimeinordertoillustrateTerna’s Meetings withstakeholderswere approachtowardssustainability • was held,whichhighlightedasatisfactionrateamongemployeesofover60%;the thirdPeopleSatisfactionsurvey The • Supporttowardssocialcauseswasincreased.InItaly, sumsspentongiftsandsponsoringactivitiesexceeded2million • showngrowthin2007(p.139-140). inthenumberofstafftraininghours,whichhadalready hasbeena27%increase There • Progressintheprogrammes to reduceCO • Compliance withthetargetsassignedbyAuthorityforElectricityandGas. • Continuation ofdiscussionswithstakeholdersbasedonthecontents2008SustainabilityReport. • ofacampaign toraisethelevelofattentionpaidvaluesexpressedinCodeEthics. Creation • FTSE4Good. • Sustainability ratingandrecognition commitment towardssustainabledevelopment. successful companiesinthe27EUnationsthathavedistinguishedthemselvesvariousfields,includinginnovationand awards intheCorporateSustainabilitycategory. TheEuropeanBusinessAwardsidentifyandawardprizestothemost make theinstituteoneofinternationalrefer which procedures basedontheirowninternally-developed AccountAbility Institute.Theanalysesare market index.AccountabilityRatingItaliaistheItalianversionofInternationalperformedby analysis. ofsustainabilityunder inthe22areas 2008 citation,whichisgiventothosecompaniesthathavemadethebestprogress thespecialSectorMover the bestfourteenelectricityutilitiesoutof107examinedinallpartsworld.Itreceived Management) ethicalratingagency, toobtainadmissiontheDowJonesSustainabilityindexes,Terna rankedamong oftheirsustainableeconomicdevelopment. Exchange index,whichgatherstogetherthebestEuropeancompaniesinterms is one of seven Italian S&P/MIB companies that have prepared astrategy foremissioncontainment(p.102). is oneofsevenItalianS&P/MIBcompaniesthathaveprepared themes aswelloperatorsinthenon-profitarea(p.48-49). and itsSustainabilityReport.Thesemeetingsinvolvedjournalistsspecialisedonenvironmentalsocialresponsibility oninternalcommunicationactivitiesandtoolswasalsoconducted(p.46-47). first survey called CreativInTerna, projects(p.140-142). variousdeserving fromemployeesconcerning received andtotheinformation Terna01euros, thanksalsotothelinkswithcompanyinitiativessuchasPremio competition awardandtheinternal Christmas get-togethers)andtheexistingoneshavebeenimproved(p.122-123). Sustainability isalsothis Joining the“10x10”Project organisedbythemotoringmagazineQuattroruote:Terna undertakestocutCO • Work onthe SAPEIsubmarinelinkhascontinued:the“record-breaking cable”thatrespectstheenvironment(p.96-97). • Montepulciano(SI), adisusedpylonbecomeslookoutpostforbirds(p.92). In • Terna wasoneof thebestcompaniesinfirstItalianeditionof“CRFTop Employers”basedontheranking • • The first Premio Terna01 firstPremio The held:“Let’stransmit energytoArt”(p.142). Artawardswere Contemporary • • The SOC (Security Operation Centre) was opened. This control centre complieswithTerna’s wasopened.Thiscontrolcentre SOC(SecurityOperationCentre) The securitymodeland • • An electricitystationwasbuiltinaspace ofonly500m An • Launchingofcoordinatedplanningamongtheoperators European grid(p.66). • emissions initsfleetofcompany vehicles(p.107). procedure created bytheDutch agencyCRF(p.137). created procedure ensures integrated supervision overphysical,logicalandenvironmentalsecurity(p.59). ensures integratedsupervision Terna FinancialTimes asoneofthecompaniesincludedinprestigious wasconfirmed LondonStock Terna camefirstinthe“InternalCommunication”strategy. en a akdegt mn 0mjrIaincmaisblnigt h &/I stock Terna wasrankedeighthamong40majorItaliancompaniesbelongingtotheS&P/MIB Terna the “Ruband’honneur”forbeingoneofthe10finalistsin2009 received On thebasisofanalysesconductedannuallybySAM(SustainabilityAsset 2 emissions. ence pointsonsustainabilityreportingstandards. 2 at Arco(TN)insteadofthe3,500 m 2 normally required(p.69). 2

7 Executive Summary

2008

Introduction 10 Sustainability Report 2008 Introduction Terna’s Board ofDirectors asofOctober2008, containedthemaininformation through June30,2008. reference wasmadeto thenewelementsofimportanceoccurringuntilApril30,2009. Lastyear’sReport,approved by The observationperiodisthe year2008:allthedatarefer tothefinancialyearclosing December31,2008;moreover, systems; intheeventofestimates indeterminingtheindicators,procedure followedwasindicated. The datawere calculatedwithprecision, basedontheresults ofthegeneral accountingandofTerna’s otherinformation The G3’sapplicationlevelhasbeengivenaB+assessment. the GRIReportingGuidelines,tableofContentIndex hasbeenaddedimmediatelyafterthisintroduction. identified intheCompany’sCodeofEthics.To helpreaders interested inaccuratelyretrieving theinformation provided forby their pertinencetoTerna’s activitiesandtheinterests ofitsstakeholders.Infact,theReportideallyaddresses allthesta The G3indicatorstobeincludedwere selectedonthebasisofacareful evaluationoftheinformativepurposeeach,and the variationsfrom inthe2007Sustainability Report,andthereasons theadditionalindicatorsfurnished forthevariations. vocabulary specifictotheelectricityindustry. Theopeningofthe“Tables ofindicators”sectionincludesatablelistingall The Reportendswithsometablesofadditionalnumericindicators andaglossaryusefulinunderstandingthetechnical of employeesasDecember31theprevious year. LA2 indicator, ratesfortheyearspriorto2008were theturnover recalculated byrelating theoutgoingflowstonumber integrated keytointerpreting Terna’s wayofworkingwithregard tosustainabledevelopment.Itisspecifiedthatinthe The G3performanceindicatorstaketheformofpoint-by-pointresponses tospecificqueries,andonthewholeoffer an close withsomemore in-depthpassagesthatTerna deems itimportanttoprovide. responsibility, continue withtheselectionofG3performanceindicatorsgreatest relevance foreachsection,and regarding Terna alone.Thesectionsopenwithanillustrationoftheoperationalapproach tothespecificarea of and social–characterisingsustainabilityreports, preceded bythesectiononresponsibility oftheelectricityservice, into fourcentralsectionshasbeenmaintained.Thesecorrespond tothetriplebottomline–economic,environmental, The Reportisorganised inthesamewayasithasbeenyearspast.After“Terna’s profile”, thebreakdown oftopics September 2009,Brazilianactivitiesare destinedtoleave thereporting boundary. it hadsignedanagreement totransferitsstakeinTerna Participações.Althoughthetransactionwillnotclosebefore framework forthetwocountrieswhere Terna operates.ItshouldalsobeunderlinedthatonApril24,2009,Terna announced response toacommitmentexpressed intheprevious editionsoftheReport:gradualalignmentinformation The greater informationonactivitiesinBrazil,whichdoesnot stopatmerely developingsixnewGroup indicators,isthe applicable ones,thepagewhere the information isfoundindicated. the partsonmanagementapproach), indicatingwhether ornottheseare applicabletoTerna’s typeofactivity. Forthe information provided forbytheSupplement(newindicators and more in-depthversionsofpre-existing indicatorsorof consideration oftheirrelevance tothespecificarea ofactivity. AtableintheparagraphGRIContentIndexlistsall consistent withitscommitmenttotransparency tostakeholders toprovide aresponse toallinformationrequests, in As fortheindicatorsinElectricUtilitiesSectorSupplement,whosepublicationisnotyetmandatory, Terna deemedit forsixenvironmental indicators(EN2,EN3,EN13,EN14,EN16,EN22),thereporting boundarywasextendedtoinclude • setofindicatorsrequired the bytheSupplementtoGRI-G3Guidelinesforcompaniesinelectricutilitiessector • newgeneralindicatorswere two introduced (EN8attheGroup level,andEN19withreference toItaly); • The 2008editionhassomeimprovements over2007.Inparticular: attached hereto. Report wassubjectedtospecificreview procedures byKPMG,whichprepared itsownReportoftheIndependentAuditors Guidelines definedin2006bytheGRI-GlobalReportingInitiative,alsoknownasG3.Thisyearwell,Sustainability Like thelasttwoeditions,2008Terna SustainabilityReporthasbeenprepared basedontheSustainabilityReporting Brazilian activitiesaswell.Asaconsequence,theseindicatorsnowrefer totheGroup boundary. not availablelastyear, wascalculated; (Electric UtilitiesSectorSupplement,PilotVersion 2007)wascompleted;inparticular, theindicatorEU16,whichwas keholders 00156 Rome Viale EgidioGalbani,70 Terna CORPORATE SOCIALRESPONSIBILITY EXTERNAL RELATIONS ANDCOMMUNICATION DEPARTMENT Social performanceindicators: • Environmental performance indicators:EN2,EN3,EN4,EN8,EN12,EN13,EN14,EN16,EN22,EN28,EN29. • Economic performanceindicators:EC1,EC2,EC3,EC6,EC7. • indicators, againstthe20required fortheguidelines’compliancelevelB). The indicatorsprovided forbytheG3whichreporting boundarycoverstheentire Terna Group are asfollows(32 For theGroup data,where possible,theinformationbygeographicarea (Italy, Brazil)isalsoprovided. Italy, orTerna SpA. • Group, asdefinedabove; • Each G3indicatorpublishedintheSustainabilityReportstatescalculationboundaryadopted,whichmaybe: comparability ofthedata,orboundary. There are nojointventures, subsidiaries,oroutsourcing orleasingactivitiesthatcanmeaningfullyinfluencethe in Italyorabroad (Brazil). the GRIBoundaryProtocol, aimstocompriseallthecompaniesoverwhichTerna SpAexercises direct orindirect control, of December31,2008(seep.130forthedetailcompanies).Therefore, theSustainabilityReport,incompliance with Terna SpAandthecompaniesthatwere consolidatedbythedirect methodintheConsolidatedFinancialStatements as Unless otherwiseindicated,thedataandinformationin2008SustainabilityReportrefer totheboundarythatcomprises Boundary Whoever isinterested inknowingmore abouttheinformationcontainedinthisReportmaye-mail short/medium term,wasexaminedandapproved bythe Board ofDirectors. For thethird yearrunning,theSustainabilityReport,whichillustrates theresults andobjectivesofresponsibility forthe approximately 92%intermsoflengththeelectricalgridownedby theGroup. • approximately 94%intermsoftheGroup’s employees; • approximately 86%ofthetotalintermsGroup revenues; • In fact,Terna’s activitiesinItalyaccountfor: significantly reflects theeconomic,environmental, andsocialaspectsoftheentire Group. In thisregard, itshouldbestressed that,consideringthetotalweightofGroup’s activities,theinformationonItalyst phenomenon. of gatheringthedatawithsatisfyingqualitystandards, or of doingsoefficiently, orwiththelowsignificanceof The reasons forlimitationtotheItalianboundaryincalculating theotherG3indicatorsare connectedwiththeimpossibility Terna’s switchboard (Italy–+3906.83138111)andrequest theappropriate office, orsendaletterto: • • • • Product responsibility: PR8,PR9. Society: SO2,SO4,SO6,SO7,SO8. Human rights:HR6,HR9. Labour practicesanddecentwork:LA1,LA2,LA3,LA4,LA7,LA10,LA13,LA14. [email protected] , telephone ill 11 Introduction

2008

GRI Content Index 14 Sustainability Report 2008 5. Managementapproach andperformanceindicators commitmentsandstakeholderengagement 4. Governance, 3. ReportParameters 2. OrganisationalProfile 1. StrategyandAnalysis

Reportprofile Hmnrgt Humanrights

GRI CONTENTINDEX

oit Society

rdc epniiiy Product responsibility Dslsr nmngmn prah Disclosure onmanagementapproach Disclosure onmanagementapproach Disclosure onmanagementapproach

Dslsr nmngmn prah Disclosure onmanagementapproach 4.17 4.16 4.15 4.14 4.13 4.12 4.11 .0 4.10 4.09 4.08 4.07 4.06 4.05 4.04 4.03 4.02 4.01 2.10 2.10 2.09 2.08 2.07 2.06 2.05 2.04 2.03 2.02 2.01 1.02 1.01 .2 3.12 3.11 3.10 3.09 3.08 3.07 3.06 3.05 3.13 3.13 3.04 3.03 3.02 3.01

niomna efrac niaos Environmental performance indicators Economic performanceindicators Disclosure onmanagementapproach Disclosure onmanagementapproach aorpatcsaddcn ok 120 Labour practicesanddecentwork Commitment to external initiatives Commitment toexternal Social performanceindicators Report scopeandboundary Stakeholder engagement GRI ContentIndex Governance Assurance

42-43;45-51 Introduction Introduction Introduction Introduction Introduction Introduction Introduction Introduction Introduction Introduction Introduction Introduction 45-51 36-37 31-32 36-37 45-46 31-33 40-41 22-23 22-23 23-24 22-23 37-38 4-5 32;136 38;45 45 28 36 43 32 11 32 32 23 22 22 22 22 14 134 134 57

124 124 123 56 Page 125 86 87 72 73 Report application level CC+BB+AA+

Report on: Report on all criteria Same as requirement 1.1 listed for for Level B G3 Profile Disclosures 2.1 - 2.10 Level C plus and on: output 3.1 - 3.8, 3.10 - 3.12 1.2 4.1 - 4.4, 4.14 - 4.15 3.9, 3.13 4.5 - 4.13, 4.16 - 4.17

G3 Management Approach Management approach Management Approach Not required Disclosures for each disclosures for each

Disclosures output Indicator Category indicator category

G3 Report on a minimum Report on a minimum Report on each core G3 Performance of 10 Performance of 20 Performance and sector supplement

Standard disclosures Standard Indicators & Sector Indicators, including Indicators, at least one Indicator with due regard Report Externally Assured Supplement Report Externally Assured Report Externally Assured

output at least one from each from each of: economic, to the materiality Performance Indicators of: social, economic, environment, human Principle by either: a) and environment. rights, labour, society, reporting product responsibility. on the indicator or b) explaining the reason for its omission.

2002 in accordance CC+B B+ A A+

Self Declared MANDATORY

Third Party Checked Report Externally Assured Report Externally Assured Report Externally Assured OPTIONAL

GRI Checked GRI Content Index

15 16 Sustainability Report 2008 oeBudr Indicator Boundary Code LIST OFG3PERFORMANCEINDICATORS PUBLISHEDINTHISREPORT A4Group LA14 Group LA13 Group LA10 Italy LA8 Group LA7 Italy LA6 Group LA5 Group LA4 Group LA3 Group LA2 Group LA1 Group EN29 Group EN28 Group EN22 Italy EN19 Italy EN18 Italy EN17 Group EN16 Group EN14 Group EN13 Group EN12 Italy EN11 Group EN8 Group EN3-4 Group EC7 Group EC6 Group EC3 Group EC2 Group EC1 category according togender, agegroup, minoritygroup membershipand bodiesandbreakdownComposition ofgovernance ofemployeesper Average hoursoftrainingperyearemployeeby category regarding seriousdiseases place toassistworkforce members,theirfamilies,orcommunitymembers Education, training,counselling,prevention andrisk-control programmes in number ofwork-related fatalitiesbyregion Rates ofinjury, occupationaldiseases,lostdaysandabsenteeism,total health andsafety health andsafetycommitteesthathelpmonitoradviseonoccupational Percentage oftotalworkforce represented informaljointmanagement-worker whether itisspecifiedincollectiveagreements Minimum noticeperiod(s)regarding significantoperational changes,including Percentage ofemployeescovered bycollectivebargaining agreements or part-timeemployees,bymajoroperations Benefits provided forfull-timeemployeesthatare notprovided totemporary Total byagegroup, numberandrateofemployeeturnover genderandregion Total workforce byemploymenttype,contractandregion members oftheworkforce and materialsusedfortheorganisation’s operations,andtransporting Significant environmental impactsoftransportingproducts andothergoods sanctions fornon-compliancewithenvironmental lawsandregulations Monetary valueofsignificantfinesandtotalnumbernon-monetary Total weightofwastebytypeanddisposalmethod Emissions ofozone-depletingsubstancesbyweight Initiatives toreduce greenhouse gasemissionsandreductions achieved Other relevant indirect greenhouse gasemissionsbyweight Total direct orindirect greenhouse gasemissionsbyweight Strategies, current actions and future plansformanagingimpactsonbiodiversity Habitats protected orrestored protected areas biodiversity inprotected areas andareas ofhighbiodiversityvalueoutside Description ofsignificantimpactsactivities,products andserviceson protected areas andareas ofhighbiodiversityvalueoutsideprotected areas Location andsizeoflandowned,leased,managedin,oradjacentto, Total waterwithdrawalbysource Direct andindirect energy consumptionbyprimaryenergy source of seniormanagementhired from thelocalcommunity Procedures forlocalhiringatsignificantlocationsofoperationandproportion significant locationsofoperation Policy, practicesandproportion ofspendingonlocally-basedsuppliersat Coverage oftheorganisation’s definedbenefitplanobligations activities duetoclimatechange Financial implicationsandotherrisksopportunitiesfortheorganisation’s retained andpaymentstocapitalproviders earnings andtogovernments costs, employeecompensation,donationsandothercommunityinvestments, Direct economicvaluegeneratedanddistributed,includingrevenues, operating Ratio ofbasicsalarymentowomen byemployeecategory other indicatorsofdiversity oe Page Notes Data publishedstarting2008 Group dataonlyfor2008 Data publishedstarting2007 Data publishedstarting2007 Data publishedstarting2008 Some dataonlywithreference to2008 Group dataonlyfor2008 132-133 127-128 128-129 125-126 108-109 106-107 102-103 100-102 93-99 92-93 90-91 88-89 76-77 73-74 89-90 133 132 129 128 127 127 126 110 108 109 77 89 77 75 oeBudr niao Notes Indicator Boundary Code LIST OFG3PERFORMANCEINDICATORS PUBLISHEDINTHESUPPLEMENT FORTHEELECTRICUTILITYSECTOR(EUSS) Indicator Boundary Code EU12 Not EU12 Not EU10 Not EU8 Italy EU7 Not EU6 Italy EU5 Not EU4 Group EU3 Italy EU2 Not EU1 Group PR9 Group PR8 Group SO8 Group SO7 Group SO6 Group SO4 Group SO2 Group HR9 Group HR6 EU11 Not EU11 Not EU9 applicable applicable applicable applicable applicable applicable applicable applicable regulations theprovision concerning anduseofproducts andservices Monetary valueofsignificantfinesfornon-compliancewithlawsand privacy andlossesofcustomerdata Total numberofsubstantiatedcomplaintsregarding breaches ofcustomer sanctions fornon-compliancewithlawsandregulations Monetary valueofsignificantfinesandtotalnumbernon-monetary monopoly practicesandtheiroutcomes Total numberoflegalactionsforanti-competitivebehaviour, antitrust,and and related institutionsbycountry Total valueoffinancialandin-kindcontributionstopoliticalparties,politicians Actions takeninresponse toincidentsofcorruption corruption Percentage andtotalnumberofbusinessunitsanalysedforrisksrelated to and actionstaken Total numberofincidentsviolationsinvolvingrightsindigenouspeople and measures takentocontributetheeliminationofchildlabour Operations identifiedashavingsignificantriskforincidentsofchildlabour, source and bycountryorregulatory regime Average generationefficiency byenergy and industrialcustomers broken downbyresidential, commercial demand-side managementprogramme, Estimated energy (MWh)savedthrough demand-side managementprogrammes Estimated capacity(MW)savedthrough or regulatory regime broken down byenergy source andcountry electricity demandoverthelong-term, Planned capacity(MW)againstprojected power sites Provisions fordecommissioningofnuclear and promoting sustainabledevelopment providing reliable and affordable electricity Research anddevelopmentactivityaimedat industrial programmes including residential, commercial and Demand-side managementprogrammes long-term electricityavailabilityandreliability Management approach to ensure shortand framework Allocation ofCO regime mission anddistributionlinesbyregulatory Length ofaboveandunderground trans- mercial customeraccounts Number ofresidential, industrialandcom- regulatory regime primary energy source, bycountryand Installed capacity(MW),broken downby equivalent, broken downby carbontrading 2 emissions allowancesor Terna neitherpossessesnormanageselectricityproduction plants companies. Terna isaTransmission SystemOperator Demand sidemanagementprogrammes are carried outbydistribution companies. Terna isaTransmission SystemOperator Demand sidemanagementprogrammes are carriedoutbydistribution Terna hasnoactivitiesinthe fieldofelectricitygeneration Terna neitherpossessesnormanagesnuclearplants companies. Terna isaTransmission SystemOperator Demand sidemanagementprogrammes are carriedoutbydistribution schemes not subjecttoemissionsreduction obligationsoremissionstrading Terna hasnoactivitiesinthefieldofelectricitygeneration,andistherefore Terna neitherpossessesnormanageselectricityproduction plants oe Page Notes 134-135 23; 148 Page 67-69 58-59 135 135 135 135 134 134 82 57 57 ------17 GRI Content Index 18 Sustainability Report 2008 oeBudr niao oe Page Notes Indicator Boundary Code EU28 Not EU28 Italy EU27 Not EU26 Not EU25 Italy EU24 Not EU23 Italy EU22 Italy EU21 Italy EU20 Italy EU19 Italy EU18 Italy EU17 Italy EU16 Italy EU15 Italy EU14 Italy EU13 EU29 Not EU29 applicable applicable applicable applicable applicable judgments, settlementsandpendinglegal involving companyassets,includinglegal Number ofinjuriesandfatalitiestothepublic services accessing andsafelyusingelectricity literacy anddisabilityrelated barriersto Practices toaddress language,cultural,low access toelectricityservices toimprovewith government, ormaintain Programmes, includingthoseinpartnership by physicalandeconomicdisplacement facilities andtransmissionlines,broken down expansion projects related togeneration Number ofpeopledisplacedbynewor /restoration plans training programmes, andrecovery disaster/emergency managementplanand Contingency planningmeasures and involuntary displacement Approach tomanagingtheimpactsof stakeholders andoutcomesofengagement Participatory decisionmakingprocesses with health andsafetytraining contractors thathaveundergone relevant Percentage ofcontractorsandsub- Total subcontractedworkforce availability ofaskilledworkforce Programmes andprocesses toensure the that are beingreplaced compared tothebiodiversityofareas Biodiversity ofreplacement habitats percentage oftotalenergy Transmission anddistributionlossesasa source andbycountryorregulatory regime Average plantavailabilityfactorbyenergy Average poweroutageduration(SAIDI) Power outagefrequency (SAIFI) disconnection non-payment, broken downbydurationof Number ofresidential disconnectionsfor population inruralareas and urbanareas licensed distributionareas, broken downby Percentage ofpopulationunservedin cases ofdiseases Estimate madeforthefirsttimein2008 Terna neitherpossessesnormanageselectricityproduction plants business Performance indicatornotpertainingtotheelectricitytransmission Terna hasnodirect relations withthefinalusersofelectricityservice Terna hasnodirect relations withthefinalusersofelectricityservice Terna hasnodirect relations withthefinalusersofelectricityservice 102; 148 136-140 58-59 45-50 92-93 124 124 138 126 60 42 66 - - - - - seto h 3 omnayBudr oe Page Notes Boundary Commentary Guidelines involved Aspect oftheG3 INTEGRATION INTOTHEGRIG3GUIDELINES LIST OFADDITIONALCOMMENTSREQUESTEDBYTHESUPPLEMENTFORELECTRICUTILITYSECTOR(EUSS) PR1 HR5 LA7 LA4 LA2 LA1 EN22 EN21 EN20 EN16 EN8 EN1 approach management Environmental Electromagnetic fieldsandpublichealth service Strikes andcontinuityoftheelectricity Injuries ofcontractors tive bargaining agreements Contractor employeescovered bycollec- Turnover bycategory, ageandgender Contractor workforce PCB waste Cooling waterinthermalplants NO andSOemissionsperMWhgenerated CO Water usedinthermalandnuclearplants Inventory ofequipmentcontainingPCBs Radioactive waste Vegetation alongelectricitylines Use ofwater Ban onequipmentcontainingPCBs 2 emissions Group Not applicable Not applicabile Group Not applicable Group Not applicable Group Italy Italy Italy Italy Italy Italy Figure estimatedforthefirsttimein2008 power plants Terna neitherpossessesnor managesthermoelectric Terna’s activityproduces noNOorSOemissions Group datapublishedonlyfor2008 plants Terna neitherpossessesnormanagesnuclearpower plants Terna neitherpossessesnormanagesnuclearpower Data publishedforthefirsttimein2008 128-129 67; 93 121 127 126 126 152 101 43 87 89 87 - - - - 19 GRI Content Index

2008

Terna’s profile 22 Sustainability Report 2008 Activities, organisation andownershipstructure (1) This situation relating This toDecember31,2008does notincludeEnel’sacquisitionofELAT (now calledTELAT), whichoccurred (1) The variousstagesleadingto thecurrent set-upincludedtheincorporationofTerna ParticipaçõesSA(April2006),the licences fortheplanning,construction, management,maintenanceanddevelopmentof thegrid. of 3,330kmelectricitylines ontheBraziliannationaltransmissiongrid(asatDecember 31,2008)andholdthirty-year field ofelectricitytransmission in Brazil), theTerna Group exercises control overanumberofwhollyorpartiallyownedcompanies,whichalloperateinthe Through itsdirectly-owned Brazilian subsidiary, Terna ParticipaçõesSA(whichislistedontheSãoPaoloStockMarketin commissioning, studiesandresearch inthefieldofelectrotechnology andenergy. Terna alsohasa24.4%holdingincompany calledCESISpA,whichbuildsandmanageslaboratoriesfortests, values thataccompanyTerna initsprospects fordevelopment. operated withinItaly’slargest group intheelectricitysector:itis,therefore, a combinationofinnovationandtradition,t strategic andmanagerialautonomy, strengthened bythetechnicalandmanagerialskillsitacquired inthepast,whenit Enel Group, ofwhichithadpreviously beenapart. Today, Terna isanentitywhichcompetesinthemarketswithtotal, the roles ofgridmanagerandowner(saveforafewminorsections)alsocoincidedwithTerna’s independencefrom the from GRTN thefunctionsasgridmanagertogetherwithitsrelated humanresources andmaterials.Thereunification of June 2004onwards, andwastheownerofalmost entire NationalTransmission Grid.InNovember2005itacquired In linewiththeDecree oftheItalianPrimeMinister(dated May11,2004),Terna waslistedontheItalianStockMarketfrom Amongst otherthingsthisprocess assignedthefunctionof system operatortoGRTN, acompanyunderpubliccontrol. Terna’s current companystructure inItalyistheresult ofaprocess liberalisingtheelectricitysector, launchedin1999. planning, buildingandmaintenanceactivitiesontheGrid. transmission anddispatchingalongthehigh-very-high-voltagegridthroughout Italy. Itisalsoresponsible forthe licence,TernaUnder government has therole ofItalianTransmission SystemOperator:itisresponsible forelectricity In ConsolidatedwiththeNetEquitymethod. (*) DETAILS ASAT APRIL30,2009 with over98%ofthenationalelectricityinfrastructures. Its mainoperationsare inItalyandBrazil.ItisthemainownerofNationalhigh-voltageelectricityTransmission Grid regards thenumberoflinesitmanages.Itsheadoffices are inRome,Italy. Terna Group: isaninternationally-sized itisoneoftheleadingTransmission SystemOperators(TSO)intheworldas phases ofathree-phase current electricityfieldusedinthealternating grid. three conductorsorgroups means“threesome”) ofconductors(inItalian“terna” equippedtocarryeachofthethree The Terna Group isalarge gridoperatorforthetransmissionofelectricity. ThenameTerna derivesfrom theclusterof of lines,371transformerstations,eighteeninterconnection lineswithforeign countries(detailsasofDecember31,2008) 5 99 0%10 100% 100% 100% 99.9% 35% 100% TRANSMISSORA in theworldasregards thenumberofkilometres oflinesunder management. owns about18,583kmofhigh-voltage lines.Thankstothisacquisition,Terna confirmsitspositionas leadingindependentoper Italy DE ENERGIA BRASNORTE Terna isthemainowner(over98%)ofNationalhigh-voltageelectricityTransmission Grid(NTG)with39,456km INTERNATIONAL * 52.58% TRANSMISS ALTO URUGUAI EMPRESA DE (ETAU) Ã * O DO Brazil together withaccessoryservices. Alltogether, thesecompaniesare theowners 100% SERVI TERNA TERNA SPA Ç OS TELAT ENERGIA DOOESTE TRANSMISS EMPRESA DE (ETEO) Ã O DE 66% NOVATRANS ENERGIA TERNA PARTICIPAÇÕES ator inEurope andseventh on April1,2009.TELAT TRANSMISSORA NORDESTE SUDESTE (TSN) wo 1 . SIZE OFTHEORGANISATION ASOFDECEMBER31,2008 km of lines 39,456 39,456 km oflines Total - capitalisation-shares (millionsofeuro) * 199.4 1,195.8 Turnover inmillionsofeuro (netofpass-through items) 3,524 Number ofemployees EnelSpA, whichholds5.1%. • Pictet Asset Management SA,whichholds5.2%oftheshare capital; • The majorshareholders afterCassa DepositiePrestiti are: than lastyear(35%).Terna hasthehighestpercentage offoreign investorsamongtheItalianBlueChips. 63% oftheshare capitalisItalian-owned, whereas 37%isheldbyforeign funds,apercentage which isslightlyhigher joint-stock companyinwhich theItalianMinistryofFinancehasa70%shareholding). Terna’s relative majorityshareholder onthesamedate,withashareholding of29.99%,wasCassaDepositiePrestiti (a 440,199,936 euro, represented by2,000,908,800 ordinary shares, eachwithafacevalueof0.22euro. Terna SpAhasbeenlistedontheItalianStock MarketsinceJune2004.InFebruary2009,theShare Capitalstoodat Ownership structure (*) CalculatedontheaveragepriceinDecember2008ofTerna SpAshares. intercompany dealingsbetweenTerna ParticipaçõesandTerna willcease. e Transmissão SA.Whenthesaleiscomplete(thoughthisnotexpectedbefore theendofSeptember2009),all On April24,2009,anagreement wassignedforthesaleof66%shareholding inTerna Participações toCemigGeração companies andestablishedthecompanycalledTerna Serviços. Paolo StockMarketinOctober2006.Subsequently, Terna Participaçõesacquired thecontrol overorstakesinother subsequent transfertoitofshare parcels intheindividualsubsidiariesandlistingofTerna ParticipaçõesontheSão and inthefirst4monthsof2009 Significant eventsduringthe2008financialyear OnApril24,2009,anagreement wassignedforthesaleof66%share capitalinTerna Participaçõesto • Through itssubsidiarycompanyLovinaParticipaçõesSA,Terna Participaçõespurchased theentire share capital • OnJanuary25,2008thecompanycalledTerna ServiçosLTDA was setup;99.9%oftheshares are heldbyTerna• Brazil OnDecember19,2008,anagreement wassignedforthe transfertoTerna ofthehigh-voltageelectricitygrid • OnDecember11,2008,thesubsidiaryRTL-Rete diTrasmissione LocaleSpA(100%controlled by Terna) was • Italy of theFinancialStatementsfor2010.TheShareholders thenconfirmedLuigiRothasChairmanoftheCompany. On April28Terna’s Shareholders’ MeetingappointedanewBoard ofDirectors whosemandatewillendwiththe approval New Board ofDirectors Participações andTerna willcease. Cemig GeraçãoeTransmissão SA.Whenthesaleiscomplete,allintercompany dealingsbetweenTerna incorporation withthenewly-acquired ETEO. Nacional deEnergia Elétrica).Witheffect from June2,2008,LovinaParticipaçõesSAwasmerged through completed onMay30,2008subsequenttotheapproval ofthelocalregulating authority(ANEEL,Agência of thecompanycalledEmpresa deTransmissão deEnergia doOesteLTDA (“ETEO”).Thetransactionwas Participações. operator inEurope andseventhintheworldwith over61,000kmofelectricitylinesunderitscontrol. belonging toELAT -Enel LineeAltaTensione (18,583km) Terna confirmsitspositionastheleadingindependent owned byEnelDistribuzione.ThistransferwascompletedonApril1,2009.Withthepurchase oftheassets fully merged intoTerna SpA. tl rzlGroup Brazil Italy 33042,786 3,330 1 3,734 210 4,559 - 1,395.2 23 Terna’s profile 24 Sustainability Report 2008 • • determining thetransmissionpriceare basedonthree categoryareas: These regulated revenues belonging tootherowners,telecommunicationservicesandconsultancyinthetransmissionsector. from otheractivities,whichmainlyconsistoftheprovision ofservicestothird partiessuchasmaintenancetolines revenues comefrom activitieswhosepricesare fixedbytheAuthorityforElectricityandGas(AEEG)only7%come In 2008theTerna Group achievedrevenues for1,395millioneuro, including1,196million inItaly. About93%oftheItalian Revenue structure and regulatory framework voting rightsintheappointmentofBoard ofDirectors foraquotaabove5%oftheshare capital. addition, inorder tosafeguard Terna’s independenceandimpartiality, nooperatorintheelectricitysectorcanexercise Development, hastherighttoopposepurchase ofshareholdings exceeding5%byentitiesnotunderStatecontrol. In companies are involvedintheprocess ofliberalisation,theMinistryFinance,inagreement withtheMinistryofEconomic processes andestablishescertainrestrictions regarding shareholding andvotingrights.Similartoothercaseswhere Terna’s Bylawsincludespecificprovisions relating totheparticipationofStateincompaniesinvolvedliberalisation over Terna SpA. agreements relating toitsshares. OnApril19,2007,CassaDepositiePrestiti SpAascertainedthatithadactualcontrol No otherentityhasahigher-than-2% stakeinTerna’s share capitalandthere isnoknowledgeofanyintercompany • quantity ofelectricityactuallytransportedbothcontributetocalculations.The the beginningofeachfour-year regulatory period.Thecostsplusmargins whichare acknowledged toTerna andthe The unitaryamountsforthevariouspriceitemsare calculated annuallybyAEEG,onthebasisofregulations stipulatedat transported (withdrawn,insertedordispatched)onthegridownedbyTerna. paid bydifferent categoriesofelectricitysectoroperators(distributors,producers) basedonthequantityofenergy Total 100% TERNA’S BODYOFSHAREHOLDERS security oftheelectricitysystem). Development Plan)andtheimprovements tothemanagementsystem(e.g.ITsystemsortechnologiesincrease the infrastructures (linesandstations)aimedattherenewal ordevelopmentofthegrid(projects includedinthe Grid updated onthebasisofnetinvestmentsmadebyTerna. Theseinvestments includetheconstructionofelectricity the variationindeflationaryfactorforgross fixedinvestments(issuedbyIstat-ItalianStatisticsInstitute)andis is estimatedtobeabout25% oftotalrecognised costs; completed investments,alienations andthecompletionofusefullifeassets.Theamortisation remuneration quota item coveringthesecosts,which in2008amountedtoaboutathird ofthetotalacknowledged costs(AEEGfigures), is general, tolabourcostsandthe costsforprocuring thosegoodsandservices,thatare notconsidered investments.The amortisations RAB remuneration operating costs expected torise; programme ofinvestmentsoverthecomingyears,incidenceRAByieldtotalacknowledgedcostsis In 2008,theRABremuneration represented about41%ofthecostsacknowledgedto Terna. InlinewithTerna's categories thatare attributedparticularstrategicimportance. regulatory period(2008-2011).Thisyieldisincreased by2or3percentage pointsforthose developmentinvestment The RABisremunerated bytheAEEGatarateofreturn linkedtothoseinthemarkets,andisfixedat6.9% forthethird Enel Relevant InstitutionalInvestors(Pictet) CdP -CassaDepositiePrestiti Other InstitutionalInvestors+Retail . Annualadjustmentsare made totheamortisationfigures, whichare acknowledged asaneffect ofnew, . Theseincludetherunningcosts relating totransmission,dispatchingandmeasuring activitiesand,in . ThevalueoftheRAB(RegulatedAssetBase-Netinvested capital)isrevalued annuallyinlinewith are generatedbyvariouspriceitems:themainpaymenttoTerna isfor cost items 59.7% taken intoconsiderationwhen transmission costs 5.1% 5.2% 29.99% , wind powerproduction are includedintheoverallfigure for regulated revenues andamounttoabout5millioneuro. The bonusesforachievingthe 2008improvement objectivesinforecasting thenationalelectricity requirements andin value oftheincentiveprovided toTerna. aspect oftheincentiveschemes isthat,whentheobjectivesare achieved,thebenefits fortheserviceusershasamultiple in thevolumesofresources obtainedontheMDSwith aviewtoreducing theweightofupliftforendusers. Animplicit in termsoftechnicalreliability andeconomicsavings.Theincentivesplannedfor2009,example,relate toareduction The AEEGhasintroduced specificbonus/penaltyschemesaimedatproviding anincentivetowards improving theservice, Incentive schemes an averageuser. Report 2008),thetransmissioncosts(regulated marginalrevenues) accountforabout2%oftheelectricitybill the endcustomersofelectricityservicethrough theitemcalledTRAS. In linewithcurrent regulations, themajorityofcostsacknowledged toTerna are invoicedbythedistributioncompaniesto Transmission costsintheendconsumer’sbill page 81. receivable andpayableinvoicing.Onthispoint,refer totheparagraph“Relationswithelectricitysectoroperators”on on relations withthesectoroperatorsasregards thecommercial andadministrativemanagementofcontracts Even iftheyhavenoeffect onTerna’s profitability, thepass-through revenues haveanimportanteffect (duetotheirsize) for theregulation oftheimbalancesandforpurchases/sales transactedbyTerna ontheelectricitymarket. incurred byTerna forthedispatchingservice,whichcannotbecovered through thebalancebetweencostsandrevenues, The uplift,whichistransferred totheendusersintheirelectricity bills,corresponds tothepartofpass-through costs charges incurred inorder toobtainthe resources ontheMDS,whichduring2008amountedtoabout2,000millioneuro. A significantentryunderthesepass-through items isrepresented bytheso-calleduplift,paymenttocovernet Pass-through items,whichare valuedbyapplyingspecifictariff rates,are regulated byTerna withthesectoroperators. In 2008,thepass-through revenues andcostsamountedtoanoverallfigure of6,545millioneuro. these items. collects from producers anddistributorspassesontootherownersofnetworkportionstheNTGisalsoapart which donothaveaneffect onthemarginal revenues inTerna’s IncomeStatement.Theremuneration quotawhichTerna economic valueofthesetransactionsshouldhaveafinalbalancezero forTerna: theyare, therefore, pass-through items, the saleandpurchase ofenergy, particularlyonthe MarketforDispatchingServices(MDS).Theregulations statethatthe In order tomaintaintheelectricitysysteminbalance,Terna hastoperformcertain regulatory actions.Theseactionsinvolve Revenues forpass-through items to thatuseddefinetheannualtariff levels. revenues isinpracticefixedbeforehand; inthiscase,therevenues canonlyvarybyanamountequalto+/-0.5%,compared also dependsonthevolumeofelectricitytransportednationalgrid,toarevenue-cap systemwhere thelevelof that intheelectricitytransmissionsectorthere hasbeenachange from aprice-capsystem,where thelevelofrevenues With theintroduction ofthis would askTerna fortheproportion topaybackanyhigherearnings involumesoverand aboveanexcessfigure of0.5%, • would supplementTerna’s remuneration fortheproportion involumesoverandaboveanexcessfigure of0.5%,ifthe • 2011). Thismechanism,whichTerna decidedtosubscribeto,stipulatedthattheAuthority: optional accessmechanismforpartiallysterilisingthevolumeeffect fortheremaining partoftheregulatory period(2009- relating tothetrends inenergy demandandledtheAEEGtoissueResolutionno.ARG/Elt188/08whichintroduced an The sharpreduction inproduction activity, whichstartedinthesecondhalfof2008,provided amore uncertainpicture in electricityconsumption:theymayactuallybeaboveorbelowtheexpectedfigure basedonthe Once theunitaryamountsforvariouspriceitemshavebeendefined,Terna’s revenues thendependontheactualdynamics if theactualvolumeswere higherthanthoseusedtoestablishthetariffs for2009; actual volumeswere lowerthanthoseusedtoestablishthetariffs for2009; and itsendusersbyreducing tariffs. periods, theefficiency gainsachievedthatexceededtheplannedefficiency factorwere equallyshared betweenTerna stands at2.3%fortransmissionactivitiesand1.1%dispatchingactivities.Attheendofprevious regulatory subject toapricecapmechanismi.e.itisrevalued onthebasisofinflationandreduced byanefficiency factor, which mechanism guaranteeingthelevelofrevenues According toAEEGinformation(Annual for theperiod2009-2011,onecanstate volume of business. of 25 Terna’s profile 26 Sustainability Report 2008 (1) Thedifference betweentheItaliaandTerna SpArevenues isduetoconsolidationaccounting. (millions ofeuro) Terna Revenues2008 tl ,9. 8. 85.7 1,195.8 14.3 199.4 100.0 1,395.2 Terna SpA - Italy - Brazil Terna Group ofwhich: Margin revenues AuthorityalsoissuedResolutionno.188/08,whichestablishedthe possibilityofalsoapplyingtheextra-remuneration the • As regards regulating thequalityintransmissionservice,AEEGissuedResolution no.341/07,whichdefineda • Other incentivemeasures astruhrvne ,4. usersofdispatching, other 6,545.1 Pass-through revenues betv er eido aiiyFrtya Rneo eaiis Resultin2008 Rangeofpenalities/ Firstyear Periodofvalidity Year Objective dispatching purchased for amount ofresources Reduction inthe demand in forecasting Improvement wind power production from in forecasting Improvement met fortheinvestmentasfixedbyAuthorityonbasisofinformationsuppliedTerna. Terna whichare ofparticularstrategicimportanceforthesystemandprovided thattheoperationalstart-updeadlineis mechanism toinvestmentsthatare underwayatthetime,but restricting thistoacategoryofinvestmentsproposed by service willbehadfrom 2010onwards; reference levelswere calculatedandthefirsteconomiceffects ofthisschemetoregulate thequalityoftransmission of theindicator, netofan excessrange(+/-10%ofthetarget valueforENSRand+/-5% forNDU).During2008the amount (15,000euro foreachMWhin thecaseofENSR)bydifference betweentheactual valueandthetarget value at alevelofeachTransmission OperationalArea (TOA).Thebonus/penaltyiscalculatedbymultiplyingapre-established energy notsupplied”)andNDU(i.e.“numberofsupplyoutagesperuser”)measured respectively atanationalleveland framework ofincentivesandpenalties,applicablefortheperiod2008-2011,linkedtotwoindicators:ENSR(i.e“reference amn oCRfrueo rd1005 87 7. distributorsandusers 76.0 88.7 1,060.5 DIS andMIScomponents Other energyrevenues – Payment toCTRforuseofgrid (1) of which: 1,196.1 100.0 85.7 100.0 1,196.1 of which:

2007 2008-2011 2008 Max. penalty 2.5 Mln Bonus Max.penalty2.5Mln 2008 2008-2011 2007 Bonus Max.penalty1.5Mln 2008 2008-2011 2007 ARG/Eltno.206/08) (eouinn.310) a.bns5Mn 1.9Mln Max.bonus5Mln (Resolutionno.351/07) 3Mln Max.bonus3Mln (Resolutionno.351/07)

2008 2009 2009 Max.penalty5Mln 2009 2009 2008 fitouto cnmcefcs bnss(uo (euro) bonuses(euro) economiceffects of introduction (Resolution of Max.bonus40Mln (Resolution of 48.4 4.0 3.5 usersof dispatching 3.5 4.0 48.4 intheeconomicdealings gridowners ofinputdispatching

on Italy revenues on Group revenues Counterparties onGroup revenues on Italyrevenues

(withdrawalandinput) will beproduced % Composition their powerplantstothetransmission grid. Through ananalysis oftheconditiongrid,Terna alsoidentifieshowoperators submittingarequest canbestconnect consultation withthelocalauthorities leadingultimatelytoplanningpermissionapproval. year totheMinistryforEconomic Development;Terna thenproceeds withtheauthorisationprocess, includingprior implementation are includedin the NationalTransmission Grid’sDevelopmentPlanthatissubmittedforapproval each safe gridoperation,toreduce congestionandtoimprove servicequalityandcontinuity. Thenewworkprojects requiring critical areas andtoidentifynewworkprojects required toguarantee thesystem’ssuitabilitytomeetdemand,ensure By analysingtheelectricityflowsalonggridandmaking forecasts aboutdemand,Terna isabletoassessthegrid’s Planning theDevelopmentofGrid the NationalControl Centre mayalsodecidetoreduce thedemand. Control Centres toadjustsupplyandthegrid’sconfiguration.To avoidtheriskofgriddegenerationandextendedoutage, or ingridsections,trends indemandthatdiffer from forecasts) by sendingorders totheproducers andtotheRemote dispatching taskandtakesactiontocorrect anydifferences intheexpectedschedule(breakdowns inproduction plants National Control Centre coordinates othercentres across theterritory, monitorstheElectricitySystem,performs dispatching andverifyingpowertransfersforallthelinesonth free energy markettransactions(ItalianElectricityMarketandover-the-counter contracts),acquiringresources for be unavailable,forecasting thenationalelectricitydemand,comparing forecasts withtheproduction plancomingfrom Preparation forreal timeoperationincludesplanningforvariouslengthsofwhenthegridandproduction plantsmay energy supplied(domesticandimportedproduction) andconsumptionbyendusers. The fundamentalaspectofgridoperationisrepresented byconstantlymatchingenergy injectionandwithdrawal,i.e. Operation flows, toensure aconstantbalancebetweenelectricitysupplyanddemand. transmission serviceisgridoperation:themostimportantaspectofthisrepresented bythereal timecontrol overpower and stationsthatare connectedtoproduction plantsanddistributionnetworks.Thesecondimportantelementofthe distribution needsthroughout theterritory. Thisinvolvesthe Energy transmissionrequires anefficient electricitygrid,capableofmeeting electricityconsumptiondemandsand are mostlyundertheItalyOperationsDivision. achieved bythecombinedeffort ofvariouscompanydepartmentswhichare responsible fortransmission-related tasksand points, whichare normallyelectricitystationsconnectedtothedistributionnetwork.Atanoperationallevel,thisactivityi into thegridbyItalianproduction plantsandimportedfrom abroad alonginterconnection lines,tohigh-voltagewithdrawal Electricity transmissiononthenationalnetworkrepresents Terna’s core business.Itspurposeistotransferelectricityput Core organisationandprocesses inItaly TERNA SPA’S ORGANISATION CHART ASAT DECEMBER31, 2008 and Contracts Purchasing Development oftheGrid Planning and Finance and and International Activities and International Control Business Development AUDIT Administration Engineering DIRECTOR OFOPERATIONS ITALY CHIEF EXECUTIVEOFFICER Resources and Organisation Human CHAIRMAN planning, constructionandmaintenanceoftransmissionlines Corporate Legal and e transmissiongrid.Inthereal timecontrol phase,the Affairs and Management Dispatching Company Security Institutional Affairs INVESTOR RELATIONS Regulatory Affairs Plant Maintenance Relations and Communi- External cations s 27 Terna’s profile 28 Sustainability Report 2008 and isamemberoftheItalianNationalCommitteebelongingto worldwide operatorscandiscusstopicsrelating tothetechnical, economicandregulatory aspectsofelectricitysystems, European Group ofelectricityregulators formarketintegration.Furthermore, Terna alsoparticipatesinthe and theirinterconnection. Terna isalso amemberofthe to compare, coordinate andsetstandards andcriteriaforthetechnicalcommercial management oftransmissiongrids such asAEIT(Associationof Electrotechnical Engineers),whichprovide themwith refresher coursesintheirfields. within thissector. Terna’s employeeswhohavetechnicalresponsibilities are oftenmembersofprofessional associations, Terna isalsoanactivememberof statistical datatopromote abetterunderstandingaboutcommoninterest markets. advice relating tobusinesswithintheforeign markets andinencouragingthereciprocal exchangeofinformationand ANIE’s commitmentisalsotoraisetheawareness ofitsMembersandtorespond toTerna’s request inproviding technical electricity gridoperatorsinforeign countriesregarding theirrespective objectivesinrelation development. tointernational includes thedefinitionofcommoninitiativeswithrepresentatives from andfinancialworldalsowith thegovernment Electronics andElectrotechnical Companies)belongingtoConfindustria. Theagreement, whichwilllastforthree years, Moreover, inApril2008,Terna signedaMemorandumofUnderstandingwith Terna continuestobelongConfindustria, which isItaly’smainorganisation representing employers inindustry. National Associations Terna isanactivememberof Bodies International intention tomakecontinuingprogress inthisdirection. this importantnetworkbearswitnesstothecommitmentthatTerna showstowards sustainabilityandrepresents its nearly 50%ofthecapitalisationonItalianStockExchange,and81volunteermanagers.Terna’s presence within entrepreneurial, socialandculturalsectors,cancountonthesupportofits61companiesthatrepresent government, whose importanceandcommitmentindevelopingsocialresponsibility inItalyisrecognised bythemajorplayersin ideas onsocialresponsibility andpromoting dialoguebetweenenterprisesandthenon-profit world.TheFoundation, in January2008.TheFoundationcontinuestodemonstratethecommitmentshownbySodalitasoveryearssharing Terna isoneofthecompanieswhichcontributedtowards theFoundation fortheDevelopmentofBusiness,established Sodalitas Membership inAssociations identify andimplementpreventive measures whichcanadequatelylimitsuchrisks. business, including,inparticular, riskslinkedtooperatingprocesses andtechnologicalinfrastructures. Theaimhere isto Specific departmentsare responsible foranalysing,assessingandmonitoringrisksassociatedwiththeoperational and operationsontheelectricitymarketproduce economictransactionsforwhichTerna itselforganises settlement. Terna’s commercial dealingswithothersectoroperatorsincludethetransportofenergy from producers todistributors Other activities customers. the majorityofCompany’shumanresources (nearly70%)whoare alsoinvolvedinmaintenanceworkfornon-regulated Terna performspowerlineandstationmaintenanceorganised through eightTransmission OperationalAreas whichemploy Maintenance also adoptsomeinnovativesolutions.Theconstructionofnewplantsystemsisgenerallyoutsourced. methods andtechnicalspecificationsforthecomponentsmaterialstobeusedinbuildingstationslines.Itmay particular, financialresources itdefineswhichexternal are required, prepares theproject budgetandestablisheswork power lines.Asregards theconstructionofplantsystems,Terna prepares constructionprojects forauthorisedworks;in construction standards andperformancespecificationsforequipment,machinery, electricitystationcomponentsand Terna definestheengineeringstandards forthevariouspowerplantsconnectedtogridandinparticular Construction UCTE CEI and (Comitato Elettrotecnico Italiano),aninstitutionthatestablishestechnicalstandards ETSO , twoassociationsofTSOsfrom variousEuropean countrieswhoseaimis ERGEG WEC Implementation Group, whichwascreated withinthe (World Energy Council). ANIE (Italy’s NationalAssociationof CIGRE , where attractive yield forinvestorsandoneofthebest inthissector. reference year, andhalf-yearly coupons,providing anadvanceandabalance payment.Thispolicyrepresents avery Terna confirms itsdividendpolicythatenvisagesaminimumannual increase inthedividendof4%,taking2005as Dividend policy have significanteffects onthe consolidated financialcharges. in theGroup’s rating,although itisexpectedtoremain stablethroughout theperiodofPlan.Any downgradewillnot Financial ratioswillworsenduetotheincrease indebtfollowingtheELAT acquisitionandthiscouldleadtoadowngrade and nearlyalltherequirements ofthePlan,atextremely competitivecosts. In additiontoitscurrent liquidassets,Terna hasalready foundadequatefinancial resources tocoverthepurchase ofELAT The increase inborrowing envisaged duringtheperiodofPlanstandsat2.4billioneuro. at theendof2008(preliminary figures) to58%. between borrowing towards thefinancialsystemandtotalloansfrom credit sources andshares) has risen from 41% to itsfinancialleveragewithinthecapitalstructure efficiency. Terna SpA’s gearing(financialleveragedefinedastheratio Cash absorptionlinkedtothepurchase ofELAT, itsinvestmentplansanddividendpolicieshavemadeanimprovement Capital structure forecasts overthenexttwelvemonthswouldindicateafurtherfallindemand. As regards energy consumption,there wasadrop inelectricitydemandduring2008forthefirsttimesince1981and Terna alsoundertakestomaintaincurrent qualitystandards relating totransmissionanddispatchingservices. carrying outworkontheTLCnetworkandITsystems,thereby increasing assetprotection. Defence Planhaveincreased by40%compared totheprevious Planwiththeaimofimproving reliability andefficiency by bestpractices.Insafetyterms,investmentslinkedtothe the levelslaiddowninGridCodeandwithinternational Terna mustguaranteethesafetyofelectricitysystemandhighestqualityintransmissionservice,linewith Quality andSafetyoftheGrid with areduction of27%inregulated costsperkilometre oflinesduringtheperiodPlan. From 2008to2013assetsare envisagedtogrow byover40%,whichwillallowasignificantimprovement inefficiency personnel oninvestmentactivities. costsandtherestrictionsrationalisation ofexternal onincreases costs byoptimisingresources tointernal andinsourcing As regards costs,thePlanalsoenvisagesthatcostswillremain stabledespitethestrong increase inassets,duetothe in Italyduetotheincrease intheRABandrecognised costs. thanks totheextensionitsreference area withthepurchase ofELAT butalsotothehigherlevelsofregulated revenues As regards revenues overtheperiodfrom 2008to2013,anaverageannualincrease of5%isenvisagedfortheGroup, end ofthefive-yearPlan. Increased revenues andstrictercostcontrols willhelptheGroup’s EBITDAmargin toincrease from 71%to77%atthe Improvement inmargins Trino-Lacchiarella lines(Piedmont/Lombardy). • upgrading oftheelectricalsystemsaround Valcamonica; • restructuring thegridinNorthCalabria; • Santa Barbara-Casellinalines,betweenthecitiesofFlorence andArezzo; • Foggia-Beneventolines(Apulia/Campania); • Dolo-Camin lines(Veneto Region); • upgradinginthecityofTurin; grid • Sorgente-Rizziconi connection(Sicily/Calabria); • underwatercablesbetweenSardinia andmainlandItaly(SAPEI); • The mostimportantinfrastructuralworksinItalywillinclude: announced lastyear. Grid developmentinvestmentsrepresent 77%ofthetotalandstandat2.6billioneuro, whichisabovethe2.5billioneuro last year. During thefive-yearperiod,over3.4billioneuro willbeinvested,witha300millioneuro increase overthefigures announce Development oftheNationalTransmission Grid plan forthedevelopmentandexpansionofactivitiesbothinItalyabroad. at alaterdate.ThePlansetssafetyandreliability objectivesfortheelectricityserviceandenvisagesasignificantinvest analysts onFebruary3,2009.ThePlan,however, excludestheeffects ofthesaleTerna Partecipações,whichwasdecided The Terna Group’s strategicvisionisoutlinedinthe2009-2013StrategicPlan,whichwaspresented toinvestors andfinancial The 2009-2013StrategicPlan ment d 29 Terna’s profile 30 Sustainability Report 2008 Italy, anelectricityhubfortheMediterranean feasibilitystudyforthenewsubmarineinterconnection between ItalyandMaltainthecompletionphase. • operatingphaseof thenewsubmarineinterconnection betweenItalyandTunisia underway, thankstothe • North AfricaandtheMediterranean Terna isintheprocess inthearea, ofassessing,together withsomegovernments procedures forpossibledirect • contractsproviding technicalassistanceandconsultationservicestooperatorslocalinstitutions • feasibilitystudyregarding the thenewsubmarineinterconnection betweenItalyandCroatia isnearingcompletion, • followingthesigningofagreement betweenTerna andEPCG,thenewsubmarineinterconnection between • Europe South-Eastern developments andcollaboratingwithinstitutionslocalelectricityoperators. interconnections withtheseareas andstrengthen Italy’sstrategicrole, Terna isworkingveryhard towards making EuropeSouth-Eastern andNorthAfricathatoverlooktheMediterranean.Inorder topromote thecreation of Owing toitspositionandgeographicalcharacteristics,Italyrepresents theidealelectricityhubforcountries in levelofimportsintoItalyelectricitygeneratedbyrenewable the energy sources, facilitatingtheachievement • differentiating supplyareas andresources, inparticular, byreducing dependenceongas; • allowing electricitytobeimportedatlowerpricesthebenefitofItaliancompaniesandfamilies; • improving competitivenessinthenationalelectricitymarket; • strengthening thesafetyinsuppliesandoperationofnationalelectricitysystem; • Electricity interconnections playanimportantstrategicrole forItalybecausetheycontributetowards: Italy withGreece (1)andFrance(1). connecting ItalywithFrance(4lines),Switzerland(9),Au The Italianelectricitytransmissionnetworkhasseveralinterconnections withforeign countriesviaoverlandlines, INTERCONNECTIONS WITHFOREIGNCOUNTRIES 4 France,9Switzerland,2Slovenia, 1Austria. 16 interconnections over theAlps: establishment ofacompanyinwhichTerna andthelocaloperator(STEG)holdequalstakes; involvement inthedevelopmentoflocaltransmissionnetworks. investors are upandrunninginAlbaniaKosovo, BosniaandSerbia; following theagreement signedinOctober2007 between Terna andHEPOPS; Italy andMontenegro entered intotheimplementationphase; of theobjectivesfixedbyEUfor2020in“third energy package”. France Tunisia stria (1)andSlovenia(2),submarinelinesconnecting Slovenia Interconnections inthestudyorimplementationphase Existing submarineinterconnections Interconnections operatingfrom 2009onwards (SAPEI) Croatia Malta Montenegro Albania Greece For more ontheSelf-RegulationCode, seeBorsaItaliana’swebsite( paragraph “Ownershipstructure” (p.23). This chapterprovides anoutline,withprecise references where necessary. Some informationisalsoincludedinthe by theArticlesofAssociation. The Board membersshallpossess the Directors, orbyshareholders who,ontheirownortogetherwithother shareholders, represent atleast 1%ofthecapital. members designatedbyshareholding minorities.Slatesofcandidatesmaybepresented by theoutgoingBoard of mechanism, whichisintendedtoguaranteethat,withinthe The CorporateBylawsrequire theentire Board ofDirectors tobeappointedinaccordance withthe“ Board Members Appointed bytheShareholders’ Meeting,theBoard ofDirectors seesto Structure, appointment,andduties Board ofDirectors provisions ofItalianLawasregards companieswithlistedshares. Itprovides for: Terna’s structure governance isfoundeduponthetraditionaladministrationandcontrol model,andcomplieswiththe Statutory bodies available atTerna’s website( Terna’s characteristicsare governance illustratedintheGoverna make suitableconsiderationofalltheinterests involved. of thesocialrelevance oftheactivitiesinwhichGroup isengaged,andtheneed,incarryingouttheseactivities,to isorientedtowardsThis systemofcorporategovernance theobjectiveofcreating valueforshareholders, intheawareness Code, withthepertinentrecommendations formulatedbyCONSOB,and,more generally, bestpractice. withinternational The Company’scurrent systemistherefore corporategovernance inlinewiththeprinciplescontainedSelf-Regulation system forcompliancewiththecommitmentsprovided forbytheCode. Regulation Code).In2007,itapproved –andsubsequentlyimplementedtheadjustmentsofcorporategovernance Terna adheres tothenewSelf-RegulationCodeoflistedcompaniesaspublishedbyBorsaItalianainMarch 2006(Self- Terna’s system corporategovernance structureGovernance appointment hasnotasyetbeenexercised. TheBoard currently inoffice, appointedonApril28,2008, has added: hisappointmentisreserved totheItalianstatebyvirtueofregulations onprivatisations.Thispowerof years, whomaybere-elected uponexpirationoftheterm;tothis,anAdministratornotentitledvotingrights may be The Board ofDirectors mayconsistofseventothirteenmembers, appointedforaperiodnottoexceedthree financial and withverifyingthatthechecksare inplaceasneededtomonitortheaffairs oftheCompanyanditssubsidiaries. is charged withthe functionsandresponsibilities fortheCompany’sandGroup’s strategicandorganisational guidance, similar role withthemainsubsidiaries. Shareholders’ Meetingattheproposal oftheBoard ofAuditors.Thecompanycharged withauditingTerna SpAplaysa Auditing isentrustedtoaspecialisedcompanydulyentered intheCONSOBregister, appointedforthepurposeby •a •a •the •a Board ofDirectors Director Board ofAuditors Shareholders’ Meeting in charge ofpreparing thecompany’saccountingdocuments. ; ; www.terna.it ; requirements ofgoodstanding, professionalism andindependence ), intheInvestorRelationssection. management body, three tenthsoftheAdministratorswillbe nce ReportcontainedintheyearlyfinancialReport,and www.borsaitaliana.it corporate management ). . TheBoard ofDirectors nine members slate voting as indicated ” . 31 Terna’s profile 32 Sustainability Report 2008 examination andaimedatthebetterperformanceofitsrole. composition, andfunctionoftheBoard andofitsCommittees, havingpositivelyviewedallthemainprofiles takeninto Based ontheresults oftheanalysesmade,Board ofDirectors arrivedatapositiveoverallassessmentofthesize, assistance ofanoutsidespecialistconsultantinorder toensure thatthemaximumobjectivitywouldunderlieitsevaluations. of theBoard andofitsCommittees,provided forbytheSelf-RegulationCodepublishedBorsaItaliana,relying onthe For thethird yearrunning,theBoard ofDirectors carriedoutthe2008assessmentofsize,composition,andfunction Assessment ofthefunctionBoard ofDirectors of November2,2005conferred thefollowing: Except fortheCEO,othermembersofBoard ofDirectors shallbedeemednon-executive.Indeed,aBoard decision executive Administratorsare nottherecipients ofshare-based incentivisationplans. Committees intoaccount.Saidremuneration isnotlinkedtotheeconomicresults achieved bytheCompany. Thenon- Administrators iscommensuratewiththecommitmentrequired ofeachthem,takingmembershipinone ormore the attainmentofspecificobjectivesindicatedearlierbyBoard ofDirectors. Theremuneration ofthenon-executive Part oftheremuneration oftheexecutiveAdministratorsislinkedtoeconomicresults achievedbytheCompany and Executive powersandremuneration executive Administrators and, lastly, atthesessionofMarch 11,2009,certifiedthesatisfactionof based ontheinformationprovided bytheindividualinterested parties,theBoard ofDirectors, bothatthetimeofappointment independence ofitsnon-executivemembers–definedinlinewiththecriteriaindicatedbySelf-RegulationCodeand requirements ofindependenceasprovided forbyart15.4oftheCorporateBylaws.Basedoncriteriaassessing To astricterdegree thantheLawprovides, atleastonethird oftheAdministratorsinoffice shallpossessthespecific of thememberselectedtoBoard are Report(p.292-294). containedintheGovernance requirements havebeensatisfied,are madeavailabletotheshareholders priortothemeeting.Summariesofrésumés Under theslatevotingmechanism,résumésofBoard ofDirectors candidates,whichshallrecord thatthe one hourandthirtyminutesinduration. During the2008financialyear, theCommitteeheldtenmeetingsdulyattendedbyitsmembers,each averagingabout been allocatedsuitablefinancialresources. and offices, aswellthepowertorely onoutsideconsultantsasneeded.Towards theseends,theCommitteeshave In discharging theirresponsibilities, Committeeshavebeengiventhepowertoaccess necessarycorporateinformation controlestablishing theguidelinesofinternal systemandverifyingtheirsuitability. The an hourinduration. During the2008financialyear, theCommitteeheldthree meetingsdulyattendedbyitsmembers,eachaveragingabout subsidiaries. Board. TheCommitteealsodeterminestheremuneration criteriaforthetopmanagementofCompanyandits and oftheotherAdministratorsholdingparticularoffices, whilemonitoringapplicationofthedecisionsadoptedby The controlA RemunerationCommitteeandaninternal CommitteehavebeenestablishedwithintheBoard ofDirectors. Committees withintheBoard ofDirectors attended bytheBoard MemberswiththeBoard ofAuditorsonhand. During 2008,theBoard heldthirteenmeetingsof adurationaveragingonehourandthirtyminuteseach,whichwere duly Board ofDirectors Meetings totheCEO:allpowersforCompany’sadministration,exceptthoseotherwiseattributedbyLawor • totheChairman:somepowersofanon-operationalnature. • Corporate Bylaws, or at any r any at Corporate or Bylaws, Internal Control Committee Internal Remuneration Committee . (Theindependencerequirements are Report,p.298). specifiedintheyearlyGovernance ate thosereserved fortheBoard ofDirectors; has theprimarytaskofmakingproposals totheBoard fortheremuneration oftheCEO has functionstoprovide consultationandmakeproposals tothe Board ofDirectors in independence requirement forfournon- also overseesthe auditingactivityinconcert withtheCEO. controlopinion oftheinternal Committee,bytheBoard ofDirectors, attheproposal oftheCompany’s Chairman,who Terna inthepersonofAuditOffice Manager. Heorsheisappointed (and,where necessary, recalled), afterhearing the The actualoperationandongoing effectiveness Control oftheInternal SystemischeckedbyanEmployeeidentifiedwithin control employee Internal and corporateorganisation (art.8.C.1letterc)oftheSelf-RegulationCode). an acceptableriskprofile based ontheanalysesmadeovercourseof2008,found theGroup’s control internal system Terna’s Board ofDirectors meetingofMarch 11,2009,inlinewiththeopinionrendered control bytheinternal Committee healthy, proper management,and in suchawaythatthechiefrisksare identified,monitored, and handled inaccordance withcriteriaofcompatibilitya controlSupported bytheinternal Committee, theBoard ofDirectors, The coordinated functionoftheseelementsdeterminestheoveralleffectiveness oftheICS. It isbasedonthefollowingelements: and impartialbehaviourensured incarryingoutactivities underconcession. regulations, reliability ofcorporatereporting andfinancialinformation,thesafeguarding ofuninterruptedelectricityservic effectiveness andefficiency ofcompanyoperations,reliability offinancialtransactions,compliancewithlawsand The Group’s ICShelpsguaranteeachievementofthestrategic objectives,thesafeguarding ofcorporateassets,the from practice. thebestnationalandinternational Controlby theInternal Committee,thedefinitionof“Terna Group Control Internal System”(ICS),takingitsinspiration control,In thematterofinternal inDecember2006,theBoard ofDirectors updated, basedonthepriorexaminationmade Control System(ICS) Internal BOARD OFDIRECTORS(TERMBEGINNINGAPRIL28,2008) attributed toitbythelawonSelf-RegulationCodeofQuotedCompanies. ControlCompany’s Internal System(ICS)andofitsadministrativeaccountingsystem.Itdischarges theduties proper administrationintheperformanceofcorporateactivities,andsuitabilityorganisational structure ofthe provide oversightoncompliancewiththelawandmemorandumofassociation,principles Appointed bytheordinary Shareholders’ Meeting,theBoard ofAuditorsisanindependentcontrol body, calleduponto Board ofAuditors monitoring ofthesystem’seffectiveness. • communication andinformationprocesses; • control activity; • risk managementsystem; • control environment system); (thegovernance • Board Member Vittorio Rispoli Vittorio MichelePolo Salvatore Machì ClaudioMachetti LuigiRoth MatteodelFante PaoloDalPino Board Member Board Member CristianoCannarsa Board Member Board Member Board Member FlavioCattaneo Board Member Board Member Chief ExecutiveOfficer Chairman fieMmesEeuieNnEeuieIdpnetItra oto Remuneration Internal Control Non-ExecutiveIndependent Executive Members Office , inconsiderationofthesectorwhichTerna operates,andits size,organisational structure, evaluates thesuitability and actual function of the internal controland actualfunctionoftheinternal system. sets the guidelines of the internal control system sets theguidelinesofinternal omte Committee Committee suitable forachieving e, 33 Terna’s profile

36 Sustainability Report 2008 Compact In theCodeofEthics,Terna recognises andundertakestorespect thetenprinciplesof guidelines illustratingthereferences forthebehaviourtobemaintainedwithregard totheindividualcategoriesofstakehold loyalty andintegrityofcorporateassets).Forsection3(Relationshipwithstakeholders),itsapplicationislimitedtothei The CodeappliestoalltheTerna Group’s subsidiaries,entirely forsections1(Principles)and2(Conflictofinterest, compa sections, dealing,inorder, withthefollowing: set ofrulesconductfortheorganisation, relations. andatoolforgoverning TheCodeofEthicsissubdividedintofive principles andvaluestowhicheverycompanymustrefer initsworkorder togeneratetrustinitsstakeholders. Itisa to explainhowuniqueTerna isinitsethics,bothbydetailingcharacteristicsandhelpingspread thoseuniversal Approved bytheBoard ofDirectors meetingofDecember21,2006,thecurrent CodeofEthicsisadocumentthataims Code ofEthics Code ofEthicsandOrganisationalModelpursuanttoLegislativeDecree no.231/01 conformity” grade–the inearlyFebruary2009,a“general with theStandards AuditingissuedbytheIIA,earning, forthePracticeofInternal office QualityAssessmenttoevaluateactivitiesintermsoftheireffectiveness wassubjectedtoanExternal andcompliance In late2008,asprovided standards Audit(IIA),Terna’s forbytheinternational issuedbytheInstituteofInternal auditing Board ofAuditors.Heorshe to whomheorshereports. TheAuditManagerreports theresults Control totheCEO,Internal Committee,andthe The Auditmanageroperatesdistinctlyfrom andindependentlyofthehierarchical line,andisonthestaff oftheChairman, In particular, duringthe2008financialyear, National Transmission Grid,theexperiencesgained,andorientationsthathave emerged inthejurisprudence. subsequent additionofnewcrimesinDecree 231,takingintoaccounttheintegrationofactivitiestomanage the Over time,theModelhasundergone anumberofmodificationsasithasadjustedtotheprovisions oflawandthe Administrators, directors, oremployeesintheinterest orbenefitofsaidcompanies. bycompaniesforsometypesofcrimescommittedtheir administrative (butdefactocriminal)liabilityborne requirements ofLegislativeDecree no.231ofJune8,2001,whichintroduced intotheItalianjuridicalsystem aregime of In 2002,Terna’s Board ofDirectors decidedtoadopttheOrganisational andManagementModelincompliance withthe Organisational andManagementModel231 proper, transparent behaviour. all thoseworkingonthenameandinbehalfofTerna andthe Group, sothat,intheirownactivities,theymaymaintain prescriptions thatindicateitasanoptional,non-mandatoryelement–mayalsobeasoundtooltoraisetheawareness of This initiativeisinadditiontothatoftheCodeEthics “compliance regulations forthe laundering crimes main indications ontheconducttobemaintainedin • •the • the Code’s the • Terna’s • •the conflict ofinterest, andintegrityofcorporateassets; management, respect, andtransparency); fairness of corporatelife,andintofourprinciplesthatTerna recognises asparticularlysignificant foritsactivityandnature (good responsibility), havingabroad valuecuttingacross theentire organisation, thatunderlieallbehaviourandeverymoment be contactedforanyclarificationsthatmaynecessary. intends tomaintainuniformbehaviour; behaviour required fundamental ethicalprinciples commitments – thehighestvaluesthatUnitedNationsrecommends for companies. implementation regulations and crimesregarding the highest positiveassessmentthatcanbeearned to complywiththeCodeandbehaviourrequired withregard tosomestakeholders; , especiallyofemployees,inthree themescuttingacross theentire organisation: companyloyalty, operates through auditingactions prevention ofadministrativecrimesandoffences ofmarketabuse of Terna, broken downintogeneralethicalprinciples(legality, honesty and supplements andupdates and thepersonsofreference incharge ofupdatingandcollectingreports, to violation ofoccupationalhealthandsafetyregulations relations withstakeholders , intheconvictionthatadoptionofthisModel–beyond the , whosesphere ofapplicationextendstotheentire Group. to theModelwere approved, withregard to in accordance withtheIIA. , ineightgroups towards whichTerna United NationsGlobal ” were adopted. , andspecific money- nitial ny er. relationship oftrustwith stakeholders Terna wishestoadopt.Itisaccompaniedbyotherchoicesofconductthataiminstil,andconsolidateovertime,a and withenvironmentalist associationsshowthatrespect fortheenvironment andlocalcommunitiesisthebehaviourthat The commitmentsexpressed intheCodeofEthicsandapproach concretely implementedinrelations withlocalinstitutions a societyatlarge thatcancountonmore efficient, more affordable service. particularly inadenselyinhabitedcountrylikeItaly),andthustogenerateeconomicbenefitsforbothshareholders andfor natural andculturalrichness,toeasetheacceptancecreation ofinvestmentininfrastructure (whichisalwaysdifficult, communities isinfactacriterionofbehaviourthatcansetoff avirtuouscircle: itmakespossibletopreserve theterrit Reducing the the large iron pylonsforthepowerlinestraversingterritoryinlong,continuousstretches. national infrastructures, plusportionsoflinesabroad, itspresence isatangibleandvisibleone,commonlyidentifiedwith By itsverynature, Terna’s activityhasastrong impactontheterritory. Astheownerofonelargest andmoststrategi Terna’s themes Sustainability: programmes, risks,opportunities As itcurrently stands,theModelis refines knowledgeoftheirexpectations,isdescribedinthefollowingparagraph“Stakeholderinvolvement”. with regard toitsstakeholders.Thedirect relationship withthevarious categoriesofinterested parties,whichfeedsand employees. Thefollowingtableillustratesthesalientpointsof thecommitmentsthatTerna hasoutlinedintheCodeofEthics regulation authorities,andlocally. market-oriented setting,andshareholders –andin best practice. In itscontent,thisModelisconsistentwiththeprovisions oftheguidelinesestablishedbytradeassociationsandwith •a •a •a •a •a •a •a •a compliance withtheModel,flowsofinformation,andsanctioningsystem; of theModel,dutiesOversightBody–setupasaboard –calledupontooverseethefunctionofand which were introduced intoDecree no.231/01bytheeffect oftheentryintoforce ofLegislativeDecree no.231/07; prevention ofadministrativecrimesandoffences ofmarketabuse"; on safeguarding occupationalhealthandsafety. special partF general part special partD special partC special partB special partA special partE special partG impact ofpowerlines describing, amongotherthings,thecontentofLegislativeDecree no.231/01,theobjectivesandfunction on crimesofreceiving stolengoods,launderingandusingmoney, assets,orutilitiesofillicitprovenance, on crimescommittedinrelations withpublicadministration; on corporatecrimes; on offences inthematterofmarketabuse,supplementedbyspecific“complianceregulations forthe on crimesagainsttheindividualperson; on crimesforthepurposeofterrorism democraticorder; oroverturning on crimesofmanslaughterandgraveorveryinjurycommittedwithviolationtheregulations Investment insafetyandcompetence organised ineightparts , bothinthefieldof is therefore apriorityobjective.Respectfortheenvironment andthelocal relations withinstitutions economic relations : is thecharacteristictraitofrelationship with – withsuppliers,customersinaregulated, at acentrallevel,primarilywithindustry ory’s c 37 Terna’s profile 38 Sustainability Report 2008 bodies directly affected byTerna’s activity. and environment, finalusersoftheelectricity service,local National societyandthenationaleconomicsystem,territory SOCIETY ANDTHETERRITORY political parties. groups, technicallegislationbodies(nationalandinternational), associations, consumeropinionmakers, Media, university, andscientific associations,environmentalist MEDIA, OPINIONGROUPS,SCIENTIFICCOMMUNITY interests, ETSO,UCTE. autonomous provinces, associationsrepresenting economic national securityandlawenforcement, regions, provinces and representations,and government Civilprotection, authorityfor bodies,nationalinstitutions European Unionandinternational INSTITUTIONS ANDASSOCIATIONS Commission. CONSOB, stockexchangeauthorities,strikeguarantee authority, bodieswithguidancepowers,Antitrust, government Authority forElectricityandGas(AEEG),industryregulation REGULATION AUTHORITIESANDINSTITUTIONS other gridoperators,businesspartners. interruptible users),usersoftheelectricitysystem,gridowners, Private customers,gridusers(producers, distributors,traders, AND BUSINESSPARTNERS GRID USERS,CUSTOMERS SUPPLIERS representatives, tradeunionorganisations. Employees, administrators,collaborators,employees’ EMPLOYEES rating agencies. Shareholders, financialanalysts,banks,creditors, financers, AND FINANCERS SHAREHOLDERS, FINANCIALANALYSTS providing aresponse on the implementationof • supportforinitiativesofasocial,humanitarian,and cultural • preventive dialoguewiththeterritory’sinstitutionsinorder to • reduction oftheenvironmental impactofownactivities; • evaluationofthelong-termeffects ofownchoices; • Guaranteeing safe,uninterrupted,high-quality, andaffordable • search forareas ofcooperation inthemutualinterest with • excluding theinstrumentalisation andmanipulationof • Public,evenspread ofinformation; • guaranteeing maximumclarityinrelations. • Transparently, rigorously andconsistentlyrepresenting own • loyal,collaborativeapproach tofacilitatetheregulatory • respect fordeadlines; • Transparent, complete,andreliable information; • confidentialityofinformationregarding thegrid’susers. • arbitrarydiscriminationbetweenoperators; no • Efficient, high-qualityserviceaimedatconstantimprovement; • anti-mafia andanti-laundering protection towards suppliers. • qualificationofsuppliers,alsowithquality, environmental, and • transparent purchasing processes; • transparency andcompliancewithcontractualcommitments • Opportunity tocompete basedonqualityandprice; • • recognition ofcapacitiesandindividualmerit. • investmentinprofessional growth; • non-discriminationandequalopportunity; Protecting employees’ physicalintegrityandpersonaldignity; • commitmenttoavoidinsidertrading. • listeningtoshareholders, andproviding themwithtimely, • adopting riskcontrol andanticipationsystems; • inlinewithbestpractices; corporategovernance • creation ofshort-andlong-termvaluefortheshareholder; • managementoffinancialandsafetyobjectives, Balanced • environmental andsocialpolicy. value; and localinterests; make investmentsthatrespect theenvironment, landscape, service overtime; associations representing thestakeholders. information totheCompany’sbenefit; nature; interests and positionsavoidingattitudesofacollusive duties. social certifications; and agreements; symmetric information; and qualityofservice; Of theobjectives,particularmentionshouldbemadeoffollowing: The In 2008,Terna’s sustainabilityperformanceandapproach numerous alsoearned accolades(seefollowingparagraph). The year2008sawmajorprogress inallareas ofresponsibility. Specialmentionismadeofthefollowing Programmes andresults Sustainability performanceandobjectives definingapolicyand in-houseprocedures toidentifyinitiativesworthyofsupportthrough benefitsorsponsoring. • preparing aspecificbookkeepingforenvironmental expenses; • improving theoutsidecommunicationofsustainability(already underwayin2008),through theappropriate sectionof • continuing the dialoguewithstakeholdersbasedoncontentsof2008SustainabilityReport; • campaignreferring a tothecontentofCodeEthics,postponedfrom 2008,tobeorganised inthevariousin-house • • among thestakeholderengagementactivities,meetingsfocusingonTerna’s among sustainabilityapproach andonpresenting • • the economic commitmenttodonationswasincreased; the thesebenefitsbecameasignificantcomplementtonumerous • communicationactivitiesshowedstrong internal developmentwithnewinstruments(periodichouseorgan, in-house • importantcollaborationagreements the reached withLIPU(ItalianLeaguefortheProtection ofBirds) andtheWWF(see • centralimportanceofresponsibility the forelectricityservicewasconfirmedbythegoodresult achievedwithrespect to • Terna’s website; communication channels; “Initiatives intheCommunity”onp.140. organisation oftheeventhelpedstartupcharityprojects indicatedbyemployees).Inthisregard, seetheparagraph Ai.Bi. – corporate projects, suchas contest, organisation ofChristmasmeetings)introduced, andexistingonesimproved; improvements inaseriesofprotected areas identifiedbytheagreements; biodiversity andconservationaspectsintotheplanningofnewlines.Inbothcases,there willalsobeconcrete assessing themostappropriate mitigationmeasures; theagreement withtheWWFwillleadtogreater integrationof LIPU callsformakinganin-depthscientificanalysisoftheinteractionbetweenbirds andhigh-voltagepowerlines, andp.99)laidthefoundationforagreater sustainabilityofTerna’s core activities.Thecollaborationwith box onp.91 regulatory framework”); euro, were alsoachievedbasedontheincentivisationschemesinforce (seetheparagraph“Revenuestructure and the targets setbytheAuthorityforElectricityandGas(AEEG)2008; greater revenues, amountingtoabout5million responsibility issues.Themeetingsprovided interesting ideasforimprovement; the SustainabilityReportwere organised specialisinginenvironmental forthefirsttime,aimedatjournalists andsocial objectives for2009 Amici deiBambini are additionalstepsonthepathsalready undertaken;thetabletosideprovides asummary. Premio Terna01Premio – inproportion toparticipation),andtheannualconvention (thesavingsmadeinthe (awarding offirstprize),thein-houseCreativInTerna contest(donationto results : 39 Terna’s profile 40 Sustainability Report 2008 (1) Theresult achievedequalsaperformanceatleastequaltothetarget forthecorresponding Bala indicatorsoftheinternal Terna’s socialresponsibility: objectivesandresults terms ofrespecting anddefending humanrights. systems andpolicy),inthesocial field(systemstomanagerelations andcollaborationactivitieswithstakeholders), andin the commitmentsmadeand results achievedbythecompaniesinenvironmental field (environmental management together thefinestEuropean companies thatstandoutforsustainableeconomicdevelopment. Admissioncriteriaassess FTSE4Good Europe), the prestigious stockmarketindexoftheFinancialTimes StockExchangeofLondonthatgroups On March 13,andagainonSeptember12,2008,Terna wasreconfirmed intheFTSE4Good(FTSE4GoodGlobaland FTSE4Good Recognitions received inthereporting period betv/eutaes20 eut 20 betvs 08Rsls 2009Objectives 2008Results 2008Objectives 2007Results Objective/result areas aspects and general Governance responsibility Social responsibility Environmental service electricity for the Responsibility responsibility Economic Investmentingrid • Studycarriedout. • • Recognition performed Recognition • start-upof Partial • Corporateconvention • Spreading theCodeof • Containing • planprogress Safety • Compliancewithtarget, • OHSAS18001 • Improved “People • Initiativescarriedoutin • Identification ofdrivers • Certificationobtained • Corporateprofitability • for containingSF development (Vigeo). involvement process; stakeholder on sustainabilityheld; 2008; Ethics, postponedto transmission costs according toschedule. Energy indicator; except fornon-supplied certification obtained. Satisfaction” index; compensation; training and communications, in-house (December 2007); (1) ; 6 leaks; (1) . (1) ; Agreement forjoint • Progress ofSF • Containing • Investmentingrid • Corporateprofitability; • • Review ofcollection Review • Meetingswith • Campaigntospread • • Safety planprogress Safety • Compliancewithtarget • Carryingoutnew • association. one environmentalist projects withatleast the identifieddrivers; containment project in transmission costs. development; CSR data. Terna Participações involvement process; stakeholder continuance of Sustainability Report; stakeholders on the CodeofEthics; according toschedule. continuity indicators; compensation. training, development/ communications, initiatives inin-house 6 Agreements withLIPU • Investmentingrid • Containing • Progress ofproject to • Corporateprofitability • Increase ofthenumber • 2 meetingswith • Spreading theCode • • Safety planprogress Safety • Compliancewith • Production ofhouse • (p. 91)andWWF99). (p. 106-107); development transmission costs contain SF (p. 10-11). of Group G3indicators Terna (p.48-49); and sustainabilityin Sustainability Report stakeholders on to 2009; of Ethics,postponed (p. 59). targets (p.60-61); System (p.136-137). of GlobalPerformance (p. 139-140);preparation review oftrainingplan communication (p.47); 123); surveyonin-house CreativInTerna (p.122- contest and internal organ “Terna News”, 6 leaks (1) ; (1) . (1) ; Progress ofproject to • Progress ofactionplans • Newaccountingof • Containing • Investmentingrid • Corporateprofitability; • Anticipatingscheduling • Improving sustainability • Meetingson • Campaigntospread • • Positive result Positive of • planprogress Safety • Compliancewithtarget • Adoptionofcorporate • Operative start • Initiativescarried • nced Scorecard system. section onTerna website; contain CO LIPU andWWF. of agreements with expenses; environmental (SF transmission costs. development; Sustainability Report. for thepublicationof stakeholders; with othercategoriesof Sustainability Report the CodeofEthics; incentives. and Gas(AEEG) Authority forElectricity according toschedule; continuity indicators; and procedures. giving policy Performance System; with Global assessments of performance of safety; out toraiseawareness 6 and vehiclefleet); 2 emissions and stimulationofman’ssustainable development. given byIBRAE–InstitutoAmbiental BiosferaeInstitutoBarsileiro deEstudosSpecializados –foritscontributiontowards In August2008,Terna Participaçõesreceived theNational OutstandingandSocialResponsibilityDevelopmentAward, National OutstandingandSocialResponsibilityDevelopment Award efforts implementedbyTerna inthe2007-2008period(seeboxonp.123). The Aretê juryawarded Terna firstplaceforthe“in-housecommunications” category. Theprizerefers tothecommunication Aretê Award Europe’s economic,industrial,andenvironmental development. development. TheEBAissupportedbyorganisations strongly involvedinpromoting corporateobjectivesatalllevels,for member countries,companiesthatstandoutinavarietyof settings,includinginnovationandcommitmenttosustainable The European BusinessAwards identifies andrewards thecompanieswithgreatest successintheEuropean Union’s 27 “The European BusinessAwards” intheCorporateSustainabilitycategory. On April7,2009,Terna wasawarded the“Ruband’honneur”forhavingbeenincluded amongthetenfinalistsin2009 The European BusinessAwards pointsofreferencethe instituteisoneofinternational onsustainabilityreporting standards. out bytheAccountAbilityinstitute.AccountAbility’sanalysesare foundeduponmethodsdevelopedonitsown,inwhich carried 40index.AccountabilityRatingItaliaisthenationalextensionofInternational the S&P/MIB In the2008AccountabilityRating,Terna aneighth-placerankingamongthe40largest earned Italian firmsbelongingto Accountability Rating2008 capitalisationandfrom theEurostoxx60. Financial Research amongthecompanieswithlargest S&P/MIB In 2008,Terna wasreconfirmed intheAxiaEthicalIndexand theAxiaCSRIndex,created bytheMerchant BankAxia Axia EthicalIndexandCSR Monetary Union(EMU). Index Euro whichgroups togetherthecompanieswithgreatest capitalisationandbelongingtotheEconomic On April17,2008,E.CapitalPartners,aratingandadvisorycompanyforethicalinvestments,confirmedTerna intheEthical Ethical IndexEuro enSostenibilidad (Spain). Analistas Internationales Research (TheNetherlands),Centre Info(Switzerland),SIRIS(Australia),JantziResearch (Canada),Scoris(Germany)and Inc foundedin1988,andtheSiRiLtdnetworkofEuropean andglobalsustainabilityanalysts,includingDutchSustainability The GlobalSustainabilityIndex(GSI)istheproduct ofalong-standing collaborationbetweenKLDResearch &Analytics, them toselectsociallyresponsible corporations. sustainability performance,provides importantindications forchoosingEthicalandSRIfunds,whoseinvestorsrequire one ofthemostwidespread andaccredited standards intheUnitedStates,through benchmarksoncompanies’ In 2008,Terna wasconfirmedinthefamilyofKLDGlobalSustainabilityIndexes.TheIndex(GSI), Global SustainabilityIndex Business CouncilforSustainableDevelopment). field reference wasmadetotheguidelinesofUNEP(UnitedNationEnvironmental Program) andWBCSD(World organisations whileintheenvironmentalby theILOandotherinternational (including,forexample,AmnestyInternational), two inItaly. InStorebrand’s analysis,thechiefreferences were theUniversalDeclarationofHumanRightsandresolutions Storebrand investmentfundrankedTerna inthetop14European utilitiesoutofthe53assessed–andamong only In February2009,Terna received theStorebrand “BestInClassStatus2008”.Thetwo-yearsearch madebyNorway’s Storebrand BestInClassStatus the twenty-twoanalysedareas ofsustainability. also received specialmentionasSectorMover2008,whichrewards thecompaniesthathavemademostprogress in 2008SAMBronzethe top14electricityutilitiesoutof107examinedworldwide,thusgarnering ClassStatus.Terna conducted yearlyforadmissiontotheDowJonesSustainabilityIndexes(DJSI),waspublished.Terna wasrankedamong In January2009,the2009SAMSustainabilityYearbook, prepared bytheSAMRatingagencybasedonanalyses Dow JonesSustainabilityIndexes 41 Terna’s profile 42 Sustainability Report 2008 Investigations bytheAuthorityforElectricityandGas and thefirstmonthsof2009shouldbementioned: cases oflocalopposition,whichreceive mediaattention,maypersistalongtheway. Ofthese,thefollowingcasesin2008 The search forshared solutionsrequires arduous mediationandalotoftime.Althoughoutcomesare normallypositive, that theyare compatiblewiththerequirements ofsafe,efficient andaffordable electricityservice. attitude istoexamineandfindsolutions–eventhosetechnicallymore complicatedthanthoseoriginallydefined Projects tobuildnewinfrastructures oftenresult inadverse,NIMBY(NotInMyBackyard) reactions. Inthesecases,Terna’s Opposition tothebuildingofnewlines Disputes andlitigations framework law hadbeenlimitedtoprinciples ofageneralnature. electricity plantmustcomply, hadafavourableimpactonthe disputes inprogress, sinceuntilnowtherangeof three parameters(limitsofexposure, attentionvalues,andqualityobjectives)provided forbythelaw, andwithwhich completing theregulations offrameworklawno.36February22,2001,whichconcretely establishedthevaluesof In thismatter, itshouldbementionedthattheissuanceofDecree oftheItalianPrimeMinisterJuly8,2003, caused byelectromagnetic fields. with theregulations inforce. Onlyinahighlylimitednumberofcases were claimsmadetoberefunded damagetohealth moved andtheiroperatingprocedures modifiedbasedontheirpresumed harmfulness,evenifinstalledincompliance The Parent Companyisthedefendantinanumberofcivilandadministrativesuitsdemandingthatpower linesbe and magneticfields. The environmental disputeregards theinstallationandoperationofelectricalplant,inparticulareffects ofelectric Environmental dispute of powerwithdrawnbytheNationalTransmission Gridforthefirstthree monthsof2007,aimedat: With itsdecisionno.177/07,theAEEGinitiatedafact-findinginvestigationofirregularities foundinquantifyingthelot Fact-finding investigationofunsuppliedpower 25 and26,2007. With itsdecisionno.155/2007,theAEEGinitiatedafact-findinginvestigationofoutagestakingplaceinSicilyonJune businesses denouncedtheharmtocorporateactivitycausedbyinterruptioninelectricpower. removed from serviceinorder topermitextinguishingoperations;failures andbreakdowns. Protests bycitizensand due toaseriesofconcomitantfactors:veryhighconsumption;widespread fires whichresulted insomelinesbeing Electricity distributorsthusimplementedscheduledrotating outages forwidespread users;themeasure becamenecessary more criticalsituations(seebox“Thecrisisofthe electricitysysteminSicily,” p.82oftheSustainabilityReport2007). On June26,2007,Terna activatedanti-black-outmeasures inSicilytoprevent lossofcontrol ofthesystemandthwart Outages inSicilyJune2007 Two investigationsopenedbyAEEGin2007,ofpotentialinterest toTerna, haveyettoreach theirconclusion. “Montercorvino-Avellino” case.ThemunicipalityofParolise showedits willnottosigntheProtocol ofUnderstanding • “Cagliari Sud-Rumianca”case.OppositionbythemunicipalityofCapoterraagainstpath150kVline;currently • “Trasversale Veneto” case.Theauthorisationpathhasbeeninitiated.start-upcausedanewfrictionwithlocal • “Dolo-Camin”case.Theprocedure isunderwayforauthorisationbytheMinistryofEconomicDevelopmentinagreement • “SantaBarbara-Casellina”case.Disputeraisedbysomeproperty ownerswhosehomesare locatednearroute ofthe • identifyingoperative andprocedural errors thatTerna andthedistributorsmustcorrect toguarantee theminimisationof • thepossibilitythatthesemistakesmayhavehappenedalsoinprevious investigating years; • identifyinganyerrors committedintheperformanceofmeasurement service,andtheresponsibility ofthesubjectsinvolve • also brought byothermunicipalities. and therelated conventionwithTerna; oppositiontothe intervention,currently inthephaseofconcertedplanning,is being examinedbytheservicesconference; underground (about33kmat380kV); (Provinces ofTreviso andVenice) are infavouroftheproject. Thecommittees request thattheentire powerlinebeplaced communities, andinparticularwithanenvironmentalist associationofthemunicipalityPaese.Thelocalbodiesinvolved territories beplacedunderground; Two municipalitiesintheProvince ofPaduaopposetheproject’s plan,requesting thatthepowerlinefortheirrespective with theMinistryofEnvironment. Currently, theproceedings are intheenvironmental impactassessmentcommission. power linebeingbuiltsince2008.Routevariantrequested; errors indeterminingthelotsofelectricalpowerinputintoandwithdrawnfrom theelectricitysystem. –provided – d; d; s activities abroad. Asforgriddevelopment, twoaspectsare crucial: Growing value forshareholders islinked,inthemedium/long term,withgriddevelopmentinvestmentsandthegrowth of Territory the qualityandsafetyofelectricityserviceremains. will alsoseetheissueofcore competencesintensifyinaphaseofgenerationaltransition.Butthecentralimportance aspects ofrelationship withtheterritory, environmental impact,andsocialresponsibility inforeign countries.Comingyears In amedium-tolong-termscenario,sustainabilityissues intersect withTerna’s development strategies,particularlyfor Medium- andlong-termchallenges in theTables of indicators. For informationonotherdisputesinvolvingTerna, seep. 183ofthe2008AnnualFinancialReport,anddataondisputes outcomes are onlyremote possibilities. Taking intoaccountthereports anexaminationofdisputesleadstotheopinionthatnegative byoutsideattorneys, availability. However, anunfavourableoutcomewouldnotcompromise theoperationoflines. payment ofdamages,consistincurringcharges connectedwiththemodificationsoflinesandtheirtemporarynon- judgements, itisnotcurrently possibletoruleoutunfavourableresults whoseconsequencesmay, inadditiontothe unforeseeable andthusnotincludedindeterminingthe “Fundfordisputesandsundryrisks”.Foralimitednumberof and operationofsometransmissionlines,whoseunfavourableresult couldgenerateeffects thatatpresent are Also pendingare somedisputesregarding urbanandplanningenvironmental matters,connectedwith thebuilding Other disputes See theTables ofindicatorsforquantitativeinformationonenvironmental disputes. pronouncements unfavourabletotheCompanymade.Thesepronouncements were appealedandthedecisionsare stillpending. From thestandpointofdecisionsthathavebeenhandeddown,itispointedoutonlyinsporadiccaseswere accelerationoftheauthorisationprocesses. InItaly, theauthorisation pathforbuildingnewpowerlinesmaytakeupto • also duetothetrusteffect generated bythecompany’sconsistentbehaviourovertime. Itwillthusbeimportantto institutions, intheconviction that identifyingshared solutionsthatrespect theterritorywillease theauthorisationpath, four timeslongerthanactually performingthework.Terna haschosentheroad ofdialogue andinterfacewithlocal Electric andmagneticfields:thelimitsoflaw Rio Principles).Respectfortheregulations oflawinitsactivities impliesTerna’s adoptionofthisprinciple. microTesla), bearwitnesstotheadoptionintoItalianlawofprecautionary approach indicatedbyart.15ofthe The valuesofthe3parameters,andinparticularattentionvalue(10microTesla) andthequalityobjective(3 objectives.Inthedesignofnewpowerlinesincorrespondence quality withchildren’s playareas, home • attention values. Asaprecautionary measure forprotection from possiblelong-termeffects possiblyconnected • exposure limits.Inthecaseofexposure toelectricandmagneticfieldsatafrequency of50Hzgeneratedby • the ItalianPrimeMinisterofJuly8,2003)are asfollows: The mainvaluesofreference foremissionsofelectricandmagneticfieldcurrently provided forbylaw(Decree of operating conditions,isestablished. magnetic inductionvalue,tobeunderstoodasthemeanofvaluesovercourse24hoursundernormal generated bythepowerlinesoperatingatafrequency of50 Hz,thequalityobjectiveof3microTesla forthe the territory, forthepurposesofprogressive minimisationofexposure totheelectricandmagneticfields in thedesignofnewsettlementsandareas asabovenear powerlinesandinstallationsalready present in environments, schoolenvironments andlocationsintendedforapresence ofnolessthanfourhoursaday, and normal operatingconditions,isassumedformagneticinduction; the attentionvalueof10microTesla, tobeunderstoodasthemeanofvaluesovercourse24hoursunder environments, inschoolenvironments, andinlocationsintendedforapresence ofnolessthanfourhoursaday, with exposure tothemagneticfieldsgeneratedatgridfrequency (50Hz),inchildren’s playareas, inhome understood aseffective values,mustnotbeexceeded; power lines,theexposure limitof100microTesla bymagneticinductionand5kV/mfortheelectricfield, 43 Terna’s profile 44 Sustainability Report 2008 it, alsointermsoftheconnectionnew, higher-performance plants,andoutputfrom renewable sources. grid’s developmentisthegreatest contributionthatTerna canmake,becausethesystem’s greater efficiency dependson contain and,where possible,reduce itsowndirect andindirect emissions(seeindicator EN18onp.106).However, the profit andlossaccount(seeindicatorEC2onp.75).However, ithasalready activatedthepreparation ofprogrammes to or emissiontradingschemes;noparticularrisksmaybeglimpsedastotheconsequencesofclimatechangeonTerna’s Terna hasnoactivityinthefieldofgeneratingelectricityandistherefore notsubjectedtoemissionsreduction obligations Climate changeandgreenhouse gasemissionsdemandour attentionasoneofthemostsignificantproblems globally. constant attentiontotheevolvingstanceofscientificcommunity, inorder toassessanyrisksconnectedwithitsactiviti scene.Givenpublicopinion’ssensitivitytotheissue,Ternato beamongthestrictestoninternational willalsodevote For theformer, Terna’s commitmentisabovealloneofscrupulousrespect fortheregulations ofItalianlaw, whichappear climate change. The emerging issuesforwhichTerna expectstointensifyitsmonitoringandattentionincludeelectromagnetic fieldsand Environment andclimate were atgreater riskfrom specificstandpoints,suchasenvironmental standards andtheprevention ofcorruption. future presence inothercountrieswillrequire greater commitment toGroup coordination, especiallyifthesecountries However, onApril24,2009,Terna announced ithadreached anagreement tosellitsstakeinTerna Participações.Terna’s by theincrease ofG3indicatorswithGroup boundarypresented inthisReport. policies, whichincludesmeasuringperformance.Coordination withBrazil’sactivitiesledtoimprovement in2008, asshown As togrowing activitiesabroad, thiswillalsoinvolvecommitmenttocoordinating socialandenvironmental responsibility Growth abroad development ofadedicatedsite wasalsoinitiated,usingabuildinglocatedinpower station tothenorthofRome. most promising resources, withexpertpersonneltakingpartasinstructors(see“Training” onp.139).ForCampus,the entitled “CampusTerna”, centred uponstructuringtrainingpathsdedicatedabovealltotherapidgrowth oftheyoungest, to passontheskillsaccumulatedwithexperience job, Terna isembarkingon a knowledgemanagementproject intensify incomingyears,particularamongitsownspecialised technicians.Inthisdelicatephase,inwhichitisnecessar This lastpointtakesonparticularimportancegiventhegenerational transitionthatTerna hasbeguntoface,andwill guaranteeing thatitsactivities’specifictechnicalskillswill be renewed andupdatedovertime. Constant attentionwillbegiventohumanresources, firstinterms ofsafety, butalsowithtraininginitiativesaimedat Human resources need, unsuppliedpower).Seetheparagraph“Revenuestructure andregulatory framework”. schemes hasopenedgreater risksandopportunitiescorrelated withthedefinedtargets (forecast ofwindproduction and to minimisetheriskofpowerfailure. Theintroduction bytheAuthorityforElectricityandGas(AEEG)ofreward/penalty out aninvestmentplanfortheelectricitysystem’ssafety(seechapteronResponsibilityservice) Sustainability oftransmissionactivitiesisinthefirstplacelinkedtoqualityservice.Terna iscommittedtocar Electricity service campaigns –Terna’s commitmenttoelectricityserviceandasustainabledevelopmentofinfrastructure. alsothrough institutiona a favourableclimatearound Terna’s imageandactivities.Forthispurposeitisnecessarytostress – conveying tocitizensandinstitutionstherole ofpublicinterest thatTerna performsintheelectricitysystem,andhelpingb With respect toboththeseobjectives,animportantrole isplayedbyeffective informationandcommunication,transparently acceptancebylocalcommunities.Beyondtherelationship withinstitutions,increasing the levelofacceptance • (see also“Stakeholderinvolvement”,p.45). illustrated above,Terna hasinitiatedreflection onthemosteffective procedures forsubmittingitsdevelopmentprojects electricity infrastructure bytheaffected communities isahighlyimportantobjective,asshownbythecasesofdisputes with LIPU”and“Agreement withWWF”,p.91and99); relationship withenvironmentalist organisations, forexampleinthearea ofsafeguarding biodiversity(see“Agreement (see “Concertedplanningwiththeterritory”,p.111)–newstimulioriginatingfrom localstakeholdersandfrom the process –thetechnicalinstrumentthrough whichdialogueontheplacementofnewpower lines concretely takesplace develop theapproach ofconcertedplanninginallRegions,andtointegrateintothestrategicenvironmental assessment rying uild es. y l downloadable informationonthecompany’swebsite( In addition,itwasdeemedappropriate toencouragefurtheropendialoguewithinvestorsbyproviding adequate 8313 8136and+39068359;email: For thispurposeanumberofcontactpointshavebeencreated aimeddirectly atnon-institutionalinvestors(tel:+3906 and profitable dialoguewithitsmarketoperatorsandretail shareholders. and privateinvestors.Through itsInvestor RelationsandCompanyAffairs Departments,Terna hassetupanon-going Terna placesagreat dealofemphasisontheopennessandpromptness oftheinformationitsuppliestoitsinstitutional Shareholders Anyone interested maywritetothefollowingemailaddress: Below isanaccountoftheinterviewsanddiscussionsheldwithstakeholdersduring2008beginning2009. to varyingschedules. and opinions.Themaintoolsare showninthefollowingtable.Themonitoringandcheckingtoolsare employedaccording With regard tosuchcategoriesofstakeholders,Terna usescertainspecifictoolstomonitorandchecktheirexpectations their influenceisontheCompanyandviceversa. identify themostsignificantcategoriesofstakeholdersbasedoncontinuitydealingswiththemandhowimportant During thepreparation ofitsCodeEthics,Terna activelyinvolveditsupperechelonsandtopmanagementinorder to Stakeholder involvement by theappropriate departments. The requests share forinformation mainlyconcerned performance,dividendsandotherinformationwhichwas provided During 2008there were 27 requests forinformationfrom shareholders viaemail(17in2007and62 in2006). 231/2001). CodeofEthics,organisationalabout corporategovernance, andmanagementmodelpursuanttoLeglislativeDecree no. members ofthecompanybodies,CompanyBylawsandshareholders’ meetingregulations, informationanddocuments financial community)andalsodataup-to-datedocumentation ofgeneralinterest toshareholders (press releases, economic andfinancialnature (financialstatements,half-year +39 0683138145;email: tkhle Monitoringandcheckingtools Stakeholder mlye Annual“PeopleSatisfaction”survey, surveyoninternal Targeted meetings,road-shows, websiteandemails. Employees Shareholders, financialanalystsandfinanciers omnt n ertr Randomsamplesurveys,consultation process inplanning Purchasing portal,direct meetings. Periodicalmeetings. Direct participationintechnicalcommittees. Presentation oftheSustainabilityReport,direct meetings. Community andTerritory ConsultationCommitteeontheGridCode. Media, OpinionGroups andtheScientificCommunity Institutions andassociations Regulatory Authority Grid users,customersandbusinesspartners Suppliers [email protected] [email protected] ). www.terna.it [email protected] communication tools. the electricitygrid. and quarterlycompanyreports, presentations giventothe ) andatinstitutionalinvestors(tel:+390683138106 ). Onthewebsiteitispossibletofindinformationofan . 45 Terna’s profile 46 Sustainability Report 2008 Participation attheShareholders’ Meeting in2009waslinewiththatoftheprevious years. company’s economicresults andstrategicobjectives. the InvestorRelationssectiononTerna’s website,whichare allaimedatguaranteeing effective communicationofthe Furthermore, since2009theSustainability Reporthasbeenavailableonlineandjoinswiththeotherinteractivetoolsin Terna’s share capital,isstillon-goingandaimstodefineaspecificcommunicationprogramme. The process ofrecreating SociallyResponsibleInvestors(SRI),present andpotentiallyinterested inholding stakesin and publishreasearch details. who takepartintheeventsliveviatwochannelsisonaverageover50,includingabout22analystsfollowshares the Companyorganises conference callsandreal-time webstreaming onthecompany’swebsite.Thenumberofpeople Whenever thecompany’s(quarterly, half-yearandannual)results are publishedorthere are significantM&Atransactions, in somesectorialconferences (UtilitiesConference). There were alsoanumberofone-to-oneandgroup meetingsheldintheRomeoffices andcompanypersonneltookpart New York, NewJersey, Philadelphia,Boston. London, Edinburgh, Dublin, Amsterdam, Milan,Geneva,Zurich,Frankfurt,Paris,Madrid,Lisbon,Copenhagen,Helsinki, over 40analystsandsalesexperts.Themeetingswere financialcentres, heldin19ofthemaininternational including intense communicationactivitieswithover160institutionalinvestors,shareholders orpotentialshareholders andwith has continuedtogrow inimportance.Duringthefirstquarterof2009alone,topmanagementwasactuallyinvolved The roadshow programme thattheCompanyorganises periodicallytoillustratethecompany’sstrategiesonaglobalscale the dividendpolicies. search forgrowth opportunities.Particularattentionisalwayspaidtotheplansforoptimisingcapitalstructure andon programmes foroperationalefficiency, networkqualityandsafetytargets andthephilosophycriteriathatguide the During thismeeting,Terna’s managementprovided theinvestorswithinformationaboutfuture investmentplans, the present theCompany’sstrategies. On February3,2009,thecustomaryannualmeetingwithfinancialcommunityandpress washeldinMilanto Financial communications an equivalentpost elsewhere. to emerge from thesurvey. Working inTerna isapointthatbringssatisfactionandstayingintheCompany ispreferable to Sense ofbelonging “Orientation towards thecompetitive system”wastheaspectwithhighestscore. Orientation towardsthecompetitive system displays oneofthestrongest growths. compared totheprevious edition. Forthefirsttime“Management”categorycomeswithin thestrong pointsand The results confirmastrengthening intheareas thatalready hadpositive results lastyearandwhosescore hasincreased Strong points(percentage ofsatisfactionamong therespondents >60%) The redemption ratereached 70%,thevaluealready achievedlastyear. improve theclimatewithinCompany. part init,emailmessages,collaborationfrom thedepartmentheadsinconfirmingimportanceofsurveyorder to banners onthecompany’sIntranet,interviewswithPersonnel Director ontheimportanceofproject andoftaking In order toencourageparticipation,thesurveylaunchwassupportedbyanampleprogramme communications: ofinternal dropped by10%. effect onthenumberstakingpartinsurvey:actualpercentage ofworkerswhofailedtorespond tothesurvey involving 185workerschosenatrandom.Thisdialogueprocedure wasextremely wellreceived andalsohadapositive Workers received thepaperquestionnaire andforthefirsttimeaseriesoffocusgroups were heldaround theterritory, at thestartof2009.Asusual,questionnaire wasfilled inanonymouslysoastoencouragefree expression ofideas. The “PeopleSatisfaction”survey, whichisaimedatallemployeesandwasrunforthe firsttimein2007,wasagainrepeated “People Satisfaction”survey Employees Representation of Share Capital 48.9% Representation 48.9% ofShare Capital - Other Shareholders 10.9% 10.9% - OtherShareholders 3 - CdP, 38.0% Enel,GeneraliandBancad’Italia : thesenseofbelongingand company loyaltycontinuetobeoneofthemostpositivecharacteristics : trustinTerna’s abilitytomove withinitsreference marketmeansthat pi 2 09Arl2,20 May24,2007 April28,2008 April 22,2009 11.9% 9.2% 11.9% 50.2% 49.7% 50.2% 8.2% 40.5% 8.2% were alsosomeperiodical meetingsaboutstaffing levelpolicies,safetyandprotection intheworkenvironment andtraining. Lastly, certainmeetingswere heldinadvanceregarding organisational changestosomeSeniorManagementStaffs. There regarding conditionsfortravelexpenses andclaims,whichare by21different governed territorialagreements. Another centralthemeofindustrial relations theattempt by theCompanytorecreate concerned asinglenationalagreement showed asignificantincrease (about 70%)overthebonusesawarded intheprevious year. Trade thelevelofprofits-related Unionsconcerning bonusesforallemployees,basedon“CompanyProfitability”, which With specificreference to2008,aparticularlyimportant agreement wassignedtogetherwiththeNationalOfficers ofthe agreements. During thethree-year periodfrom 2006to2008,negotiations withtherelevant Trade Unionsledtothesigningof22 and information,heldinadvanceand/orperiodically(seethe paragraphonIndustrialRelationsp.121). a systemofrelations andarrangementswhichcentre around negotiations,discussions,consultation meetingsconcerning The Protocol onIndustrialRelationsisthefoundationagreement forrelations withtherelevant Trade Unions anditoutlines at alocallevel,whilerespecting thedistinctlydifferent roles andresponsibilities ofeachpart. life oftheCompany, includingtheanalysisofstrategicpolicyguidelinesanddiscussions aboutanyissuesemerging Industrial relations withintheCompanyare basedontheinvolvementofTrade Unionsinthemainthemesregarding the Industrial relations communication tools.Actionwillbetakenduring2009onthebasisofresults andsuggestionsgathered inthesurvey. The surveyallowedinformationtobegathered regarding thestrengths andareas requiring improvement inalltheinternal of usefulinformationandnews.There isroom forimprovement intheconnectionqualityandorganisation oftheinformation. achieved thebestresult wastheIntranet.Themajorreasons forthissuccessincludeitsuser-friendliness andtheamount around theterritory. communicationinitiativesachievedaresult Allinternal thatwaswellabovesatisfactory. Thetoolwhich all employeeswhohaveanITworkstation(60%ofrespondents) andabout10%ofworkers,viaaseriesfocusgroups tools thatwere communication.Itwasconductedanonymouslyandinvolved implemented,asurvey washeldoninternal 122-123). Atthebeginningof2009inorder tounderstand howmuchpeopleknowaboutandappreciate theinitiativesand During 2008,Terna launchedanumberofinitiativesregarding communication(seetherelevant internal paragraphonp. communication Survey aboutthetoolsandactivitiesofinternal of theprevious surveys. communication, training,relations betweenmanagersand assistantsandperformancerecognition, launchedasaresult level ofsatisfactionandprovide encouragementtowards continuingtodeveloptheCompany’sinitiativesinfieldof recognition ofmerit.Ingeneraltheresults ofthe2009edition“PeopleSatisfaction”surveyindicateasound,overall members ofstaff. There isalsoacontinueddemandforimprovements totheperformanceevaluationsystemand belonging, attachmentandprideasregards thelevelofprofessionalism displayedbytheCompanyanditsindividual In 2009,there isacontinuedoverallviewofcompanywhere peopleare happytoworkandhaveastrong sense of senior managers,theassessmentofcommunicationsthatgothrough “official channels”remains stable. level ofsatisfactionregarding communicationaboutassessmentcriteriaandthebonussystem.Despiteadrop among Communication level ofappreciation fortheirjobsandtheopportunitiestheyhavetodevelopskills. opportunities are stillseenasveryunsatisfactory. Allcategoriesare highlysatisfiedandshowimprovements intheirhigh Jobs People Care” programme. results achievedbytheCompanyinresponse totheoutcomeofpreceding surveyswithinitiativessuchasthe“Terna The criticalpointsraisedintheprevious editionstillremain, butincertainspecificfieldsthere issomerecognition ofth Points requiring improvement (percentage ofsatisfaction amongtherespondents <40%) requiring attentionisteam-working,thoughthisnottheperception ofmanualworkers. and procedural nature andtheyrecognise thattheCompanyisparticularlyeffective inimplementingdecisions.Onepoint to haveapositiveperception oftheattentionthatTerna placesinthedevelopmentofinnovativesolutionsatechnological are “strong” values,thatare wellappreciated andacknowledgedwithinthelifeofCompany. Respondentsalsocontinue Values management onaccountoftheircapacitytocommunicatethecompany’svaluesandmission. towards themanagementstyleoftheirbosses.There wasalsoanincrease insatisfactiontowards thecompany’ssenior Management : theoverallassessmentofworkingeneralhasimproved inallcategories,althoughthebonussystemandcareer : qualityofservice,competenceandprofessionalism, ethicalbehaviourandresponsibility towards theenvironment : compared tothe2008survey, allcategorieshavesignalledageneralimprovement intheirlevelofsatisfaction : communicationremains themostcriticalaspectin2009survey, particularlyonaccountofthelow e 47 Terna’s profile 48 Sustainability Report 2008 clashes ofinterest andpracticesthatrestrict competition. to theprovisions ofthesigned“IntegrityPact”which,asmentioned, commitsthemjointlywithTerna toavoidpossible Another eventwhichinvolvedalarge sectionofauthorisedsuppliercompanieswastheoneaimedatdrawingtheirattention Decree no.81/2008ontheiractivities. training programme thatshouldbeorganised fortheirownspecialistpersonnelandtohighlighttheeffects ofLegislative For example,in2008,allthecompaniesinvolvedtree-cutting were calledtoameetingwhere theywere shownthe2009 behaviour whendealingwithTerna. member companies,inorder togivethemupdatesaboutchanges totherequirements orsalientfeatures regarding ethical with theauthorisedsuppliercompaniesandtradeassociations(e.g.ANIE),whichrepresent thecommoninterests oftheir to improve theirknowledgeaboutspecificissuesrelating togroups ofsuppliers.Forexampleperiodicalmeetingsare held Department alsokeepsindirect contactwiththesuppliersregarding themanagementoftheircontractsbutalsoinorder carry outtheprocedures toqualifyasamemberoftheListAuthorisedSuppliers.ThePurchasing andContracts suppliers. Theportalcanbeaccessedtoconsultcallsfortender, takepartinbiddingforcontracttenderson-lineand The specific“Purchasing Portal”sectionofthecompany’swebsite represents thepointofcontactbetweenTerna andits Suppliers way thevariousgridzonesare dividedup,varioustechnical documents,etc.). and additionstotheregulations includedinTerna’s GridCode(changestothedispatching regulations, changestothe measures andtothedefinitionofPlaninitsentirety. TheCommitteealsotookpartinconsultationsregarding changes Development PlanoftheNationalTransmission Gridfor2009,payingparticularattentiontothenewplanneddevelopment During 2008,theCommitteemetalmostonceamonthandwascalledupontoexpress itsopiniononTerna’s draft disputes betweengridusersregarding theapplicationofGridCoderegulations. also providing conciliation,sincetheCommittee,uponrequest from theinterested parties,canhelpfindsolutionsto The Committeehasvariousfunctionsincludingconsultation,makingproposals aboutchangestotheregulations, and acting asobservers. the participationofmembersfrom theAuthorityforElectricityandGasfrom theMinistryofEconomicDevelopment using conventionalandnon-conventionalenergy sources, majorindustrialcustomers,wholesalersandconsumers,with for electricitygridoperatorsandthoserepresented includethevariousoperatorcategories,suchasdistributors,producers that regulates theunificationbetweengridownershipandmanagement.Itrepresents thepermanentconsultationbody The CommitteeisthetechnicalconsultationbodyestablishedinlinewithPrimeMinisterialDecree datedMay11,2004, Committee. During 2008,Terna continueditsongoingdialoguewiththeelectricitysectoroperatorsthrough theUserConsultation Consultation Committee Grid usersandelectricitysectoroperators initiatives isprovided. opinions from Certaininteresting journalists. pointsemerged socialresponsibility aboutthewayinformationconcerning contents ofthe2007SustainabilityReport.Theaimthese presentations wastoillustrateTerna’s activitiesandtogather and theenvironment. Duringthesemeetings,Terna’s approach towards sustainabilitywasillustratedonthebasisof Two meetingswere specialised intopicsrelating heldinNovember2008,aimedmainlyatjournalists tosocialresponsibility andsocialresponsibility workersandexperts Meetings abouttheSustainabilityReportwithspecialist journalists Media andOpinionGroups audience ofpeopleinterested inenvironmental andsocialresponsibility topics. box “Trino-Lacchiarella lines”. An examplethatprovides aclearexplanationofthisdialogueprocess withstakeholdersoftheterritoryisdescribedin The authorisationprocedure, which evolvesthrough aseriesofjointdepartment meetingslastsonaveragetwoyears. The pre-authorisation procedure lastsanaverageofthree yearsandisdividedintothefollowingsixphases: works ishighlycomplex. all thepartiesinvolved.Activityisintensesinceprocedure thatprepares andleadstotheauthorisationofnewbuilding Grid PlanningandDevelopmentDepartment:theirtimeisdevotedtoinstitutionalmeetingsjointinspectionvisits with should bereorganised. DialoguebetweenTerna andtheterritorialinstitutionsinvolvestwentymembersofstaff from the opinions ofstakeholdersandlookingforshared solutions astowhere tobuildnewinfrastructures andhowexistingones institutions (RegionalandLocalAuthorities,Forestry Commissions, etc.).Thisprocess alsoincludeslisteningtothe specifically, “Concertedplanningwiththeterritory”)andmainlyconsistsofanengagement process withthelocal Terna’s approach totheterritorymainlyhasdowithbuildingnewlines(seechapteron Environmental Responsibility, Coordination withLocalAuthorities Community andTerritory September 16,2008,duringtheSocialResponsibilityFaircalled“ Another discussionseminar, centred around thesustainabledevelopmentofelectricitygrid,washeldinMilanon resolving socialneedsatalocallevel. alongside itscurrent commitmentwiththeinstitutions,bycreating solidarity-basedinitiativesaimedatalleviatingor interesting pointsemerged, includingasuggestionthatTerna’s commitmentintheterritorycouldbemore structured, the Companyonitscommitmentwithinfieldofsustainabilityandcontinuedinformanopendebate.Several studentsandthird-sector journalism workers.Themeetingstartedwithapresentationtook partincludingjournalists, by the event,Terna wasoffered theopportunityoforganising aneveningmeetingattheresidential seminar. Aboutfortypeople was organised bytheRedattore SocialePress AgencyintheusualsettingofCapodarco Community. Assponsorof This seminar, whichisapointofreference forthoseinvolved ininformationthefieldofsocialaffairs andthethird sect XV Editionofthe of theinformation. recognised specialistsandtheirvalidationwouldprovide stakeholderswithadditionalelementsinassessingthecredibility of theReport’scontentsbyexpertsinvariousfieldsdiscussed.Thesecouldbeuniversityprofessors or valuable vehicleforcommunicatingTerna’s initiatives.Oneoftheproposals thatemerged suggestedpublishingavalidation lookedatwaysinwhichtheSustainabilityReportcouldbeexploitedasa conclusion, thedebatewithjournalists they provided afurtheranalysisofTerna’s commitmenttowards sustainabilitybyaskinganumberofquestions.In in thefieldofsocialresponsibility andtheenvironment tookpart,andafterthepresentation ofthecontentsReport, The meetingwasorganised byTerna andspecialistagencies alongthelinesofamediaworkshop.Anumberjournalists Presentation oftheSustainabilityReport,Rome,November20,2008 meetings withtowncouncilstoillustratetheagreed locationand the contentsofagreements. • meetings todefineandformaliseagreements oncompensationmeasures; • meetings todefinethefeasibilityareas withinthecorridorandformalise therelated draftagreements; • meetings inorder toapplythecriteriaterritoryandidentifycorridorwhere theworkshouldbeperformed; • withthelowestimpact; meetings todefineasystemofcriteriaforanalysingtheterritoryand selectingthealternatives • meetings todefineandformalisecollaborationwithinthefieldofStrategic Environmental Assessment; • Seminario diRedattoreSociale , Capodarco, November28-30,2008 Dal Dire alFare Dal Dire ” (“From Words toActions”),before an or, 49 Terna’s profile 50 Sustainability Report 2008 Trino-Lacchiarella lines 40 meetingsand23jointinspectionvisits 40 entitiesinvolved Numbers involvedintheconsultationprocess Lombardy: 13meetingsand11jointinspection visits • Piedmont: 6meetingsand3jointinspectionvisits • In order tochoosethefeasibility stripoftheroute: Lombardy: 15meetingsand6jointinspection visits • Piedmont: 6meetingsand3jointinspectionvisits • In order tochoosetheenvironmental corridor: 34Municipalities:8onthePiedmontside,26Lombardy side(23intheProvince ofPaviaand3inthe • 2 Parks:Parco Lombardo dellaValle delTicino,Parco AgricolosuddiMilano • 2 Provinces: Vercelli, Pavia • 2 Regions:Piedmont,Lombardy • Lombardy side. The consulationprocess isexpectedtofinishinMay2009on thePiedmontsideandbyendofJunefor comments/suggestions madebytheTown Councilsinvolvedandtoconductjointinspectionvisits. rationalisation process associatedwiththem,andthismade itpossibletotakeonboard someofthe willingness tocoordinate theconsultationactivitiesregarding thelocationofelectricitylinesand associated withthenewworks.Duringthesemeetings,RegionsandProvinces involvedexpressed their in order toreach anagreement aboutthefeasibilitystripofroute andtheactionplanforrationalisation Once theenvironmentally-preferential corridorhadbeenidentified,meetingswere heldwiththeLocalAuthorities documentation showingthemclearly. agreement wasreached aboutthefeasibilitystripsforroute andsubsequentlyTerna senttheanalyticalmapping the QualityandProtection oftheLandscape,Architecture andContemporaryArtArchaeological Sites, In theearlymonthsof2008,inameetingwithCentralAuthorities(andthosePiedmontandLombardy) for which wouldhostthenewelectricitylines.Piedmontformallyexpressed itsapproval inMarch 2007. ofLombardyIn October2006,theRegionalGovernments andPiedmontapproved theenvironmental corridor in theconsultations. were agreed jointly. From 2005onwards theParkswhichwouldinfuture becrossed bythelineswere involved number oftechnicalmeetingswere heldwiththeRegionalAuthoritiesandcriteriaforchoosinglocation with theidentificationofanenvironmentally-preferable corridorfortheelectricitylines. Between2003and2005a The consultationprocess washighlycomplexduetothenumberofentitiesinvolved(40).Itlaunchedin2003 km willbelaidunderground and78kmwillbedelocalised. critical points:withthemainpartofthisnewconstruction95km,215kmoldlineswillbedemolished,97 The buildingoftheseworkswillallowtheelectricitynetworktobevastlyrationalisedwithsolutionmany (95 kmat380kV)were designedtojointhestationsofTrino (Province ofVercelli) withLacchiarella (Province ofMilan). In order toresolve safetyproblems andtoplacenewavailableproduction inPiedmontintothegrid,newelectricitylines Province ofMilan) The followingaspectsemerged regarding publicreaction towards thepresence ofelectricitylines: a strong point. By comparingexpectationsandacknowledgedcharacteristics,Terna’s sensitivitytowards ecologicalthemesemerges as sensitive towards theenvironment (from 46%inFebruary2007to60%May2008). Compared toprevious editions,there wasanincrease of14percentage pointsintheacknowledgementthatTerna is The followingexpectationscomewellbehindwithfigures approaching 30%ofthosewhoknowTerna: The mostwidespread expectationthatthepublichasofTerna wasthefollowing: Sustainability Reportincludedthesurvey’sresults andtheoutcomesofsimilarresearch inprevious years. presence ofelectricitylinesintheterritoryandCompany’sinitiativesfieldsocialresponsibility. Lastyear’s Terna: itwishedtolookcloselyattheexpectationspublichasonCompany, atthegeneralpublic’sopinionon 1,500 peoplerepresenting thenationalpopulationofover18s.Thesurveyaimedatsoundingoutpublicopinion about In May2008,Terna conductedatelephonesurvey(through thespecialisedcompanycalledGfk-Eurisko)onasampleof Survey onasampleofthepopulation percentage ofthosefailingtoreply (18%onthequestionabout Terna, 5%onthequestion aboutelectricityutilities). possibly reflect ascantknowledgeofTerna andofthecharacteristicsitsbusiness:thisispartiallyconfirmedby savings andefficiency aswellemployeesafetyprevail overreducing thevisualimpact ofthesystems.Thisorder could This listofprioritiesisthesameasthatprovided bythesamplewithreference toelectricitycompaniesingeneral:energy With regard toinitiativesinthefieldofsocialresponsibility, Terna shouldengageinthefollowing: • in thetotalsample,includingthosewhodonothavedirect in experienceofelectricitylinesnear theirhomes,64%of • beingmanagedbyseriousandreliable managers(thisexpectationrankslower, 23%,intheélitesegment). • not onlythinkingofprofits, butalsoactinginthebestinterests ofthe CountryandItalians; • beingcapableofquicklysolvingcrisessuchasblack-outs; • beingsensitivetowards ecologyandenvironmental issuesandrespecting theenvironment (50%ofthosewhoknowTerna). • financeculturalandsocialsolidarityinitiatives(17%). • schoolsandfamiliesaboutelectricity(45%); inform • reduce thevisualandenvironmental impactofitssystems(45%); • employeesafety(72%); guarantee • contributetowards reducing greenhouse emissionsandpromote energy savings(80%); • presence the ofapylonisseenaboveallasbeinghealth-related issue(76%),asafety(68%)andlastlyasan • this lattergroup, in 58%feeltheseare notbothersome(oronlyslightly),while40%feeltheyare bothersome(24%quite • 40%ofcitizenscanseeelectricityplantswithina500meterradiustheirhomes;22%large systems • aesthetic problem (52%). oppose newlinesrises(32%); for peoplewhocanalready seealarge electricityplantfrom theirhome,because thepercentage ofthoselikelytoactively nearly aquarterofthesamplepopulationwouldactivelyopposeit.Thepercentage ofthoseagainstrisesslightlyto56% of theirhomes(58%).Neverthelessthemajority(52%)wouldnotacceptbuildingnewlinesnearand not bothersomeoronlyslightly. Thesituationchangesforthosewhocanseeelectricity lineswithina500meterradius bothersome and16%verybothersome).Mostofthepopulation(64%)considerthatpresence ofelectricitylinesis (systems thatare likelytobelongTerna); are (20%quitebothersomeand13%verybothersome); citizens feelthatthepresence ofelectricitylinesisnotbothersome (oronlyslightly),compared to33%whothinkthey 51 Terna’s profile

2008

Responsibility for the electricity service 56 Sustainability Report 2008 Context, managementapproach, andobjectives accessible ordisclosedtothird partiesnotentitledtoit. implements thebestpracticestoprotect confidentialdata,inorder tokeeptheinformationinitspossessionfrom being operators. Forthesedata,andthosethatitprocesses tomanagetheeconomicrelationship withthegrid’susers,Terna Terna withthetaskofdevelopingItalianstatisticsonelectricityindustry, for whichinformationiscollectedfrom indus dispatching services,andonelectricityproducers inparticular. Moreover, theNationalStatisticalSystemhasentrusted The functionofelectricitysystemoperatorrequires possessingconfidentialdataontheusersoftransmissionand efficiency willdetermineapositivebalancebetweendevelopmentcostsandbenefitsfortheelectricitysystemaswhole. Development. Developmentinterventionsare identifiedbyTerna alsoonthebasisofcondition thatthegrid’sgreater The griddevelopmentobjectivesare setoutintheDevelopment Planapproved yearlybytheMinistryofEconomic various aspectsthatimpactmaintenance,andwhere applicabletherestoration oftheelectricitysystem’ssafetyconditions. objectives findexpression inthedefencesystemsimprovement plan,aninvestmentplanthatschedulesinterventionson Terna’s role intheItalianelectricitysysteminvolvesspecificobjectivesrelated tosafetyandgriddevelopment.The always metorexceededthepre-established targets. Gas); ofthese,variousservicecontinuitymeasures hold particularimportance.Terna’s performanceinrecent yearshas the industryregulation authorities(inItaly, theAuthorityforElectricityandGas:AEEG-Autoritàperl’Energia Elettricae Management objectivesare therefore abovealllinkedtocompliancewiththeregulations andspecifictargets identifiedby account theneedtoguaranteeefficiency andsafetyrightnowforfuture generations. fundamental infrastructure ofthecountry, andtoday’smanagement,maintenance,developmentmusttakeinto Responsibility regards bothdailyandmedium/long-termoperation:thetransmissiongridisanassetforTerna, butalsoa complywiththeprinciplesofimpartialityandneutralitytoensure fairtreatment ofallthegrid’susers. • developandmaintaintheefficiency ofthetransmissionsystem; • provide asafe,reliable, uninterruptedandaffordable service; • as itsown.Inparticular, intheItaliancontext,itundertakesto: Terna thusstrongly feelstheresponsibility concession,andhasadopteditsobjectives entrusted toitbythegovernment of itspersonnel’sworkculture. responsible tothenationalcommunityasawhole;senseofresponsibility forautilityofgeneralinterest istraditionallypa companies distributingandsellingelectricity, theCompany’sessentialrole intheelectricitysystemmakesTerna ethically Although thefinalusersofelectricityserviceare notTern lines, andisdealtwithasanaspectofenvironmental responsibility. communication andmarketing,orsafetyfortheprotection ofpersons.Thelatterhastodowiththepresence ofpower goods andhavearelationship withthefinalconsumer, suchastheexplanatorycontentoflabelling,commercial Given thenature oftheservice,Terna isnotaffected byproblems ofproduct responsibility typicalofthosewhoproduce the serviceisindispensableforfunctioningofentire electricitysystemandtoensure electricityforallcitizens. about 98%ofthenationaltransmissiongrid(dataasDecember2008)andalsoplaysrole ofelectricitysystemoperator, plants tothenetworksofdistributors.Itisaservicerendered concession.InItaly, undergovernment where Terna owns Terna’s mainactivityistoprovide theelectricitytransmissionserviceonhigh-voltagelinesthatconnectproduction a’s direct customers,butratherthecustomersof try il rt Boundary: Group theprovision anduseofproductsconcerning andservices Monetary valueofsignificantfinesfornon-compliance withlawsandregulations PR9 Boundary: Group of customerprivacyandlossesdata Total numberofsubstantiatedcomplaintsregarding breaches PR8 G3 product responsibility performanceindicators in 2007(firstyear ofsurvey)or2008. No criminalsentencesunderfinal decisionorsettlementsforaccidentscausedtothird parties byTerna’s assetsoccurred industry authoritiesorothercompetent authorities,eitherinItalyorBrazil,were recorded. sanctions (seetheparagraph “Disputesandlitigations”,p.42).Andin20062008, nosanctionsagainstTerna by with theRegulatoryAuthority forElectricityandGasregarding the2003black-out, whichwere aimedatlayingdown In 2007,Terna relied onitsrighttopaythefineareduced extent–equalto55,645euro –thus closingtheproceedings for pre-established performance levels. corporate behaviourthatdoesnotcomplywiththerulesset fortheexercise ofthetransmissionservice,includingrespect regulatory powers,inbothItalyandBrazil.Theseauthoritiesalsohavethepowertohanddownsanctionsshouldthere be Electricity transmissionisanactivityperformedunderconcession andsubjecttoregulations byauthorities withbroad involve thepossessionofsensitivedata.There are nodirect relations withfinalconsumers. Relations withothergridownersandthesystemoperator(ONS)are ofanexclusivelytechnicalnature anddonot The indicatordoesnotapplytoBrazilbecauseTerna Participaçõesdoesnothavetherole ofTerna SpA’sSystemOperator. data ongridusers. Neither in2008,norearlier, were complaintepisodesencountered withregard toprivacyviolationorincautioususeof also capableofprojecting theCompanytowards possibledevelopmentswithaviewtoISO27001certification. improvement ofsecuritypractisesonsolidbases(processes, behaviour, awareness, roles, responsibilities andtechnologies) Starting from thedefinitionofspecificInformationSecurity policies,theprogramme triggersavirtuouscycleof the appropriate mixofprotection measures, withrespect foraprecise framework ofoperativerulesandprocedures. as theresult ofawell-organised process which,byinvolvingvariouscorporate figures ateverylevel,endsupidentifying The securityofinformation(andsystems)isnolongerseenastheresult ofasettechnologicalcountermeasures, but systems anddata,ontheotherofseekingcompliancewithincreasingly strictindustryandlegalregulations. NIST SP800standards, capableontheonehandofprogressively improving theprotection ofcorporateinformation The programme iscentred uponadoptinganadvancedInformationSecurityFrameworkinspired byISO/IEC27000and Security Managementmodel. bestpractices,basedondevelopingastructured in linewithinternational Information Information SecurityGovernance In termsofprotecting informationandcompany systems,2008sawthestartofaprogramme toimprove infrastructure containingcriticalinformation. making itpossibletoaddacloneinfrastructure thatactivatesintheeventofoutagetoinformationtechnology To furtherimprove thereliability ofthedatabases, theDisasterRecoveryproject entered intoforce inDecember2008, regarding dataprocessing are examinedintheProgrammatic DocumentonSecurity, whichisconstantlyupdated. industry statistics–adutydischarged byTerna withintheframeworkofNationalStatisticalSystem.Theresponsibilities parties notentitledtoit.Thisisalsotrueforthedatacollectedfrom industryoperatorsforthepurposesofcompiling protect confidentialdatainorder tokeeptheinformationinitspossessionfrom beingaccessibleordisclosedtothird the electricityexchange.Consideringthisinformation’sgreat commercial value,Terna implementsthebestpracticesto these dataare specifictotheplants,withtheirproduction capacities,andtotheintroduction programmes presented to of thetransmissionanddispatchingservices,electricityproducers andtradersinparticular. Forexample,someof In Italy, Terna hasthefunctionofelectricitysystemoperator. Thismeansitsdatabasesholdconfidentialdataontheusers 57 Responsibility for the electricity service 58 Sustainability Report 2008 Safety oftheelectricitysystem Additional information investment. As ofApril2008,Terna implementedthe fiftheditionofthePlanforyears2008-2011,calling183millioneuro in adjustmentofthesystemstointegrateneighbouringforeign gridsintotheNationalTransmission Grid’scontrol system. • extensionoftheanti-intrusionnetwork andvideosurveillanceofpowerstations; gradual • mitigation ofvulnerability, withthedevelopmentofSecurityOperation Centre, acontinuous-shiftfacilitythatmakes • effectiveness the ofthewindproduction forecast system,which allowedTerna tosuccessfullymeettheincentivisation • extensionofdisasterrecovery tothesystemsinvolvingelectricitymarket’sperformance; • reduced riskintheintegratedmaintenanceplanningprocess, whichwasmademore flexibleandorientedtowards the • 2008 recorded progress regarding: physical andcyber-attacks. In recent recognised editions,thePlanadoptedneed–internationally asapriority–toreduce vulnerabilitytointention of theoperationplanningandmonitoringinfrastructure. Subsequent Plansaddeddisasterrecovery techniques,which makeitpossibletoincrease thesturdiness andavailability national gridandintheneighbouringelectricitysystems,toassessrisksadvance. its mainpurposewastoprovide informationontheactivities tolimittheconsequencescausedbymajorfailures onthe euro in2004tothe48millioneuro recorded in2008.ThePlanhasalso seenamajorevolutionincontent.Inearlyeditions, represents anincreasingly importantcommitment:thisisdemonstratedbyinvestments,whichhavegrown from 10million Designed andcoordinated entirely byTerna, thePlanhasalsobecomeareference forcompanyprogramming and prepared everyyear, withathree-year horizon. approved bytheMinistryofEconomicDevelopment.The Planprovided forbythelawfollowing2003black-outis Commitment tocontinuousimprovement findsexpression intheelectricitySystemSafetyPlan,prepared byTerna and operation andreal-time monitoringare particularlyimportant.Continuouspersonneltrainingisalsoessentialtosafety. the defenceplansthatlimitextentanddurationofoutages,core activitiesforthepreventive planningof It isintheoperativephasethatactivitiesofoverseeingandprotecting thephysicalintegrityofplants,preparing developing andbuildingtheelectricitysystem,inmaintenance,operation. To reach highlevelsofsafety, Terna pursuesexcellenceinallsegmentsofelectricity dispatchingandtransmission:in by theCompanyforsometime. two TSOinEurope, contributedtodrawingupthepolicies,whichcontainoperatingpracticesalready trialledandadopted The UCTEpromotes closecollaborationbetweentheEuropean Transmission SystemOperators(TSO).Terna, thenumber- and regulation oftheflowselectricitybetweencountries. prescribe thebestpracticesinfieldofmanagingelectricitysystemswithreference tocriteriaofthesafety, frequency, Terna adoptssafetycriteriainlinewithUCTE(UnionfortheCo-ordination ofTransmission ofElectricity)policies,which consequences ofoutagesiftheyoccur. The objectiveistoreduce toaminimumthelikelihoodofserviceinterruption,andcontain,extentpossible, connected isadelicatetask,whichTerna carriesoutthrough agroup byarigorous ofactionsgoverned riskassessment. Guaranteeing thesafetyofnationalelectricitysystemandcontributingtocountrieswhichItalyis it possibletomonitorthephysicalsecurityofassetsand computersecurity; target made availablebytheAuthorityforElectricityandGas(AEEG); system’s safetyrequirements; al of theelectricitySystem’sSafetyPlan Interventions provided forinthefifthedition The SecurityOperationCentre (SOC) of electricalphenomenaandstate-of-the-artremote diagnosticsare priorities. Interventions toaccelerateinstallationinthestationandintroduce remote operationforthefunctionalmonitoring starting uptheSecurityOperationCentre, the extensionofthestationintrusionandvideosurveillancecontrol system. is tobecompletedandtested.Intheinfrastructure monitoringandsafetyarea, thefundamentalobjectivesregard through theadoptionofappropriate supportinstrumentsare tobestrengthened. Therepowering direction from abroad schedules forcarryingoutrepowering tests.Moreover, procedures tomanageandoperatethenewgridinfrastructure firewall; gradualextensionofthetelecommunicationssystem basedonconveyeddigitalwaves;compliancewiththe electricity system,through: thecompletionof backboneinfrastructure inproprietary opticfibre; completion ofthe reinforcement ofthetelecommunicationsinfrastructure instrumentaltomonitoring,conductinganddefendingthe and theadoptionofloadlighteningbasedonvoltagerelay. Thesystemrepowering area willseecontinuedstructural the islands.Themainstudieswillinsteadregard theassessmentofstrategiestosubdividesystemintoislands northeast/northwest remote Italy, shutterandextendthebuildingofnewBMEsystemtocentral/southern including the electricitysystem’sdefencestrategiesare priorities.Asregards thesystems,objectiveistocomplete outages. IntheRegulationandprotection systemsarea, interventionsonthedefencesystemsandsomestudies and thestreamlining ofarchiving systemstoenablegreater effectiveness intheactivityofreconstructing/analysing the onlinemonitoringsystemthrough thecompletionofvisibilitymajorItaliangridatavoltageunder220kV, theprogramming/marketas concerns process. IntheonlineMonitoringarea, substantialobjectivesincludeimproving regarding disasterrecovery andextendingtheapplicationboundary, and aconsolidationofmanagementprocedures of gridelements.Additionalcontextsimprovement willbedirected towards completingthelogisticalaspects of assessingmedium-termadequacy, anddefiningnewmodelsverifyingsecurityintheprogrammes ofnon-availability of “ondemand”,whichwere introduced in2008,reviewing theprocesses, improving thetoolstosupportprocess In thefinancialyearProgramming area, commitmentistowards perfectingthemodelsformanagingnon-availability SOC, whichcanthusactivate theforestry corpsandfire department. equipped withspecialsensors that,inthecaseofeventssuchasfire, sendasignalthrough theTerna networktothe and transmissionofinformation. Lastly, asregards monitoringthecorporatenetwork, theentire networkhasbeen network willalsobesubjectto monitoring,tocheckaccidentsandvulnerabilitiesthatmay compromise thesecurity visible from theSOC, whichwilllocatethepersonwherever heorshe is.Thedomainsofthetelecommunications areas considered “atrisk”,willbe givenahand-helddevicethatwillsendGPSsignaldetectable bysatelliteand The protective shieldoftheSOCalsoextendstopersonnel:thosewhohavegoabroad forwork,particularlyto operative unitsandlawenforcement willbealerted,forinterventionattheplantwhere necessary. detecting signallossfrom eachindividualsensor. ThesensorwillsendthealarmtoSOC,from whichthecompetent As regards monitoringmaterials,alltheassetstobeprotected willbeequippedwithspecialsensorsalsocapableof regarding seismicevents,are alsocirculated toTerna, whichsees to disseminatingthemalltheoperativestructures. Protection, thankstowhichallthenoticesregarding alarmofweatherorhydro-geological risk,aswellallpress releases Again inthecontextofprotecting theNationalTransmission Grid,specialagreements havebeeninitiatedwithCivil immediately acquire thevideoinformationoriginatingfrom theplants,inorder tocarryoutthenecessaryinvestigations. in theeventofaccidentsorintrusionsindividualstations, theSOCwillalarmpolicestations,which prefectures sothatpolicestationoffices maybeequipped with thevideosurveillancesystem’sterminals.Inthisway, formulated, callingforanti-intrusionvideosurveillancesystems atallpowerstations,inadditiontoalinkwiththe sensitive installations,agridprotection interventionplanwasthen carried out,attributingasensitivityindextoeach.Startingfrom themost To bettermonitorthestations,acensusofallTerna’s powerstationswas environmental monitoring. monitoring stationstomaterials,checkingICTplatforms,and and Environmental Security. Itsarea ofcompetenceextendsfrom The SOCguaranteesanintegratedsecurityprocess: Physical, Logical, model, wasinaugurated. In 2008,theSOC,acontrol centre thatresponds toTerna’s security 59 Responsibility for the electricity service Service continuity and quality

Continuity is the most important parameter for measuring the quality of electricity service. All the segments of the electricity system (generation, transmission and distribution) contribute to the final result: ensuring, for society at large, that electricity will be available, with interruptions beneath the pre-established thresholds and with suitable standards of technical quality. The tables on the following pages illustrate Terna’s performance with reference to the transmission system for which it is directly responsible. In particular, the results for recent years are reported, also with respect to the targets planned and objectives for 2009. Service quality is an objective also recognised by the Regulatory Authority for Electricity and Gas (AEEG). After a phase of observation of Terna’s performance, the Authority introduced, for the 2008-2011 period, a service quality incentivisation scheme, in which performance with respect to the pre-established targets activates an economic reward/penalty mechanism (see the paragraph “Revenue structure and regulatory framework”). The parameters of reference are Energy Not Supplied power and a new indicator: number of supply outages per user (NDU). This compound indicator, measured at the level of the individual Transmission Operational Areas, will be perfected with the surveys for 2008 and 2009. The incentivisation scheme will yield its first economic effects in 2010. During 2008, the data survey through the monitoring network in service since 2006 continued, also in collaboration with final customers and distributors. The equipment widely installed in the grid continues to provide important information on waveform quality.

AVERAGE SYSTEM AVAILABILITY – ASA

2002 2003 2004 2005 2006 2007 2008 99.500 99.400 99.300 99.278 99.212 99.150 99.200 99.123 99.262 99.100 99.152 99.050 99.000 99.027 98.900

Actual ASA (%) Target Target 2007 99.050% Target 2008 99.050% Target 2009 99.050%

ASA (Average System Availability) Defines the average availability for use of the electricity grid’s components in a certain period. This index may be expressed with reference to specific classes (for example, by voltage level), grid areas or, as in this case, the entire National Transmission Grid. The performance achieved in 2008 met the reference target.

CONTINUITY INDICATOR (SAIFI + MAIFI)

2002 2003 2004 2005 2006 2007 2008

0.24 0.23 0.23 0.23 0.22 0.22 0.22 0.21 0.22 0.21 0.20 0.21 0.19 0.18 0.17 0.18 0.16 0.15

2008 SAIFI+MAIFI (no./period) Target Target 2007 0.23 Target 2008 0.23 Target 2009 0.22

SAIFI+MAIFI (Short Average Interruption Frequency Index + Medium Average Interruption Frequency Index) This power failure frequency index is calculated as the ratio between the number of customers involved in brief (less than three minutes) and long (longer than three minutes) power failures and the number of users of the National Transmission Grid. The figure is rounded to the second decimal place.

Sustainability Report The performance achieved in 2008 exceeded the reference target.

60 Target 2007 0 200 400 600 800 1,000 1,200 1,400 SERVICE CONTINUITYINDICATOR (ENERGYNOTSUPPLIED -ENS) supplied inacertainperiod(ENSvalue)andtheaveragepow Average timeofinterruptionpowertheelectricitysystem(NationalTransmission Grid)inoneyear. Itiscalculatedast AIT (Average InterruptionTime) Target 2007 0.20 0.40 0.60 0.80 1.00 1.20 AVERAGE INTERRUPTIONTIME–AIT The performanceachievedin2008exceededthereference target. the seconddecimalplace. by eventsonotherconnectiongridsnot belongingtotheNationalTransmission Grid,andaportionoftheenergy notsuppliedd mechanism that,amongotherthings, redefined theENSindicator. Thenewindexalsoincludestheenergy notsuppliedtodirectl Starting January1,2008,withDecisionno.341/07,theAuthorityregulated thequalityofserviceperformedbyTerna, thro Grid, causedbyeventsaffecting theNationalTransmission Grid,anddidnotconsiderthe portionsduetomajoraccidents. service qualityontheNationalTransmission Grid.ThisKPIreferred totheenergy notsuppliedtotheusersdirectly connected Until 2007,theenergy process notsuppliedindicatorwasusedasinternal KPIforthepurposes ofthecontinuousimprovement o ENS (EnergyNotSupplied) (2) The term“MajorAccident”refers toanypowerfailure withenergy(2) notsuppliedgreater than250MWh.Theportionaffecting (1) Dataapproximated tothe unit2007. For thenewindex, the performanceachievedin2008exceeded thelevelofreference. that diminishesastheenergy notsupplied intheindividualmajoraccidentincreases. N Mh nenlpoes ES(W)i EGrgltos Target ENS(MWh)inAEEGregulations process ENS (MWh)internal Target AIT (min./period) 1.00 0220 0420 0620 2008 2007 2006 2005 2004 2003 2002 2008 2007 2006 2005 2004 2003 2002 0.62 367 550 MWh Target 2008 0.91 5 576 555 Target 2008 er absorbedbytheelectricitysysteminperiodbeingconsidere 0.94 1.00 (1) 0.68 424 Target 2009 1,300 MWh 0.56 358 1.00 644 0.99 the ENSindexisapercentage totheNationalTransmission he ratiobetweenenergy not ue toMajorAccidents d. Thefigure isrounded to y connecteduserscaused ugh anincentive/penalty f Terna’s performance in 1.00 1,300 815 0.66 2 . 61 Responsibility for the electricity service 62 Sustainability Report 2008 Brazil service qualityinTerna Partecipações’ssubsidiaries). indicator equalled99.97%in2008(seeTerna’s yearlyFinancialReport,p.102andfollowing,formore informationon (2) HDTandderating are phenomenathatreduce generation capacityingivenperiodsoftheyear. In Brazil The criticalpointsoftheelectricitysystem reductions forHighDischarge Temperature (HDT)andderatingofthermal generationunits • statisticalaccidentratesofgeneratorsbytypeprimarysource; • introduction ofnewgenerationplants; • technical features oftheplantsinoperation; • forecasting thepowerrequirement inthemedium term; • information. Inparticular, informationrefers to: operating ranges.Thisactivityiscarriedoutrelying onconstantlyimproving methodsandincreasingly precise maintaining theparameterscharacteristicofgridelements(voltagesandcurrents) withintheadmissible Italy withsuitablereserve margins, inorder tohandleunexpectedfailures orpowerconsumptionincreases, while compliance withsafetycriteriaandwithinacceptableriskmargins. This meanssatisfyingtheelectricitydemandin To ensure uninterruptedtransmissionservice,Terna mustguaranteethattheelectricitysystemisoperatedin activities were carriedoutin2008. availability ofnewgenerationplants,andtheconsolidation ofthedefenceplanforwhichsignificantadjustment the islands.Theseactionsincludecoordinated maintenanceofproduction units,thedemandtoanticipate In thissituation,Terna isadoptingallthemeasures availabletoreduce risks inoperatingtheelectricitysystemon those of2008. month ofSeptember2009,andonlyfrom thatmomentonwards willtheisland’ssystemmargins bebetterthan for Sardinia, itisstressed thatthenewlinkwith mainland, theSAPEIcable,willbeavailablestartingfrom the make theisland’selectricitysystemparticularlyexposedto theriskofpowerfailure, particularly in thesummer. As capacity, high accidentratesforthegeneratingunits,an The situationismore criticalinSicily, where thecombinationofincreased need,reduced availableproduction and considerablylimitsthepossibilityofperformingmaintenance, especiallyonthegeneratingunits. obsolescence –makesSicily’sandSardinia’s electricitysystemsparticularlyexposedtolong-durationbreakdowns, high accidentratefortheislands’generatingunits–significantly greater thantheaverageduetoplants’ of significantimportancefortheelectricitysystem’soperationinSicilyandSardinia. Allthis,togetherwiththe maintenance ofproduction unitslongerthanthatof2008. Someofthemaintenanceworkswillalsoinvolveplants resources are unchanged,orevenreduced. Inaddition,2009ischaracterisedbystoppagerequested for with lastyear, againstincreased needatthemaximumloadpeakexpectedonislands,availablegeneration As regards SicilyandSardinia, reduced margins incomparisonto2008are expectedfor2009.Infact,compared 2008, andwhichwillcontinueover2009,allowsmore resources tobeexploited. application showsnoparticularcriticalissuesformainlandItaly. Theincreased generationcapacityinitiatedinlate As regards theassessmentsofsafetyandadequacynationalelectricitysystemfor2009,method’s The methodologyadoptedallowsTerna toidentifyanysystemcriticalities. foreign gridOperatorsforthemanagementofoperatingproblems connectedwithelectricitytransfer. system’s technicalemergency andmonitoringcommittee,thePentalateralWorking Table withneighbouring or otherwise.Terna, infact,takespartthecontrol room formonitoringthePobasin’shydricsystem,gas Gas, andmakeitpossibletoprovide contributionsofusein managing anyandallemergencies, weatherrelated subjects involved,suchastheMinistryofEconomicDevelopmentandRegulatoryAuthorityforElectricity The evidencethatemerges from evaluationofthesystem’spowermargins are shared byTerna withallinstitutional non-availability duetoscheduledmaintenanceoftransmissiongridelementsandgeneratingunits. • NetTransfer Capacityandtherelative reductions plannedtoappropriately size theimportingofpower NTC– • historic trend offlowingwaterunits,orgeothermal,othernon-programmable source; • production capacityofhydro generationunitsthatcanmodulateproduction; • from abroad; , theNationalSystemOperatordefinedatransmissionlineavailabilityindicator. ForTerna Participações,this d themaintenanceofgenerationplantscriticalforoperation 2 ; Grid development Consultation Committee,whichexpressed itsfavourable opinion. Garante dellaConcorrenza delMercato (theantitrustauthority),hadalready beensubmittedfortheevaluationofUser For aresponse onthemainexpectationsofstakeholders, the2009Plan,inaccordance withtheprovisions ofAutorità Development onJanuary30,2009forapproval (as provided forbytheConcessionofApril20,2005). Approved byTerna’s Board ofDirectors onDecember17,2008,the2009-2018PlanwassenttoMinistryofEconomic “Development planandstrategicenvironmental assessment”). methodology inaccordance withtheprovisions ofEuropean UnionDirective no.42of2001(see thefollowingbox, In 2008,Terna wasthefirstfirminItalytosubmitDevelopmentPlanStrategicEnvironmental Assessment also detailingprogress oftheworksplannedinyearspast. Every year, Terna prepares aDevelopmentPlanthataccountsfortheinterventionsplannednexttenyears,while carrying themoutisinfactthatthecollectiveeconomicbenefittheygeneratewillbegreater thantheircost. The interventionsthatTerna plansandcarriesoutalsohavepositiveimpactsonsocietyatlarge: theassumptionmadein production andconsumption,toincrease itsefficiency. For thisreason, Terna prepares programmes forinvestingingriddevelopment,order tokeepitinstepwithdeveloping (congestion, intechnicalterms). areas ofthecountry. Thecombinationoftheseelementsmodifiestheflowselectricity, showingupinbottlenecks New production plantsrequire connectionstothegrid;demandforelectricity, likesupply, grows differently indifferent production andconsumption. The transmissiongridmustbegraduallymodifiedandextendedinaccordance withthedevelopmentofelectricity department tocombatfires Agreement inSicilywiththeregional forests the linesaffected bythefire. Forestry Corps,andatthesamewillreduce requests forinterventionbyTerna’s personnelinvolvedinidentifying By creating strong synergy, thisagreement willstrengthen theactivitiesalready performedbytheRegionofSicily’s operators free ofcharge, soastoupdateallpersonnelbeengagedintheforest fire extinguishingtaskforce. Moreover, especiallyforRegionofSicily’sForestry Corps,Terna willmakeavailableteachingmaterialandtechnical extinguishing times. disconnection ofthelinesaffected byfires, soastopermitthe interventionofaerialequipment,thusreducing extinguishing activitiesforthe2009summerseason.Inparticular, theagreement callsforacceleratingthe Terna andDipartimentoregionale delleForeste havesignedanagreement toimprove coordination offire 63 Responsibility for the electricity service 64 Sustainability Report 2008 Works performed Main developmentactivities scheduled in2009. Works willcontinueuntil2011. below sealevel –theworld’sdeepestfor atotalinvestmentexceeding 650millioneuro. Partialentryintoserviceis electricity system.Itwillbearecord-setting cable:420kminunderwaterconnection, laidatadepthofupto1,600metres Sardinia totheItalianpeninsula. ThisisoneofTerna’s mostimportantstrategicactionstowards strenghtening thenational A majorpartofthe2008development activityregarded theworkstodevelop SAPEIsubmarinecablewhichwilllink high-voltage linesenterservice. 2008 alsosawtransformation capacityincrease byabout1,000MVA and250MVAR, andapproximately 50kmofnew cable link,thefirststepin Bussolengo220kVstreamlining, wasbuiltintheprovince ofVerona. Over thecourseofyear, the220kV“Avise-Villeneuve” link wasstrengthened, andanew132kV“Chievo-Verona Sud” Colle nearBari.Bothare employedtocollecttheproduction ofnewgenerationplants. Two stationswere inauguratedin2008:a380kVstationPriolothe province ofSyracuse,andtheotherinPalodel Development planandstrategicenvironmental assessment public consultationonthe2009DevelopmentPlanand 2009Environmental Report. With anannouncementinGazzettaUfficiale (no. 51ofMarch 3,2009)onMarch 3,2009,theMinistryinitiated In lateJanuary2009,Terna transmittedthe2009 Development PlantotheMinistryofEconomicDevelopment. 15 ofJanuary20,2009). Approval wasmadepublicbythesameMinistryinJanuary 2009,withanannouncementinGazzettaUfficiale (no. As ofDecember2008,theMinistryEconomicDevelopmentapproved the2008DevelopmentPlan. to promptly identifytheunforeseen negativeimpactsandadopttheappropriate corrective measures. approved DevelopmentPlan,andverifiestheachievementof thepre-established sustainabilityobjectives,soas Monitoring ensures control overthesignificantimpactsonenvironment derivedfrom implementationofthe thathadbeenidentified. Development Planwaschosenamongthepossiblealternatives and howtheresults oftheconsultationswere takenintoaccount,aswellthereasons whytheadopted a summarystatementillustratinghowenvironmental considerationswere integratedintotheDevelopmentPlan revises theDevelopmentPlaninlightofjustifiedopinionas expressed. Itthenapproves thePlanbyattaching Where necessary, theMinistry ofEconomicDevelopment,incollaborationwiththeMinistryEnvironment, suggestions received; withinninetydays,inagreement withtheMinistryofCulturalAssets,itexpresses itsopinion. investigation activitiesandevaluatesallthesubmitteddocumentation,aswellobservations,objections, The MinistryoftheEnvironment, incollaborationwiththe MinistryofEconomicDevelopment,carriesouttechnical finding andassessment. and oftheEnvironmental Reportandsubmitanyobservations, togetherwithnewandadditionalelementsforfact submission, the60-dayconsultationphasebegins:anyonemayexamineproposal oftheDevelopmentPlan to theMinistryofEnvironment, theregions, andtheprovinces whoseterritoryisaffected bythePlan.After The Environmental Report,thenon-technicalSummary, andtheproposal oftheDevelopmentPlanare submitted consideration oftheDevelopmentPlan’sobjectivesandterritorialsetting. may haveontheenvironment andculturalheritage,aswell thereasonable thatmaybeadoptedin alternatives The report mustidentify, describeandassessthesignificantimpactsthatimplementationofDevelopmentPlan its entire developmentandapproval process. The Environmental ReportisTerna’s responsibility, isanintegralpartoftheDevelopmentPlan,andaccompanies Monitoring. 6. Decision; 5. Assessment; 4. Consultation; 3. Preparing andpresenting theEnvironmental Report(ER)andthenon-technicalSummary; 2. Preliminary phase(Scoping); 1. The DevelopmentPlan’sSEAprocedure isstructured insixphases: – SEAsectionandexpresses itsjustifiedopinioninagreement withtheMinistryofCulturalAssets. authority istheMinistryofEnvironment, whichforitsinvestigativeactivitiesrelies ontheTechnical Commission For theNationalTransmission Grid’sDevelopmentPlan,theSEAwasperformedatstatelevel.Thecompetent and underwentsignificantmodificationswithLegislativeDecree no.4/2008. was adoptedinItalywithLegislativeDecree no.152/2006(Environment Code),entered force onJuly31,2007, Assessment (SEA)totheplansandprogrammes thatmayhavesignificanteffects ontheenvironment. Thedirective In issuingDirective no.42/2001/EC,theEuropean Unionprepared applicationoftheStrategicEnvironmental Chiaramonte Gulfi-Ciminna Vesuvio powerstation Codrongianos connections Santa Teresa-Buddusò SAPEI Elba-mainland Santa Barbara-Casellina Colunga-Calenzano La Casella-Caorso Turin streamlining Trino-Lacchiarella Milan streamlining Val d’Ossolastreamlining Valcamonica-Valtellina streamlining Connection ofnewplants Works intheauthorisationprocess 23plantsforproduction from renewable sources. • 13production plantsfrom conventionalsources; • 7 primarydistributionsubstations; • Over thecourseof2008,workswere concludedtodevelopgridplantfortheconnectionof: for themanagementofconnectionrequests, whichpermitsunivocalcoding,traceabilityandtheprocess’s transparency. costs andtimesofreference intheworksperformed.Terna satisfiesthese needswithaninformationtechnologysystem Terna, suchasrequest handlingtime,determinationoftheelementstechnicalconnection solutions,andtheaverage Current regulations manyphasesinthenetworkinfrastructure govern accessprocess, definingmargins ofdiscretion for attitudes thatmayappeardiscriminatoryagainstapplicants. however, solutions,whichmustbeapproved examinealternative byAEEG toreduce toaminimumthepossibilityof e ilGas-AEEG).Thedescriptionofthetypicalconnection solutionsisafundamentalpartoftheGridCode.Terna may, The gridinfrastructure accessactivityisregulated by theAuthorityforElectricityandGas(Autoritàperl’Energia Elettrica – streamlining –aimedatreducing thepressure ofnewinfrastructure ontheterritory. For thesameinterventions,Terna reached agreement inadvancewiththelocalbodiesinvolved,astoasetofinterventions strengthening oflineto380kV, Foggia-Benevento. • streamlining to380kVintheProvince ofLodi(ChignoloPo-Maleo); • streamlining to380kVbetweenVenice andPadua(Dolo-Camin-Fusinaintervention); • newdoublecircuit the 380kVline,Sorgente (Sicily)-Rizziconi(Calabria)–aerialsection; • The authorisationprocesses forthefollowinginterventionsare stillinprogress: new doublecircuit 380kVline,Trino powerstation-Lacchiarella powerstation. • new doublecircuit 380kVline,UdineOvestpowerstation-Redipugliastation; • In 2008,Terna initiatedtwomajorprojects inauthorisation: SUMMARY OFMAININTERVENTIONS, 2009-2013 DEVELOPMENTPLAN nevnin nteatoiainpoes Interventionsbeingcarriedout Interventions intheauthorisationprocess Fano-Teramo andMaceratapowerstation Reorganisation ofnorthCalabriagrid Verona (Bussolengo)streamlining Montecorvino-Benevento Redipuglia-Udine Ovest HVDC Italy-Montenegro Candela connections Udine Ovest-Okroglo Trasversale Calabra Dolo-Camin-Fusina Sorgente-Rizziconi Trasversale Veneto Foggia-Benevento Foggia-Villanova Paternò-Priolo 65 Responsibility for the electricity service 66 Sustainability Report 2008 Coordinated planningamongEuropean transmissionoperators on imports,withoutlosingsightofthecompetitivenessand actualsettingupofthedomesticenergy market. of sustainabilityandgreenhouse gasemissions,aswellintermsofsecurityprocurement anddependence for bytheEuropean Commission,whichsettheobjectiveofdealingwithreal energy problems from thestandpoint represents theprompt response bynetworkoperatorstotheimplementation ofthe“3rd Energy Package”provided the “UCTETransmission NetworkDevelopmentPlan” publishedforthefirsttimeonJune3.Thedocument 2008 wasalsoanimportantdateforcoordinated planningbetweengridoperatorsandmembersoftheUCTE,with this makesamajorcontributiontowards creating reliable andefficient European markets. new associationwillbeinoperation:Entso-E(European NetworkofTransmission SystemOperatorsforElectricity); Starting onthecomingJune1,asdecidedby42Transmission SystemOperators(TSOs)in34countries, a transmission gridfrom PortugaltoPoland,from HollandtoRomaniaandGreece. System OperatorsincontinentalEurope thatcoordinates thefunctionanddevelopmentofEuropean electricity Italy ispartofUCTE(UnionfortheCoordination ofTransmission ofElectricity)–theassociation24Transmission involved, withregard bothtooperatingactivityandplanningnewinvestment. BALTSO, UKTSOA,ATSOI, andUCTE.Eachoftheseorganisations performscoordination betweentheoperators The European electricitygridisbroken downintofivemacro-regions thatrefer tofiveorganisations: NORDEL, South West Central South Central West UK &Ireland Northern BALTSO ATSOI UKTSOA NORDEL UCTE EU MEMBERS

DK-W

DK-E

BG Central East South East Baltic Engineering andinnovation Projects fortheplants’improvement andreliability Plant maintenance the followingchart. As regards thestudiestoinnovate anddevelopnewengineeringsolutions,there are fourareas ofresearch, illustratedin centre inwhichitholds a24.4%stake. also relies onthespecialistsupport ofbuildersanduniversities,thecollaborationCESI SpA,aspecialisedresearch monitoring andanalysisofthe behaviourofequipmentandplant,thesemencontinuously search forimprovement. Terna plants, andtherefore thequalityofservice,Terna makesprevalent useofin-housetechnicians.Through careful To introduce newtechnologicalandplant solutions,newinstrumentsandmethodsaimedatimproving thereliability ofthe massivecampaignisunderwaytoreplace a highvoltageinoilwithsimilarequipmentinsulatedSF • specificationforatrialsystemtheonlinemonitoringofmainhigh-voltage equipmentwasprepared. the The • modifications tobemadethecontrol the systemsandthedataflowtoremote conductioncentres, remote • accelerate interventionsonfailures: The followingare themainactivitiesperformedin2008 forthepurposesofimproving thereliability oftheplantsand Extraordinary maintenanceactivity: • Works undervoltage: • Ordinary maintenanceactivity: • monitoringandcontrol Plant activity: • The mainactivitiesperformedonpowerstationsandlinesare asfollows. these ends,tomakeidentifyingandreaching theplantsfaster, Terna usesageoreferencing system(GIS). Improving thelevelofmaintenanceplantshasapositiveeffect onthequalityandcontinuityofservice.Towards alsoonthelines,campaigncontinuedtoreplace glassinsulatorswithotherconsistingofcompound • thepowerlines,instrumentcheckactivitieswere on increased withthermal camerastoidentifyhotpoints,andwith • multi-yearcampaignisunderwaytodeveloplocalcommunicationsinfrastructure a atpowerstations.Thiswillmakeit • voltage, increase theavailabilityofplants,andconsequently contributetowards improving servicequalityandcontinuity. environmental constraints,removing branchestomaintaindistanceandsafety. Herbicidesare never employed. include plantcutting.Interventiononvegetationnormallyinvolveseithercuttingtrees downtotheground or, inthecaseof Business Intelligence)isemployed:thisallowsmaintenanceactivitiestobeoptimised.Linealso For thispurpose,anexpertsystemtosupportthelineandstationmaintenanceactivities,calledMBI(Maintenance from theintegratedremote conductionsystem,from theonlinesensors,andfrom whatemerged duringplantmonitoring. it identifiestheinterventionstobeperformedbasedonstrong andweaksignalsfoundfrom theinformationoriginating Monitoring system.Trialling isplannedattheLacchiarella powerstation; procurement routine wasalsoinitiated.Thedatafrom theequipmentwillbeconveyedthrough theElectricityGrid Device), insuchawayastobeableperformworkonthelinewithoutneedingsendpersonnelStations; command ofsecuritymeasures onthelineandearthdisconnecting switcheswere designed(DisconnectingSwitchLock or industrialpollution. materials orofglasspre-varnished withsilicone resins, inorder the conditionofcomponentsforschedulingpossiblemaintenance interventions; ultraviolet cameras(Daycor)tosurveythecorona effect oninsulators,conductors,andterminalboards, inorder toassess failure onhigh-voltagelines,andthus toacceleratetheintervention; developed tocapitaliseonassetsalready present, andtoremotely obtaininformationonthelocationofpoint possible tointroduce monitoringtechnologiesandremote diagnostics.For24powerstations,opticfibre LANswere safer; year), ofwhichabout1,600byhelicopter. performed onownedlinesforatotalofapproximately 85,000kmofinspecteddoublecircuits (abouttwoinspections a periodic surveillance/technicalcheckswere performedonthestationsatvariousvoltagelevels.Visual checks were also conductors, withtheconsequentriskofshortcircuit, lineinterruptionandpossiblefires. Line monitoringisalsoaimedatevaluatingthegrowth ofvegetation,inorder toprevent contactbetweenplantsand • • supports, 200kmofconductors,170guard wires, and3,100insulatorchainswere renovated; in thearea ofthestations,60stallswere renovated, and7transformersreplaced. in thearea ofpowerlines,inadditiontothecompletereconstruction ofabout17km150kVline,approximately 250 approximately 2,400interventionswere performed.Theseinterventions,carriedoutwiththelineunder Terna carriesoutmaintenanceactivitiesunderan“oncondition”policy, whichistosaythat during 2008,inadditiontothechecksprovided forbylaw, approximately 10,600 to reduce thegrid’svulnerabilityinzoneswithhighsaline 6 , whichisintrinsically 67 Responsibility for the electricity service 68 Sustainability Report 2008 ups Projects andworksprogress, 2008 Purpose nrae uoain Newdevicesforearthingworks Increased automation. Newsensorsonequipmentandmachinery Early signallingofanomalies. impact and/orimproved environmental integration. Design ofsupportswithreduced visual Power stations: reduced space and construction times. Compact integrated station equipment (MCI) equipment station integrated Compact Power stations:reduced spaceand constructiontimes. Lightstructures tobeusedforreplacement in highlypollutedenvironments. Improved surfaceinsulation Rapid replacement offallensupports. Conductorswithhighthermallimit Stronger transmissioncapacityofexistinglines. Optimisation ofstructures andmaterials Equipment diagnostics New equipment Plant safety Contest scheduledtoconcludebytheendof2009. for thedefinitionof“preliminary projects”. by thejuryandpassedontosecondphase,whichcalls entrants submittedtheir“idealproposals” whichwere selected In 2008,thecontest’sfirstphasewascompleted:eligible (pylons fortheenvironment) contest in collaborationwiththeleading disconnectingswitchsuppliers. 2009 willseetheinstallationof 80 prototype devicesdesigned quicker manoeuvres ontheplants.Trialling hasbeencompleted; Devices designedandproduced toreplace theoperator, for a viewtopotentialwidespread installation. Lacchiarella station.Theywillbe theobjectofatrialperiod,with been definedanddeveloped,are being installedatthe New typesofsensorsplacedonequipmentandmachineryhave International “ International of thefirstpoletookplaceinMarch 2009. designed bySirNormanFoster, tobebuiltin2009.Theassembly In 2008,project definedforthefirstsectionoflinewithsupports Foster pylons lines, tobeusedonsomesoon-to-be-builtpowerlines. Tests underwayforaprototype tubularsupportfor380kV lines withgreater mechanicalperformance,availablestarting2009. Design initiatedforasecondsetofsupports150kVpower to reduce theworksite’simpactaswell. which are inservice,Valdossola, andmountedbyhelicopter been completed.Thefirst40supportsare installed,partof to beusedinplacesofstrong scenicinterest (e.g.Parks)has Structural designofaninitialseriessupportsfor150kVlines Tubular, single-polesupports Sicily –begun. on twoplants–LagoBoracifero inTuscany andCasuzzein In 2008,Arco andArdenno were activatedandconstruction envelope, itreduces thespaceoccupiedfordevelopingstations. functions (switching,sectioningandmeasurement) inasingle New equipmenthavebeenspecified:byenclosinganumberof under voltagesuccessfullytrialled. developed, andthemethodfortheirreplacement withline The technologyforthediagnosticsofinsulatorshasbeen industrial pollution. are particularlyadaptedtoareas thatpresent strong salineor Given theirsurfacecharacteristicsandlightness,insulators Polymer insulators made availabletoTerna’s maintenancecrews. procurement, bytheendof2009,first6supportstobe tenderbegunforthe Study completedandinternational Villarodin 380kVinterconnection tobedevelopedstarting2009. and criteriadefinedtoreplace conductorsonthePiossasco- Conductors ofnumerous 132/150kVlinesegmentsreplaced, and reduced lengthening Tralicci perl’ambiente ” A powerstationinasmallarea was completedinjustsevenmonths,andisanimportantprototype forthefuture. – andconstructionsolutionsguaranteeingminimumleakage. Developmenttimeswere alsorecord setting:Arco 500 m In 2008,Terna’s capacityfortechnologicalinnovationmadeitpossibletobuildapowerstationinanarea ofonly SF further reduce thespaceoccupiedbyplant,itwasalsonecessarytoactuponsystemofbars,usingan Compact Modules(MCI),theyinclude,inasingledevice,all theequipmentthatconstitutesanormalsupport.To To overcome suchspacelimitations,equipment recently introduced intoTerna’s plantswere used.CalledIntegrated and advancedserviceszone,inaverylimitedarea. Itwasnotpossibletoacquire anyotherneighbouringarea. This isnottobeconsidered anexercise instyle:indeed,theplanthadtobeplacedatcentre ofanindustrial The stationwasbuiltatArco intheProvince ofTrento. fact haslowervolumesofSF It isasetofinterventionswithbenefitsalsofrom theenvironmental standpoint:theArco station’sarchitecture in more cheaplyandquickly, thesamecompactnessbenefitstypical ofGIS. normally plannedforIntegratedCompactModules.Integration ofthetwosolutionsmadeitpossibletoachieve, 6 insulated systemsimilartothatoftheGIS(GasInsulatedSubstations), insteadoftheconventionalairsystem 2 , insteadofthe3,500m 6 – aninsulatinggasnormallypresent inequipmentandasource of greenhouse gases 2 normally neededfortherequired technicalfeatures. 69 Responsibility for the electricity service

2008

Economic responsibility 72 Sustainability Report 2008 Context, managementapproach, andobjectives ( financial analystsduringthecourseofaspecialpresentation. FurtherinformationisavailableonTerna’s website which isprovided inthisReportthechaptercalled“Terna’s profile” (p.21).DetailsofthePlanare alsosuppliedto The developmentoftheseaspectsandthegoalssetforeachthemare dealtwithintheIndustrialPlan,adescriptionof structure and regulatory framework”onp.24. For more detailsontherelated effects ofthegrowth factors mentioned,pleaserefer totheparagraphentitled“Revenue creation ofinterconnection lines.(Seethebox“Italy, anelectricityhubfortheMediterranean”onp.30). MediterraneanandtheBalkans,wherethe Southern anumberofprojects are beingdevelopedinvolving inparticularthe Participações wasannounced,thesearch fornewinvestment opportunitiesinthetransmissionsectorhavecentred on Other opportunitiesforgrowth lieinexpandingbusiness abroad. SincethesaleofBraziliansubsidiaryTerna non-regulated activities.Theseactivities,whichmainlyincludeservicesprovided toothercompaniesinthesector, are in • carryingoutinvestmentworkasstipulatedinthenetworkDevelopmentPlan; • search foroperational efficiency; • acquisitionofnewassets,inparticulartheremaining partsoftheNationalGridwhichare notyetownedbyTerna. This • cannot beachievedthrough anexpansioninitsmarketshares andispromoted through thefollowingmainfactors: Terna hasamonopolyinItalyitsmanagementofelectricitytransmission.Growth inbusinessandrevenues, therefore, service obligations,inparticularregarding thesecurityofelectricsystem. these twoaspectslieswithinitssearch foroperationalefficiency andopportunitiesforgrowth, incompliancewithits Responsibility fortheelectricityservice,are integratedwiththoserelating toeconomicperformance.Thesynthesis of Terna believesthattheserviceobjectives,asreferred tointheopeningparagraphofpreceding chapteronthe paragraph entitled“Developmentandmanagementofhumanresources” onp.136. Balanced Scorecards are alsousedtocalculatethevariablesalarycomponentsincludedinbonussystem(see logically connectedwitheachother, andperiodicallymeasure theirstateofprogress. The objectivesmonitored usingthese management toolallowstheusertofixasetofeconomic,organisational andskillsdevelopmentobjectives,thatare which measures theprogress oftheobjectivesreferred tointheIndustrial Plan,withBalancedScorecards. This is alsousedforreporting tothefinancialmarkets.Inadditionthis, Terna assessmentsystem, alsoemploysaninternal In order tomonitoritseconomicperformanceduringthe year, Terna usesaquarterly, financialaccountingsystemwhich www.terna.it reduces thepotentialfornon-regulated business. some respects apartialtrade-off withthefirstpoint:acquisitionofnewportionstransmissionnetworkactually portions ofthetransmissionnetworkthatare notyetownedbyTerna canbeconsidered asnegligible; process covered thethree-year period2006-2008;withtheacquisitioninApril2009ofEnel’shigh-tensioncables, ) intheInvestorRelations/Presentations section. tune of1.4millionand1.6euro, respectively (netoftherelated taxation). overall effect oftheseadjustmentsledtoahigherlevelnetprofits andlarger netequityasatDecember31,2007tothe assets. Asdescribedingreater detailintheConsolidated FinancialStatementsasatDecember31,2008(seep.128),the (which sincetheJanuary1,2006havesatisfiedrequirements ofIAS23R)were capitalisedasacostitemofthese the financialcharges relating totheconstructionandpurchase of property, plantandmachineryintangibleassets Commission attheendofmonthDecember2008.Theearlyapplicationthisstandard meant,inparticular, that were recalculated onthebasisofearlyapplicationIAS23(reviewed in2007),whichwasapproved bytheEuropean Consolidated Value AddedStatement,theitembalancesofcertaincomparativefigures relating toDecember31,2007 In drawinguptheConsolidatedFinancialStatementsasatDecember31,2008,andaconsequence,inpreparing the amounting to1,974,690euro. exchange ratefor2008(seeTerna’s FinancialReportfor2008onp.53).TheTerna Group sustainedoveralldonationcosts Donation costsfor2008amountto1,110,600euro forTerna SpAandabout864,090forTerna Participaçõesattheaverage prepared inaccordance withtheIFRS/IAS.TheTerna Group hasbeenusingtheIFRS/IASprinciplessince the2005financialyear. A The figures relating tothecreation anddistributionofValue showed asignificantreduction (from about10%downto1%). reduced. Althoughthislastfigure isstillthesmallestoffivecategoriesforallocatingValue Added,itwastheonewhic payments showedanincrease, whilepaymentstotheStateAdministrationandallocationsreserve fundswere both three-year periodinquestionwithanaveragevalueof25%and31%respectively. Ontheotherhand,credit capital 2006-2008. Thedistributivequotasrelating toemployeesalariesandriskcapitalremained substantiallystable duringthe The Value AddedgeneratedanddistributedbytheGroup registered anincrease of1.9%duringthethree-year period Boundary: Group andpaymentstocapitalprovidersretained andtogovernments earnings employee compensation,donationsandothercommunityinvestments, Direct economicvaluegeneratedanddistributed,includingrevenues, operatingcosts, EC1 economicperformanceindicators G3 ddwere taken fromdded the Con solidated FinancialStatement, h 73 Economic responsibility 74 Sustainability Report 2008 TERNA GROUPVALUE ADDEDSTATEMENT * The2008dividendsrefer tothosedistributedthird partiesbyTerna SpA(316.1millioneuro) andbyTerna Participações (*) loain orsre1,5,1 1,9,5 99,825,999 291,800,000 1,009,936,430 322,709,374 111,499,158 99,825,999 1,009,030,391 1,028,626,474 328,155,134 13,256,715 111,499,158 13,256,715 47,521,890 14,195,732 849,792 291,800,000 72,044,252 67,446,159 235,174,142 14,905,302 322,709,374 71,312,756 173,580,625 102,567,782 24,418,236 3,483,147 328,155,134 193,028,465 78,263,512 120,415,934 18,503,828 142,242,062 1,227,396 199,335,122 58,064,208 248,524,623 3,937,131 Net globalvalueadded 249,369,874 189,233,019 51,036,274 244,093,870 188,485,927 189,120,465 E -Corporateremuneration 1,582,934 270,432,802 57,368,481 1,009,936,430 Allocations toreserve 217,446,701 211,481,387 1,009,030,391 193,651,637 18,804,937 D -Remunerationofonriskcapital 1,028,626,474 Dividends* 233,281,293 23,380,193 97,589,776 C -Remunerationofonborrowed capital 251,807,678 1,222,393,004 Charges onbondissues 28,608,234 32,893,367 1,265,691,877 Charges onbankmortgages Charges forshort-termcapital 1,309,042,386 26,273,306 B -RemunerationoftoStateAdministration Indirect taxes Direct taxes 1,124,803,228 A -Remunerationofpersonnel 1,232,798,510 Employees: indirect remuneration 1,282,769,080 188,506,882 Employees: direct remuneration Non-subordinate personnel 166,560,079 Net globalvalueadded 178,761,960 Depreciation oftangibleassets Amortization ofintangibleassets 1,313,310,110 1,399,358,589 Gross globalvalueadded 1,461,531,040 Balanceofancillaryitems 12. 36,814,283 Gross standard valueadded 1,276,495,827 1,348,166,676 51,191,913 Total intermediateproduction costs 1,395,189,955 66,341,085 B. Global production value Revenuesfrom atypicalproduction (lowcostactivity) 5. Revenues from standard production A. .Poiin o ik ,8,7 ,8,1 12,881,120 5,688,218 11,658,905 128,432,873 8,938,057 2,083,272 121,549,334 16,874,507 15,113,695 118,083,553 18,659,477 13,681,375 16,703,095 13,169,234 30,312,206 47,799,759 51,991,730 58,940,584 1,228,696,068 1,296,174,946 Sundryoperatingcharges 1,336,249,371 11. Provisions forrisks 9. Costsforuseofthird partyassets 8. Costsforservices 7. Consumptionofrawmaterials 6. Otherrevenues andincome 4. Revenuesfrom salesandservices 1. in euro nilr ot 9,4,3 4796695,861,509 84,789,606 193,451,285 193,344,539 117,682,973 219,617,845 - Ancillarycosts - Ancillaryrevenues The 2006dividendsrefer tothosedistributedthird partiesbyTerna SpA(280millioneuro) andbyTerna Participações(11.8 The 2007dividendsrefer tothosedistributedthird partiesbyTerna SpA(302.1millioneuro) andbyTerna Participações(20 Production costs Production value 2008 (12.0 millioneuro). 072006 2007 millioneuro). .6 millioneuro). and consumerattitudes.ThepotentialcomebacksonTerna’s businessactivitiesrelate tothefollowingaspects: remote, risksandopportunitieslinkedtoglobalwarmingthereactions thatthismightprovoke withgovernments Nevertheless, Terna recognises thegrowing importanceofclimatechangeandhasidentifiedcertainpotential,thoughrather performance. Climatechangedoesnotrepresent athreat forTerna withregard toitsforeseeable businessprospects. or theinclusioninemissiontradingschemes)whichcouldhavedirect effects onTerna’s businessandfinancial Therefore, there are nolikelyfiscalprogrammes (e.g.carbontax)orregulatory programmes (emissionreduction targets, any emissiontradingschemes. involved inpowerproduction: forthisreason theCompanyisnotsubjecttoanycompulsoryreductions inemissionsorto from theproducers tothedistributors,whothensupplyendusersconnectedtheirnetworks.Terna is in noway Terna isautilitycompanywhosebusinessinvolvesthetransmissionofelectricity, or, inotherwords, transporting electricit Boundary: Group for theorganisation’sactivitiesduetoclimatechange Financial implicationsandotherrisksopportunities EC2 Terna’s taskofmaintainingthebalanceontransmissionnetworkbetweenpowersupplyanddemand,inaccordance • worries aboutclimatechange,oranincrease inenergy rawmaterialpricescouldleadtoa reduction intheflexibilityof • increase the inenergy production from renewable sources, oftenwithincentivesfrom directly-related legislation,means • generalsupportforthedevelopmentofrenewable energy sources generatesrisksandopportunitiesforTerna’s company • only varybyanamountequal to+/-0.5%,compared tothatuseddefinetheannual tariff levels. grid, toarevenue-cap systemwhere thelevelofrevenues isinpractice fixedbeforehand; inthiscase,therevenues can a price-capsystem,where thelevelofrevenues also dependsonthevolumeofelectricitytransportednational revenues fortheperiod2009-2011,onecanstatethatinelectricitytransmissionsectorthere hasbeenachangefrom the remaining partoftheregulation period(2009-2011).Withtheintroduction ofthismechanism guaranteeingthelevelof In fact,theAEEGhasrecently passedresolutions introducing amechanismthatpartiallyneutralisesthevolumeeffect for system usedproduces theserevenues astheproduct ofunitarytariffs multipliedbythevolumeofelectricitytransported. possibility thatareduction involumescouldleadtoasignificantreduction inrevenues forTerna, eventhoughthetariff case, allotherconditionsbeingequal.However, theregulations adoptedsofarbytherelevant Authorityexclude the could actuallyleadtoalowergrowth inelectricitydemand(andtherefore inthetransmissionservice)thaniscurrently the energy demandandan increase inGDP. Thetendencytowards energy savingsandthesearch forgreater energy efficiency due toimprovements initsforecasting; 1.5 millioneuro). During2008theschemegenerated 3millioneuro inbonusesforTerna (themaximumpossibleamount) on thebasisofitsabilitytocorrectly predict windpowerproduction (maximumbonus:3millioneuro; maximumpenalty: incentive scheme,coveringtheperiod2008-2011,hasbeeninoperationsince2008:itawards Terna bonusesorpenalties regulating production systemswhichusewindpower, duetothevariableandsuddenchangesinweatherconditions.An that Terna musthavetechnicalfaciltieswhichcancopewiththenewscenario.Inparticular, there are problems with positive role; the production mix,connectingnewplantsfuelledbyrenewable sources). Terna’s imagemaywellbenefitfrom this consequences intermsofemissionreduction throughout theelectricitysystem(reduction inlosses,improvements in responsibility (seep.111andfollowing),investmentsinthedevelopment oftheelecticitynetworkalsoleadtoimportant requested timescales.Conversely, as isexplainedinthedetailedanalysisfoundchapteronEnvironmental cases canbeextremely long:Terna mayhavesomedifficulty inconnectingnewplantsaccordance withtheproducers’ of over10MWhavetoaskTerna tobeconnectedthetransmissionnetwork.Theauthorisationprocedure insuch (see theresults oftheEuriskosurveypublishedonp.51). Newpowerplantsusingrenewable energy sources withoutputs image, sincepublicopinionexpectsastyleofbusinessmanagementwhichismindfultheeffects ontheenvironment of bolsteringitsimageasareliable operator; accounts buttoitsreputation; conversely, soundmanagementofcriticalsituationsprovides Terna withanopportunity high-profile attentionfrom PublicAuthoritiesandthemassmedia.Criticalsituationsare notathreat toTerna’s company situations leadingtopossibletemporarypowercutsforusersandasaconsequenceTerna maybecomethesubjectof has occurred inrecent years–eitherwhenthere hasbeenadrought oraheatwave.Thelikelihoodisincreasing ofcritical with itsrole inItalyasoperatorofthetransmissionsystem,becomes more difficult inextreme weatherconditions–as y 75 Economic responsibility 76 Sustainability Report 2008 the interest accruedduring theperiod(+3.3millioneuro) andtherelative uses madeofitovertheyear(-12.6millioneuro). attributable toEmployeeSeverance Indemnity(9.9millioneuro). TheEmployeeSeverance Indemnityisalsoaffected by losses, equalto9milllioneuro (0.2millionreferring toAllowancesforWant ofNoticeand 0.7milliontoASEM)andare mainl year (153.4millioneuro asatDecember31,2007).Allocations fortheperiod(11.1millioneuro) includethe figure foractuar The totalamountasatDecember 31,2008standsat153.9millioneuro andissubstantiallyinlinewiththeprevious financial as atDecember31,2008: The tablebelowshowsthebreakdown andmovements in theEmployeeSeveranceIndemnityandotherstaff benefitfunds In particular: companies are eligibleforotherindemnitieswhichare definedbenefits. In Brazilsupplementarypensionschemesare notprovided. Inadditiontopensionschemes,employeesinItalian paying-in system.Inparticular, seniormanagerscansignupfortheFondenelPensionFund( since themiddleof1990s.Terna offers itsemployeesavoluntarysupplementarypensionschemewithdefined system inItaly(whichusedtobeoneofthehighestamongOECDcountries)hasbeenreduced byaseriesofreforms The Terna Group doesnothaveanycompanypensionplanswithdefinedbenefits.Pensioncoverageoffered bythestate Boundary: Group Coverage oftheorganisation’sdefinedbenefitplanobligations EC3 in millionsofeuro Pension Fund( supplementary pensionfund.Otheremployees(workers,office staff andmiddlemanagers)cansignupfortheFopen varies according tothedatemanagerwasfirstemployedandsignedupfor which includescontributionspaidbythemanagersthemselvesandCompany;inbothcaseslevelofcontribution aftertheiremploymentcontracthasfinished,seniormanagersare entitledtoaformofsupplementaryhealthcare (ASEM). • whentheiremploymentcontractisterminatedallemployees are entitledtoreceive EmployeeSeveranceIndemnity(TFR); • theirworkinglifeallemployeescontractuallyreceive during a“loyaltybonus”after25and35yearsofservice withinthe • oa 5. 1168-74153.9 63.5 11.6 -17.4 -3.6 -0.6 51.9 6.8 85.3 2.8 0.2 -3.0 11.1 -13.4 0.7 - 5.1 2.6 3.5 3.8 153.4 7.4 63.6 -0.4 0.7 5.1 12.0 10.2 -0.2 -0.6 74.4 0.2 -0.4 51.6 0.1 84.7 -12.6 0.4 0.2 0.2 - 3.3 0.3 0.2 5.1 9.9 3.6 7.3 5.1 Total 73.8 Total ASEM Energy discount Benefits dueafterterminationofemploymentcontract Total Allowances inlieuandsimilar Additional MonthlySalaries Employee SeveranceIndemnity Benefits dueatterminationofemploymentcontract Total Loyalty bonus Benefits dueduringperiodofemployment (energy discount). In addition,employeeshired priortoJuly1,1996are grantedreduced tariffs forhouseholdelectricityconsumption (workers, office staff andmiddlemanagers)hired priortoJuly25,2001receive AllowanceforAdditionalMonthlySalaries; senior managers,hired orappointedpriortoMarch 1,1999receive AllowanceforWant ofNotice,andallemployees same company; http://www.fondopensionefopen.it ). e.3,20 loain neetcs Utilisationsand Interest cost Allocations Dec. 31,2007 other movements http://fondenel.previnet.it Dec. 31,2008 ial y ) In 2006and2007 thepercentage of Brazilianseniormanagerswas 56%and57%,respectively. reporting directly tohim) stoodateleven,sevenofwhom(63%)were Brazilian. 100%). Thenumberofsenior managersasatDecember31,2008(consistingoftheGeneral Director andthemanagers In Brazil,98%ofemployees –excludingseniormanagementare Brazilian(inthe previous twoyearsthefigure was in 2008).Thesituationwasexactly thesamein2007and2006. embedded intheItalianeconomy andthattheItalianbusinessrepresents thelion’sshare ofthe Group’s revenues (85.7% In Italy, theentire staff –includingseniormanagementare Italian.Thisreflects thefactthatTerna’s roots are deeply Italy andBrazil–reflects ahiringpolicywhichfavoursemployeescomingfrom thelocalcommunities. The make-upofTerna’s personnelandseniormanagementin thetwogeographicalareas where itcurrently operates– Boundary: Group and proportion ofseniormanagementhired from thelocalcommunity Procedures forlocal hiring atsignificantlocationsofoperation EC7 The proportion ofoverallpurchases spentbyeachofthevariousoperationalcentres during2008isshowninthetablebelow: leaders intheirspecificreference markets. industrial groupsinternational withbranchoffices inItaly, suchasABB,Siemens,PrysmianandAreva, whichare world It shouldbenoted,however, thatasignificantproportion ofthefigure spentforlocalpurchases actuallygoestoimportant in theseareas are infactItaliancompanies. specific callsforbids,alsoatEUlevel.Thevastmajorityofcompanieswhichoffer theirservicesandhavegainedapproval Terna SpAmakesmostofitspurchases through groups ofapproved companiesthatsatisfyEUdirectives orthrough maintenance activities. Terna ParticipaçõesusesthosebasedinBrazil.Thisisparticularlytrueregarding theneedtoobtainsupplieslocallyfor purchases are actuallymadethrough nationalsuppliers,i.e.Terna SpAusessuppliersbasedinItalyandthesubsidiary The Group’s purchasing policyexcludestheideaofselectingsuppliersonbasistheirlocation;yet,majority The geographicallocationswhere theTerna Group makesitspurchases are Italyand(foritssubsidiaryTerna Participações)Bra Boundary: Group at significantlocationsofoperation Policy, practicesandproportion ofspendingonlocally-basedsuppliers EC6 % values The mainassumptionsusedintheactuarialestimateofliabilitiesforemployeebenefitsare shownbelow: PROPORTION OF PURCHASESFROMLOCALANDFOREIGNSUPPLIERS(PERCENTAGE OFTHEOVERALLFIGURE) elhcs nraert .%40 3.0% 2.0%-4.0% 3.0%-4.0% 2.0%-5.0% Health costincrease rate Labour costincrease rate Discount rate oeg upir %1.%1 2% 98% 1% 96% 10.9% 89.1% 1% 80% Other Suppliers Foreign Suppliers Local Suppliers

(2) Temporary associationsofcompaniesconsistingItalianandforeign suppliers. (1) Indicatornot-calculatedin2006. (2) 9 %3 0% 3% 0% 19% tl rzlIayBrazil BrazilItaly Italy 2008 .%4.6% 4.8% 2008 2007 (1) 2007 zil. 77 Economic responsibility 78 Sustainability Report 2008 Share performance Relations withshareholders Additional information Participações has helpedtosupporttheshare andtakeitslistedpriceback above2.40euro. the more defensive sectors suchasutilities.Nevertheless,thesigningof agreement forthesaleof66%Terna Since March, renewed trustinaneconomicrecovery hasfavoured arebound inbankingandinsuranceshares, penalising towards highlightingthedefensive nature oftheshare inthe current economicsituation. Company’s StrategicPlanfor theperiod2009-2013.Inparticular, thesustainability ofitsnewstrategictargets contributed the purchase of thehigh-voltagenetworkbelongingtoEnelDistribuzione, newregulations andthepresentation ofthe At thestartof2009,Terna shares benefittedfrom the announcements aboutcertainimportantcompanyevents,suchas Italian stockmarket,theydropped totheirlowestpricefortheyearonDecember17andstoodat2.125euro pershare. Terna shares alsoreversed theirtrend andalthoughtheirperformancewasbetterthantheaverageforshares listedonthe stock markets.Inthisscenario, of theeconomyandglobalfinances,leadingtoasignificant collapseintheinternational Subsequently, theliquiditycrisis inthecredit marketworsenedandcontributedto increase uncertaintyaboutthefuture highest valuefortheyearat2.945euro pershare. led tofallsinworldshare prices.ThesefallsslowedbetweenAprilandMayitwason22thatTerna recorded its During theearlypartof2008there wasanincrease inoilpriceswhichraisedfearsaboutapossibleriseinflationand achieving secondplaceamongtheregulated utilities. among thebestshares intheEuropean sector, makinggainsof23pointsabovetheDJSTOXXUtilities(-38.6%)and weighting ofthecredit sectorwas49.5%down),allowingittoranksecondafterSnamforvalueappreciation. It also ranked Chips indexshowedaplusvalueof34points(S&P/MIB,themosthighlypenalisedinEurope duetothepredominant the yearwithafacevalueof2.335euro pershare. Nevertheless,therelative performancecompared totheItalianBlue During 2008there financialcrisisandTerna wasaseriousinternational shares actuallylost15.3%oftheirvalueandended 1.3 billioneuro, from theinitial3.4billionto4.7billion. indexsuffered adrop ofover30%.There wasanincrease incapitalisationofabout increase invalue,whiletheS&P/MIB From theirinitiallistingontheStockMarket(June2004)toendofDecember2008,Terna SpAshares registered a37% SHARE PERFORMANCE Volumes (mln) Source: Bloomberg. 10 20 30 40 50 60 0 a.1 8Mr 0 8My1,0 u.2,0 c.1 8Dc ,0 e.1,0 Apr. 24,09 Feb.16,09 Dec.9,08 Oct.1,08 Jul.24,08 May16, 08 Mar. 10,08 Jan. 1,08 oue en SPMB DJSTOXX600Utilities S&P/MIB Terna Volumes Dec. 31,2008 100 110 Price 30 40 50 60 70 80 90 (1) Performancecalculated incomparisontotheclosure dateas atApril30,2009. required maintaining therequired levelofquality, butadditionalchecksare alwayscarriedouttoseethatsuppliers alsomeetthe equal opportunitiesandmaximumtransparency. Terna’s aimistomakepurchases atthelowestpossiblepricewhile Purchases are normallymadeonthebasisof on equaltermsregarding totheirqualityandprices. respect humanrightsandare soundonaprofessional andorganisational level,are allowedtocompetewitheachother its CodeofEthics.Allsuppliersthatmeettheconditionsnon-involvementincorruption,complywithsafetystandards, In itsdealingswithsuppliers,Terna placestheutmostimportanceontransparency and fairtreatment, asisindicatedin Relations withsuppliers From December30,2008toApril2009,theTSRwas4.39%(S&P/MIB:-1.04%). was therefore: The totalreturn forashareholder, holdingTerna shares onDecember30,2008(thelastdatethemarketwasopenin2008) shares onthedaterelated couponisdetached. and soldthemondateY. ThiscalculationincludesallthedividendspaidoutbyCompanyandreinvested inTerna The calculationofTSR,therefore, showstheannualrateofreturn foraninvestorwhopurchased Terna shares ondateX share priceoveraspecifiedperiodoftimeandthedividendspershare paidoutinthesameperiod. theoverallreturn oninvestmentfortheshareholder),Return, whichiscalculatedbyaddingtogethertheincrease inthe The mostcomprehensive indicatorofthevaluecreated byanenterpriseforitsshareholders isTSR(Total Shareholder Total Shareholder Return -1.45%,DJSTOXXUtilities-12.13%) S&P/MIB regulated European utilitiesanditsperformancehasbeenaboveaverageforthesectormarket(Terna +4.39%, Since thebeginningofyearTerna hasrankedfourthplaceamongtheDJSTOXXUtilities,first in theelectricitytransmission, telecommunicationsandITsectors.Inlinewith policy guidelines.ThemostimportantsectorsforTerna’s core businessare suppliesandcontracts forworksandservices qualification applies,mustdemonstratethattheymanage ethical,socialandenvironmental affairs inlinewithTerna’s In particular, inorder tobeincludedinTerna’s ListofSuppliers,companiesbelonging tosectorswhere thesupplier Pact” whichcommitsthemjointlywithTerna toavoidpossible clashesofinterest andpracticesthatrestrict competition. and discriminatorybehaviourtowards employees.Since2008,suppliershavealsobeenaskedtosignaspecial“Integrity Organisational Model. Theyalsodrawattentiontothenon-useofchildlabourandblacklabour, theexploitation of workers Procurement contractsgenerallyinclude clausesaboutcommitmentstocomplywithTerna’s CodeofEthicsandits231 approval process. During 2008,about72%oftotal purchase orders issuedbyTerna were madetosupplierswho hadbeenthrough the competitions organised byTerna withintheirrespective product categories. companies thatare deemedsuitable are includedintheListofQualifiedCompaniesand allowedtotakepartin sinceDecember28,2007:-10.30%(S&P/MIB:-46.65%). • sinceIPO:76.65%(S&P/MIB:-16.84%); • ia iied20 08Jn 3Jn 60.095 0.087 0.080 June26 0.0592 0.070 0.056 June21 November27 0.053 June22 June23 May26 0.050 November22 0.045 November24 June18 November23 2008 November19 2008 June19 November24 October21 2007 November20 May23 2007 2006 November21 2006 October18 2005 2005 2004 Interim dividend2008 Final dividend2007 Interim dividend2007 Final dividend2006 Interim dividend2006 Final dividend2005 Interim dividend2005 Final dividend2004 Interim dividend2004

TRENDS INDIVIDENDSDISTRIBUTEDBYTERNASPA (1) Terna hasadoptedapolicyofpayingdividendsontwice-yearlybasis. ethical, socialandenvironmental standards competition procedures 1 . (1) . Year Coupon detachment Payment Dividend (euro) Dividend Payment Coupondetachment Year , whichensure thatallsupplierstakingpartenjoy the supplierqualificationsystem , only 79 Economic responsibility 80 Sustainability Report 2008 companies tohavespecialcertification,suchas: With theaimoffurtherreducing safetyrisksincontract work,Terna alsorequires employeesworkingforcontract excluded from anydiscountsappliedincontractbidsand intheassignmentoftendercontracts. expert.Thisanalysisproducesrisk analysismustbeperformedbyanexternal anestimateofsafetycosts,whichare workers from contractingandsub-contractingcompaniesas regards allactivitiesincludedinon-siteworkprocesses. This the requirementmost importantaspectsconcerns tocarryoutananalyticalassessmentofhealthandsafetyrisksfor on May15,2008,ItalianlegislationbecameoneofthemoststringentinEurope intermsofsafetymeasures. Oneofthe When LegislativeDecree no.81/2008(“ConsolidatedAct regarding healthandsafetyintheworkplace”)cameintoforce and partlyreflects Terna’s particularlycautiousapproach. regarding supplierqualificationandmanagementprocedures. ThispartlydependsonthecharacteristicsofItalianlegislation labouronTernaAs workcontractinginvolvestheuseofexternal constructionsites,themoststringentrulesare qualification Work contracting During 2007,2companieswere struckoff theListofSuppliersand2in2008. cases theymaybestruckoff theListofSuppliers. in linewithapproval requirements, orevensuspendedtemporarilyfrom theymaybewarned theList.Inmore serious sources,or external andnewsitemsinthemassmediaorthrough IT systems.Ifsuppliersfailtomaintainbehaviour external The monitoringprocess includescontinualscreening from anumberofinformationsources, suchasTerna’s Departments acknowledged withduringtheapproval process, forthewholethree yearstheirapproval remains valid. procedures. Thetaskofthisgroup istocheckthatcompaniesmaintainthesamelevelofcompliancetheywere from thePurchasing andContractsDepartmentprovides operativesupportinthecompanyapproval andmonitoring from Chairmanwhohasproven managementandanindependent,external legalandtechnicalexpertise.Aspecialgroup the impositionofanysanctions,ismanagedbyTerna’s The entire companyqualificationprocess, from initialapproval through tomonitoringtheCompany’sactualbehaviourand The followingare includedinthequalificationrequirements: and professional soundnessandcompliancewithTerna’s policyguidelinesonethical,socialandenvironmental matters. The qualificationprocedure allowsTerna toassessthesuitabilityofsupplierswithregard totheirlawfulness,economic The supplierqualificationprocedure is expectedtoreach itsconclusionandwillincludethepublicationofrevision onelectro-mechanical assemblies. requirements forapproval inthecable-laying,tree-cutting andpainting sectorswere finalised.In2009thequ from thecurrent 79%(totalorders in2008)toalmost100%oftheamountspentwork contracting. In2008,thetechnical As regards work contracting in particular, the aim istoin continual improvement withinthepurchasing strategy. The increase inthenumberofproduct sectorsincludedinthesupplier qualificationprocedure isoneoftheobjectivesfor Improvement objectives PROCUREMENT FIGURES(ITALY) attendancecertificatesforspecifictrainingcoursesregarding technical,safetyandenvironmental mattersforthose • Italianlanguagecertificates,sincethisistheusedinsafetynoticesandinformationonconstruction-sites; • existenceofdocumentationcertifyingtheadequacya managementsysteminlinewiththemodellaiddown the • implementationoflegalprovisions the regarding environmental protection andsafetyintheworkplace; • applicationofcontractualandsalaryconditionsthatare the notinferiortothosestipulatedintheCollectiveNational • Suppliers under contract (as at Dec. 31) 1,841 1,841 Suppliers under contract(asatDec.31) 60 Companies qualified(duringthe year) 303 Companies suitedtoSupplier List (asatDec.31) 36 Qualified sectors by selectedtraininginstituteswithSINCERT certification,usingasyllabuslaiddownbyTerna. working onsiteswhere overheadpower linesare beingconstructed.Thecoursesmustlastthirty-twohoursandbeheld ISO 14001standard andtheOHSAS18001standard onhealthandsafety. Labour Agreements forthesametypeofactivity; crease the proportion ofpurch Company QualificationCommittee 2008 ases made throug 535 35 , consistingoftenmembers 7 65 74 ,2 1,696 1,828 6 238 265 072006 2007 h qualified lfcto pr alification companies ocess Terna’s majorcounterpartiesare theelectricitysectoroperators: Relations withtheelectricitysectoroperators system waslaunchedinBrazilandintegratedwiththeTerna SpAplatform. to bringtheirpurchasing procedures graduallyintolinewithTerna SpA’squalitystandards. Inparticularin2008,theSAP During 2007and2008Terna SpAeTerna Participaçõesworkedveryhard together, whichallowedtheBraziliansubsidiaries Brazil specific functionstosupport the dispatchadjustmentprocess aswellthemanagement oftheinterruptabilityservice. Within thescopeofproject whichisexpectedtoreach completionbetween2009-1010, Terna hasimplementedcertain compliance withtheabove-mentioned principles. customers andtoimplement procedures andtoolsinorder toenhancethe customers’ knowledgeandinformationin CRM willalsobetoidentify solutionscapableofautomatingallbusinessprocedures requiring direct contactwith forward applications, managetheirprogress, viewinformationandgainaccesstospecific procedures. Thegoalofthe with communicationsystemsandaimedatdealingcustomer contactsviaawebportal,where thecounterpartscan The mainactivitiesoftheCRMwillincludeidentification andcreation ofmethodsandtechnologiesthatare integrated Relationship Management(CRM) with amarket-orientedimage,Terna launchedaproject during2008whoseobjectiveistheimplementationof In particular, amongitsactivitiesaimedatimproving andoptimisingrelationships withitscounterpartsandproviding itself economic elements,thatare thefoundationsofeconomiccontrol withTerna. operator, suchaspromptness inproviding answers,clarity, andproviding fairness easyaccesstothephysicaland principles ofasystemoperator(transparency, neutralityoftreatment andefficiency) butalsowiththoseofamarket During 2008,Terna continuedwithaseriesofinitiativestoimprove thewayitdealswithitscounterparts,inline the and in2008are worthabout2.6billioneuro. The economicitemsrelating toimbalanceforwithdrawalusers, includingtheinvoicingforsystemcharges are positive users, are negativeandin2008theyare worthabout2.3billioneuro. The economicitemsrelating tosupplyontheMarketforDispatching Services(MDS)andtotheimbalanceforinputsupply negative orpositivedifference orimbalanceinthetechnicaldefinition,related energy issupplied/purchased byTerna. energy marketsandthereal valuesoftheenergy suppliedintoandwithdrawnfrom thenetwork.Infact,ifthere isany economic itemsrelating toimbalance,i.e.thedifference betweentheprogrammes whichtheuserspresented onthe Another aspectthatTerna dealswith,togetherwiththeinputusersofwithdrawalanddispatching,isregulation of parameters, suchasvoltageandfrequency, are atthecorrect levels. system, ensuringthebalancebetweeninputsuppliesandwithdrawaldemandsguaranteeingthatnetwork the economicitemsrelating totheprovision oftheresources required toprotect thesecurityofnationalelectricity Within thescopeofdispatchingservices,inparticular, andtogeth Code itself,inlinewiththestipulatedprocedures. attention totheneedsofoperatorssoasshare andidentify solutionsthatmayalsoleadtoamendmentsintheGrid In additiontofollowingtheprovisions laiddownbythecompetent AuthoritiesandtheGridCode,Terna paysconstant and commercial termsare definedintheGridCode. The dealingsbetweenthesectoroperatorsandTerna are bytheAuthoritiesforsector, mainlygoverned andintechnical WORK ASSIGNMENTPROCEDURESADOPTED(%ONAMOUNTSASSIGNED) • owners ofpartstheelectricitynetwork,towhomTerna owners mustguaranteetherightofconnectionincompliance with • distributioncompanies andownersofproduction facilities,withwhomTerna regulates theenergy transmissionservice • customers,i.e.withdrawalendcustomerswhosupplyTerna interruptable withtheserviceofinterruptabilitytheirown • dispatching users,i.e.producers, endcustomersorwholesalerswhohavebeendelegatedbythelatterandwithwhom • o-uoentnes 34 86 8.6% 85.7% 18.6% 65.0% 13.4% 76.9% 9.7% Ordinances Non-European tenders European tenders on itsownnetwork. load; Terna thedispatchingservice; governs legal andtechnicalprovisions; . er withtheinputusersofdispatching,Terna regulates 2008 64 5.7% 16.4% 072006 2007 Customer 81 Economic responsibility 82 Sustainability Report 2008 TERNA’S CONTRACTUALRELATIONSHIPS WITHELECTRICITYSECTOROPERATORS economic adjustmentisannuallyworthabout0.5billioneuro. The assigneesoftheinterruptabilityservicenumberabout120witharound 3,400MWofpowerandtherelated negative provisions issuedbythesectorialAuthorities. ready inaccordance tohavetheirloadcut,andiscontractuallygoverned withtheconditionsinGridCodeand insufficient. Theloadinterruptabilityserviceissuppliedbyendcustomerswhohavethetechnicalrequirements andare safety ofthenationalelectricitysystemifresources outtobe suppliedonthedispatchservicesmarketturned In 2008,Terna didinfactcontinuetosupplyresources fortheloadinterruptabilityservicesoastoguaranteeoperationa assignees oftheinterruptabilityservicetomonitormore efficiently thequalityofservicesprovided toTerna. sitespecificallyfortheseinterruptablecustomersareThe functionsdevelopedontheinternet aimedatallowingthe Withdrawal usersofdispatching Withdrawal (2) Since January1,2008,thevast majorityofsmallproduction facilities havecomeundertheownershipofGSE.Inaccord (1) Thefigure refers tothenumberofphysicalunitslocatedinItalyDecembereachyear. Dispatching fees Producers Transmission fee Distributors Transmission fee Interruptability Economic nature specified withdrawalsare made. Resolution no.280/07,theconsiderationtotransmissionfeeproducers directly isgoverned betweenTerna andGSEwithregard t (traders andendcustomers ietyt h ainlGi 12 21 21 21 directly totheNationalGrid nldn h igeByr 0 897 98 102 including theSingleBuyer) Input usersofdispatching pouesadtaes 7 470 74 75 (producers and traders) Distributors connected rdcinfclte 7 1,200 75 production facilities nerpil sr 2 3 133 131 120 Interruptible users Entities Owners of Number ofentities 2008 (1) Number ofentities 072006 2007 ance withtheprovisions of (1) (2) Number ofentities o allfacilitieswhere 1,007 (1) l

2008

Environmental responsibility 86 Sustainability Report 2008 For alltheseaspects,Terna iscarryingout national electricitysystem(seep.115-116). for bythe result ofageneralsensitivitytotheproblem ofclimatechange. It shouldthusbestressed thattheinvestmentsprovided gas present insomestationequipment,andcontrolling emissions bymotorvehiclesinthecorporatefleet–isthus Environmental ManagementSystemthatinDecember2007 obtained As forexistinglinesandtheiroperation,Terna’s attentiontoitsactivities’environmental impactisidentifiedwiththe territory ofthepresence ofelectricityinfrastructure. the numberofkilometres oflineseliminatedisoftengreater thanthatofthelinesbuilt,withaneteffect offreeing the other linesectionsmore powerfulorbuilding newlinesorstations:intheseinterventions–called“streamlining” efforts – A particularlyimportantaspectinthissenseare theinterventions to with implicationscurrently more relevant inItaly, where theactivitiestobuild newlinesare astablepartofthecore busin of societyatlarge foruninterrupted,safeandefficient electricityservice.This approach isvalidinbothItalyandBrazil, problems converges withTerna’s interests inmakingitsgriddevelopmentinvestmentsandwiththemore generalinterest also thedepositoriesofauthorisationpowerfornewinfrastructures. Inthisway, considerationofenvironmental central authorities(suchas,forexample,Ministriesandindustryregulation Authorities)andwithlocalinstitutionsthatare Respect fortheenvironment andterritoryisthecredential withwhichTerna intendstoestablisharelationship oftrustwith the AdditionalInformationpart). increasingly detailedaccountuntilthedevelopmentphase(see theparagraph“Concertedplanningwithterritory”in Bodies, etc.)inorder toconsiderenvironmental needsrightfrom theinitialplanningphasesandtotaketheminto been chosenisthatof an approach devotinggreat attentiontotheenvironment andtotheterritory’sneeds.To buildnewlines,theroad thathas characterising manyindustrialisedcountriesandcertainlytheItaliansituation–hasinrecent yearsledTerna todevelop Growing environmental awareness andwidespread localoppositiontothebuildingofnewinfrastructures –atrait and theirinteractionwiththesurrounding naturalandmanmadeenvironment. the useofnaturalresources ortheemissionofpollutants,asitdoesin electricity grid.Therefore, from theenvironmental standpoint,theclearest impactofthisactivitydoesnotliesomuchin Terna’s activityconsistsofsupplyingtheelectricitytransmissionservice,whichisperformedthrough thehigh-voltage environmental sustainability. solutions toguaranteethecountryelectricityitneedsunderbestconditionsofreliability, affordability and For Terna, strikingtherightbalancebetweenpowerrequirements andsafeguarding theterritorymeansseekingappropriate Context, managementapproach, andobjectives adjusting ittothe country’sproductive and consumptionneeds,andfair accesstothegridforindustry operators. is calledupon to guarantee:safe,uninterrupted electricityservice,maintaining theefficiency oftheelectricity system, impact evenbeyondthelimits oflaw, where thisdoesnotcompromise safeguarding the othergeneralinterests thatTerna Terna’s environmental policyexpresses thecommitmenttoadhere topracticescontain andreduce environmental environmental performance indicatorsreported inthischapterandtheadditional “Tables ofindicators”. performance evaluationfora growing numberofindicators.Themainenvironmental datawere madeavailableintheG3 which involveagradualimprovement ofthequalitydataandenableamore accurate spread oftargets andprecise or toemissiontradingschemes.Attentionemissions– which istranslatedaboveallinto greenhouse gasisnotatypicalcorrelative ofitsactivity;theCompanyisin fact notsubjecttoKyotoProtocol constraints Significant aspectsincludegreenhouse gasemissions.SinceTerna doesnotproduce electricity, theemissionof Among the activities andcoveringtheentire transmissiongrid(stations, lines), andalloffices. specialwaste and itselimination. • oflinesonbiodiversity, impact withparticularreference tobirdlife; • visualimpactoflinesandstations; • ofelectricandmagneticfields; emission • Electricity GridDevelopmentPlan significant environmental aspects concerted planningwiththeterritory’sinstitutions monitoring , particularmentionismadeofthefollowing: may haveindirect positiveeffects onthereduction ofemissionsbythe based onthenewprocedures prepared in themanagementsystem, eliminate existinglines ISO 14001certification physical presence ofpowerlinesandstations (Regions, Provinces, Municipalities,Park rendered obsoletebymaking , regarding allofTerna SpA’s controlling leaksofSF ess. 6 , a Environment directorate, whichreports totheoffice ofthegeneralmanager. On theorganisational level,Terna’s environmental andsocialperformanceismanagedunderthecoordination ofthe discharging theirduties. company-wide implementation:allemployees,subcontractors,andpartnersare subjecttothesameguidelinesin and monitoringperiodicre-examination ofperformance indicators.TheEnvironmental ManagementSystemsees and theenvironmental andsocialprogrammes. Thesedocumentscontainactionplans,process managementprocedures, ISO 14001and14031:2004standards. TheSystem is composedoftheenvironmental policy, themanagementmanual, Terna ParticipaçõesSAhasanEnvironmental Management Systemthat,althoughuncertified,wasdevelopedinlinewith Brazil monitoring theenvironmental indicators. A standingworkinggroup oftechnicians,withintheframework oftheEnvironmental ManagementSystem,ischarged with RelationsandCommunications. TheCommittee’ssecretaryExternal isgiventhefunctionofcorporatesocialresponsibility. integrated SafetyEnvironment Qualitymanagementsystem, InstitutionalAffairs, HumanResources andOrganisation and proposed totopmanagement.Participatingdirectorates are OperationsItaly, CompanySecuritywhichoverseesthe Environment andSustainabilitySteeringCommitteetocoordinate activitiesandidentifyprioritiesobjectivestobe In organisational terms,environmental responsibility issubdividedintovarious corporate offices thattakepartinan the environment, andtobasethepreparation ofmitigationtoolsuponscientificpremises. on p.91)andwiththeWWF(seebox99),willmakeitpossibletodevelopguidelinesintroducing powerlinesinto with leadingenvironmentalist associationsonthethemeofbiodiversity, asshownbytheagreement withLIPU(seebox Terna’s commitments on SF As forimprovement programmes, there iscontinuedattentiontoreducing emissionsthrough feasibilitystudiesandprojects planninggriddevelopmentinvestment,listeningtotheneedsexpressed bystakeholders(especiallyterritorialinstitutions), • • in thearea in ofclimatechange,recognising theimportanceofproblem, andundertakingactionstohelpreduce • thearea in ofbiodiversity, makingthecommitment tocontaintheplant’simpact,particularlyonbirdlife, withmitigation • thearea in ofelectromagnetic fields,maintainingstrictcompliancewiththeregulations andattentiontothedevelopments • therelationship in withsuppliers,requesting gradualadjustmenttotheenvironmental standards adoptedbyTerna; • managingandmaintainingthegrid,adoptingprocedures building, inlinewiththeregulations oflawand,where • greenhouse gasemissions. see alsotheIndicatorsEN12andEN14); interventions tobeimplementedalsothrough programmes agreed uponwithenvironmentalist associations(inthisregard, of scientificstudies;contributingtoaproper representation andunderstandingofthephenomenon; possible, withenvironmental impactreduction objectives; and seekingshared solutions; (1) Thefigure (2,986kg)published inthe2007SustainabilityReport wascorrected followingevidence that emerged afterpubli C 0 p ,6 4,461 4,461 PCB >50ppmand PCB >500ppm PCB Concentration

20 07Elimination kgofoil 2007 plan 2008 Elimination ofequipmentcontainingoilswithPCBs of age,andcontainsnoPCB. summarised inthetablebelow. Thedatarefer toItalian plants:theequipmentusedinBrazilislessthantenyears elimination timesandprocedures. Inkeeping withthisprovision, Terna currently hasaneliminationprogramme no. 62/05introduced theobligationofdeclaringquantityPCB-contaminatedoilspossessed,andestablished no. 209/99,CEIregulation 10-38,theguidelinesofMinistryEnvironment, andEuropean CommunityLaw has anextraordinary bioresistance, capableofcausinghazardous effects onlivingorganisms. LegislativeDecree apparatus, sincetheyare toinflammablemineraloils.However, asoundalternative laterstudiesshowedthatPCB Polychlorinated biphenyls(PCB)were usedallovertheworldasinsulatorsintransformers andinotherelectronic 6 leaks, stationelectricityconsumptionandthefleetofcorporatevehicles,whilestartcollaborationprojects ≤ are orientedmainlytowards: 50pm11502762Bytheendof2010,quantity 257,642 131,520 500ppm (1) All eliminatedbytheendof2009 reduced below100,000kg cation. 87 Environmental responsibility 88 Sustainability Report 2008 The dataonBrazil,andconsequentlytheGroup data,are availableonlystarting2008. of theoverallfigure. On thewhole,residual imperfectionsinmonitoringconsumption are notofanature thatwouldcompromise thequality period toanother, whichreflect adifferent datacollection methodandnotachangeincorporateperformance. same overthethree-year periodunderconsideration. Lastly, improved monitoringattimesinvolvesvariationsfrom one power stations.Anyactualvariationsinconsumptionfallwithintheestimateerror, andtherefore thefigure remains the the indirect energy consumptionisestimatedbasedontheavailablemeasurements, whichdonotcoverallofTerna’s and powerstationuse)becausethestartingconsolidateddatacoveronlypartofplant.Inparticular, itisstressed that Management System.Thevaluesreported inthetableare inpartestimated(methaneforheatingandelectricityoffice The databaseofpowerconsumptionisbeingcompletedandimproved, asaneffect ofinclusionintheEnvironmental The tablebelowreports direct andindirect energy consumptionwithreference to2008,2007,and2006. Indirect energy consumptioncoincideswiththeelectricityemployedforoffice andpowerstationuses. At present, Terna’s motorvehiclesandplantsare powered usingnon-renewable energy sources. Electricity transmissionrequires thedirect consumptionofenergy onlyforcertainactivitiessupportingtheproduction cycle: Boundary: Group Direct andindirect energyconsumptionbyprimarysource EN3-EN4 environmental performanceindicators G3 oa Total 540 540,000 3,600 150 150 150 GWh electricity and ofﬁces Powering ofstations Indirect consumption Total 6, 44.8 421 187 148 ton oil Motor vehicles Direct consumption DIRECT ANDINDIRECTENERGYCONSUMPTION-ITALY Heating methane m methane Heating 8,319 43.33 138 172 192 ton gasoil and heating Generators gasoilandmethaneforheating–particularlyofoffices. • gasoilforemergency generators,whichenterserviceonlyintheeventofalackelectricpower–normalsource • forcompanycars(usedpowerlineinspections,repairing fuel failures, andotheractivitiesconnectedinparticular • gsol tn 156 ,5 124 4.367 43.33 1,274 1,551 1,566 ton gasoil nry maueet measurement energy (2) Theavailabilityofmore reliable consumptiondatafor2008(Romeoffices and5outof8territorialoffices, forwhichthe Consumption ingigajoules iscalculatedtakingintoconsideration (1) Suc f Ui f Qatt Quantity Unitof Source of

of powerfortheequipment–toguaranteethatelectricitysystem’snormalfunctionismonitored andrestored; with maintaininglinesandstations); precise estimateofoverallmethaneconsumptiontobemade. different results. 3 tosns (thousands) decimalsnotreported inthetable;multiplyingquant (1) 2008 124 2007 2006 2006 2007 (2) 756 680 39.01 4,837 29,474 26,539 29,474 4,837 39.01 680 756 atr factor Cneso Gigajoules Conversion 540,000 540,000 540,000 540,000 540,000 87,641 112,532 106,545 112,532 87,641 2007figure isavailable)allowedamore ity bytheconversionfactorsmayyield 2008 ,855 67,189 55,182 67,189 ,855 630 8,399 18,862 8,399 630 20 2006 2007 7,470 5,962 7,470 ,000 540,000 ,000 and landscape,includingthefollowing: addition tolocatingthepowerlines,database’smain information regards aspectsofgeology, hydrogeology, nature Development Plan.Thecollecteddatawere homogenisedandinsertedintoanationwidestandard mappingsystem.In exchange protocols aimedattheapplicationofStrategicEnvironmental AssessmenttotheNationalTransmission Grid complete territorialdatabasepopulatedwithdatafrom RegionsandMinistries.Thesedatawere acquired through data the grid’sextensionthroughout thenationalterritory, themaininstrumentforidentifyingcriticallinesections isahighly impact byTerna’s plantonbirdlife, theinteractionbetweenpowerlinesandtheseareas is constantly monitored. Given Since theproximity ofprotected areas, oratanyrateareas ofnatural interest, issoimportantintermsoftherisknegat Boundary: Italy and areas ofhighbiodiversityvalueoutsideprotected areas Location andsizeoflandowned,leased,managedin,oradjacentto,protected areas EN11 As regards Brazil,thewaterconsumedis7,810m³(thefigure refers to100%ofpersonnel). The waterthatisusednormallyoriginatesfrom connectionsto aqueductsforciviluse. was prepared. water usedatTerna Italia’scentralandterritorialoffices, corresponding to98,041m³(thefigure refers to91%ofpersonnel Water isnotpartoftheproduction cycleofelectricitytransmissionanddispatching.During2008,thesystemtosurvey Boundary: Group Total waterwithdrawalbysource EN8 Total 6,44 540,000 3,600 151.79 1.79 150 GWh electricity stations andofﬁces Powering of Indirect consumption Total 6 44.8 201 53 148 ton oil Motor vehicles Direct consumption DIRECT ANDINDIRECTENERGYCONSUMPTION-GROUP2008 Heating methane m methane Heating 8,31 43.33 262 70 192 ton gasoil and heating Generators legislativeconstraintsandadministrativeboundaries. • landscaperiskmap; • Bird Important Areas (IBA); • sitesofcommunityinterest (SIC)andspecialprotection areas (ZPS); • official listofprotected areas, riverparks,naturalreserves, nationallandandmarineparks; • national pollutedsites; • climatedata; • levelofseismicity; • gas oil ton 1,566 134 1,700 43.33 6 43.33 1,700 134 1,566 ton gasoil tl Italy nry maueet measurement energy (1) Consumption ingigajoulesiscalculatedtakingintoconsiderationdecimals notreported inthetable;multiplying quant Suc f Ui f Qatt Quantity Unitof Source of may yielddifferent results. 3 tosns 2 0 14 124 0 124 (thousands) (1) Bai Gop Iay Bai Group Brazil Italy Group Brazil atr factor Cneso Gigajoules Conversion 4,0 ,4 546,444 6,444 540,000 761 1,1 98,854 11,213 87,641 90 ,3 04,837 0 4,837 39.01 ,5 ,0 73,661 5,806 7,855 60 2349,004 2,374 ,630 ity bytheconversionfactors ,3 11,352 3,033 9 546,444 4 ive ), 89 Environmental responsibility 90 Sustainability Report 2008 wetlands ontheterritory, andthepresence ofprotected areas, reserves, andparks. migrating birds (particularlyimportant inItaly, whichisa“bridge” countrybetweenEurope andAfrica),thelocationof depends onthedensityofbirdlife andthefrequency oftransitsnearthelines.Therelevant factors are theroutes of their path.Buthigh-voltage lines maybehazardous particularlyforcollisionrisk.Theactualoccurrence ofcollisions in protected areas andareas ofhighbiodiversityvalue outsideprotected areas Description ofsignificantimpactsactivities,products andservicesonbiodiversity EN12 (approximately 4,400km),sinceitincludesdemolitions oflinesalsobelongingtootherOperators(Enel,RFI,etc.). The figure ispartiallycomparablewiththatregarding theintersectionbetweenTerna’s linesandprotected areas balance ofnewconstructionsanddemolitionsyieldsanapproximately 350kmreduction ofpowerlinesinprotected areas. agreements havebeenformalisedbetweenTerna SpAandthelocaladministrationswithterritorial responsibility, the Considering onlythegriddevelopment,reorganisation, and/orstreamlining interventions,forwhichconcertedplanning as provided forbytheHabitatsDirective no.92/43/EC). system ofprotected naturalareas andonthe2000Nature Network(thenetworkofareas particularlyvaluedforbiodiversity Terna madeanestimateoftheimpactinterventionsprovided forbythe2008DevelopmentPlanonnational the database. high-voltage linesacquired from EnelinApril2009,assoonthegeoreferencing oftheselineshasbeenintegratedinto census thathadbeenperformed.However, theinventorywillberepeated toincludetheapproximately 18,000kmofnew During 2007-2008,there were noconstructions/demolitionsofplantsinprotected areas thatmodifiedtheresult ofthe evolution oftheelectricitygrid’sdevelopmentandboundaryprotected areas. The computerisedmappingsystemmakesitpossibletorepeat theinventoryperiodically, inorder totakeintoaccountthe Italian nationalterritory, againnetofoverlaps. For thesakeofcomparison,itisreported thattheaforementioned protected areas coverasurfaceequalto22.1%of 4,400 km)traversesprotected areas forsectionsthatmayrangefrom afewhundred metres toseveraldozenkilometres. sites ofcommunityinterest, specialprotection areas) andeliminatingoverlaps,11.4%ofTerna’s electricitygrid(about all thetypesofprotected areas definedbyvariousregulations (nationalandregional parks,nationalandregional reserves, of aterritorialnature, present inthedatabase,through accredited GIS(GeographicInformationSystem)tools.Considering (power lines)andtheprotected areas orareas withhighbiodiversity, intersectingthedataonelectricitygridwiththose In 2007,withthedatabase’ssupport,Terna performedaninventoryofthepossibleinterferences betweenitsownstructures of low-andmedium-voltagelines electrocution riskshouldnotaffect Terna’s plant,sinceitislinkedtothereduced spacebetween theconductorstypical On theotherhand,presence ofthelineshaspotentiallynegativeeffects onbiodiversity, and on birds inparticular. The power linesandpylonsaslookoutsovertheterritory, andasstructures fornest-building. predators –birds ofprey –concentratearound theseareas. Birds, andin particularbirds ofprey, infactcommonlyuse grasses andbramble,astheirburrow systemsare notperiodically destroyed byploughingactivities.Andtherodents’ and free ofearthworkandtransformationactivities.Theseare theareas where wildrodents findrefuge inspontaneous particularly thebasisoflarger pylonssupportingthehigh-voltagelines,are theonlyareas spared byintensiveagricultu areas withsinglecereal crops, thepylonsandtheirbasescanbe“islands”concentratingbiodiversity. Pylonbases, increasing thebiodiversityandprotection ofcertainspecies.For example,whenlinestraverselarge openorextended Once thelineisbuilt,there isadualrelationship withbiodiversity. Ontheonehand,line’sroute maybeafactor near orwithinprotected areas. removing residual material.Theinterventiontobuildnewlinesandstationsrequires specialattentionwhentakingplace linked totheworksiteactivities:openingofpassagesgetwhere thepylonsare tobeerected, excavatingtheearth, phase ofbuildingnewlines,andinthatoperatingexistingones.Intheconstructionphase,impactonbiodiversity is relationship withthesurrounding naturalenvironment anditsimpactonbiodiversityare characteriseddifferently inthe In Italy, Terna’s plantsare widespread throughout nationalterritory, withagridextendingabout40,000km.The grid’s Boundary: Group (1) In Italy, In giventhewingspanofbird species,high-voltage powerlinesare notgenerallyheldtobeasource ofelectrocutio (1) delle lineeelettriche sull’avifauna voltage lines,isseen asthemostimportantcauseofaccidental deathofbirds. Thescientificstudy ofreference remains that , WWFItalia,Serie Scientifica no.4,1998. 1 , whichmayleadtotheelectrocution ofthebirds –large onesinparticular–thatcross n riskwhich,onlow-andmedium- byV. Penteriani, L’impatto re control agenciesalready involvedintheauthorisationphase(seeindicatorEN14). of IBAMA( In Brazil,themonitoringofimpactonbiodiversityandprotected areas isconductedjointlywiththefederal bodies “Agreement withLIPU”). From thisstudy, assessmentsontheactualcollisionrisks,andmeasures tomitigatethem,are expected(seebox interaction betweenbirds andhigh-voltagelines. In 2008,Terna signedanagreement withLIPU(theItalianpartnerofBirdLife forascientificstudyonthe International) (Italian leagueforbird protection) - Agreement withLIPU identifyingpossibleinterventionstoreduce thecollisionphenomenon. • highlighting thefactors(logistic,environmental) influencingthelikelihoodofcollision; • assessingthecollision phenomenon,withparticularreference tothemostsignificantspeciesfrom the • proximity ofTerna lines.Thestudy, whichhadasixteen-monthduration,thefollowingchiefobjectives: “special protection areas”) andIBA(ImportantBird Areas), andatthesametimemarkedbypresence or throughout nationalterritorywere identified.Theseare areas classifiedasZPS( Based ontheparticularconcentrationofwildbirds (migration,stopping,reproduction), sevenstudytestareas the twoconductorswiththeirwingsatsametime–aphenomenontypicaloflow-andmedium-voltagegrids. on high-voltagepowerlines.To date,theonlyavailablestudiesinfactregard theelectrocution ofbirds touching opportunity tostudy, forthefirsttimesystematicallyandonanationwide scale,theeffect oftheimpactbirdlife examine theinteractionbetweenbirdlife andhigh-voltagepowerlines.Theproject presents animportant In December2008,Terna andLIPU,BirdLife partnerforItaly, International’s signedanagreement tomore deeply conservation standpoint; TERNA-LIPU AGREEMENTSTUDYAREA 7. 6. 5 4 3. 2. 1 . . Parco NazionaledelloStelvio . Parco NazionaledelGranParadiso Carso Triestino Valli diComacchio Monti dellaTolfa Stretto diMessina Montepulciano ZPS IBA Istituto BrasileirodoMedioAmbienteedosRecursosNaturaisRenovaveis 4 Lega ItalianaProtezioneUccelli 5 7 2 3 ) andwiththeterritory’senvironmental 6 Zone ProtezioneSpeciale 1 , or 91 Environmental responsibility 92 Sustainability Report 2008 with lowenvironmental impact”. For more detailsonlineremovals, seetheparagraph “Streamlining” (p.115)and,foranexample,the box“Lodi:streamlining to buildabout450kmofnew lines,whichwillmakeitpossibletodemolishmore than1,200kmofalready existinglines. bring togethersomeofthemostsignificantinitiativesprovided forbytheElectricityGridDevelopmentPlan,Terna isplannin Line removals playagrowing role inprogrammes for comingyears.Inthe“10projects forsustainabledevelopment”, which impact episodeseveninvolvingyoungerspecimens. (SPEC –SpeciesofEuropean cat.3).Fortheflamingos,linepresented ConservationConcern, acollisionhazard, with site hadbecomeanestingplaceforthepinkflamingo–species considered tobeinanunfavourableconservationstatus Sardinia. Ten pylonslocatedinapondrecognised asaprotected area ofgreat environmental valuewere removed, asthe In 2007,themostimportantinterventionwasremoval of12kmlines(28pylons)inParco Molentargius-Saline in Line removal balance betweenkilometres oflinesdemolishedandthosebuilt. level higherthanexistinglines:itthenbecomespossibleto demolishsectionsoflinealready inexistence,withapositive and madepossiblebythebuildingofnewlines.Thistakesplace,forexample,whenpowerlinehasavoltage environmental recovery are thoseofdismantlingexistinglines,carriedoutwithintheframeworkgridstreamlining efforts Regions andlocalbodiesthatprecede authorisationtobuild newlines.Butthemostimportantinterventionsfor Environmental mitigationandcompensationinterventionsare normallyprovided forasanelementoftheagreements with Italy Boundary: Group Habitats protected orrestored EN13 Birdlife observationtowerintheoasisofMontepulciano numerous speciesofbirds forwinteringandnest-building. African countriestoEurope, inadditiontobeingused by stopping pointforbirdlife initsseasonablemovementsfrom Valleythe Arno totheTiberValley, thusrepresenting amajor placed rightalongthemigrationroute traversingTuscany from Italy’s mostimportantwetlands.Andthenature reserve is Lake Chiusi,Montepulcianoiscurrently oneofCentral transmit real-time imagestotheVisitors’ Centre. Alongwith Thanks totheirfibre opticcables,thevideocamerasattop out environmental andbiodiversitymonitoringactivities. nature reserve. Itwillalsobeextremely valuableforcarrying countryside, offering aprivilegedvantagepointovertheentire to extendtheirgazeovertheentire lakeandsurrounding scholars andresearchers. Theformerpylonwillallowvisitors students, andasmallerstationatthetop,accessibleto 10 metres up,designedforgroups ofvisitorsandelementary structure 25metres tall,withalarge teachingplatformabout endofthelake,observationtowerisa north-western Siena, whichmanagestheprotected area. Locatedatthe observations andmadeavailablebyTerna totheProvince of using anout-of-servicepylon,appropriately modifiedfornature has anewbirdlife observationtower. Thestationwasbuilt Thanks toTerna, RiservaNaturaledelLagodiMontepulciano g Moreover, inthenewlines the process ofplanningthenewlinestobebuilt. which, amongotherthings,callsforintegratingenvironmental criteriainlinewiththeWWF’sconservationstrategy into In 2008,thisapproach foundconfirmationintheProtocol ofunderstandingsignedbyTerna withtheWWF(seebox), are carefully studied.Theinformationthatiscollectedbecomes partofthecriteriafordeterminingfinalpath. planning ofthegrid’sdevelopment.Thebiodiversityfeatures oftheareas potentiallydestinedtohousenewinfrastructure variables, biodiversity, andinparticular thepresence ofprotected areas, istherefore aninputforasustainability-oriented solutions, shared withlocaladministration,fortheplacementofelectricityinfrastructure. Asmuchasotherenvironmental interventions, Terna takesintoconsiderationtheneedtopreserve theenvironment and landscapebysearching for Terna’s approach toprotecting biodiversityisaboveallpreventive. Rightfrom the Italy Boundary: Group Strategies, current actions andfuture plansformanagingimpactsonbiodiversity EN14 In 2008,thefollowingenvironmental offsets carried outbythesubsidiariesinBrazilmaybehighlighted: total costsprovided forcarryingouttheworks. sustain theimplementationofconservationmeasures, through theconferralofresources equaltoatleast0.5%ofthe establish anobligationforallcompaniesthatcausesignificantenvironmental impact.Thesecompaniesare required to The federalregulations theconcessionsofpublicservices(Lawno.9985/2000andDecree thatgovern no.4340/2002) Brazil metres square, goingdowntoaboutonemetre indepth. special waste.Onthewhole,operationclosedwithcompleterestoration ofsoilconditionsforanarea of50,000 45,000 tonsoflandwere removed andbrought toauthoriseddumps;giventhehydrocarbon content,itisclassifiedas polluted sites,Terna firstcarriedoutcareful studiesofthearea todeterminethedegree andnature ofthepollution.Then, location byotherindustrialcompanies.Byrigorously applyingtheregulations oflaw, whichrequire thereclamation of reclamation. Theland,ideallyplacedasaSAPEIterminalsite,waspollutedbyactivitiescarriedoutearlierinthesame The buildingofthepowerstationconvertingSAPEIsubmarinecableinFiumesanto,Sardinia, involvedamajorland Reclaimed land plantingnativespeciesofgrass,distributedalong withnaturalbinder • reforestation, through theplantingofnative shrubandtree speciesbelongingtothearea’s vegetation; • environmental restorations, consisting oftheperformancenaturalengineeringworkscapable ofregulating thesurface • ETEO: anarea of68.44hectares recovered through theplantingof116,348 nativespeciesoftrees attheAssisnature • • TSN: forthesoutheast/northeastinterconnection TSN: line,IBAMAapproved theamount of6,611,352reais, corresponding • ETAU: aninvestmentof654,900reais wasmade; • Novatrans:6,042,000reais paidtoIBAMA,beusedatthenature reserves of:Gurupi,SerraGeraldoTocantins, • not belongtothe environment; of nativespecies prevents theoccurrence ofphenomenafloralpollutionthrough theintroduction ofspeciesthatdo outflow ofprecipitation waterand therefore controlling thephenomenonofsoilerosion; protection area ofthestateEstadualdoPousoAlto,Lavapésregional park. to 1%oftheriskvalue,beappliedconservationunits:ChapadadaDiamantinanationalpark,environmental Descoberto, Parque NacionaldoItatiaia; nationalpark,ParqueNascente doRioParnaíba NacionalChapadadosVeadeiros, Parque EcológicoeVivencial do reserve inthestateofSãoPaulo; national marinepark. For theGoianinha-Mussurétransmissionline,IBAMAapproved theamountof105,850reais deNoronha fortheFernando IDEMA units. to purchase equipment,furniture, andapick-uptypecarforadministrationtheconservationdepartmentof of thestateRioGrandedoNorte,approved theamount ofUS$177,707–0.73%thevalueinvestmentmade For theSantaCruz-ParaísoAçuLV transmissionline,IDEMA,Insititutefortheeconomic andenvironmental development environmental protection area. the region ofBahia,approved theamountofUS$222,000,tobeusedatconservationunits:JoanesIpatinga For theCamaçariII-Sapeaçutransmissionline,Centro deRecursos Ambientais,anenvironmental protection bodyin building phase , Terna adoptssomemitigationand compensationmeasures, suchas: s andfertilizers,helpingthem totakeroot. Theuse planning phase of newdevelopment 93 Environmental responsibility 94 Sustainability Report 2008 and itspassagewithinSantuariodeiCetacei,amarinepark (seeboxonp.96). between thesubmarinecableandbiodiversity, withreference toprotecting thePosidoniacolonieson thecable’spath system. SAPEIwasdesignedandbuiltwithspecialattention totheenvironment, includingastudyoftheinteraction Italian peninsula,andoneofthemostimportantstrategic worksplannedbyTerna tostrengthen thenationalelectricity Attention tobiodiversityalsomarkedthedesignofSAPEI, the submarinedirect current cablethatwilllinkSardinia tothe mounted onTerna’s pylonsintheProvince ofRome. of thevaluesrecorded inthepast,anditisestimatedthatatleast650youngfalconshavetakenflightfrom theboxes size andlayingdate,evaluatereproductive success.Thelayingandhatchingdatacollectedare inlinewiththeaverage reproductive data.Thenestswere inspectedstartingfrom mid-March, inorder toverifytheiroccupation,determinebrood boxes were alsomonitored inthe2008reproductive season,toverifytheiroccupationbykestrels andtocollect effect in termsofbiodiversity, represented bytheincreased population ofkestrels residing inthearea. Thepylon-mounted boxes alsomadeitpossibletocollectaconsiderableamountofbiologicalandbehaviouraldatafindpositive seen theinstallationofmore than300boxessuitable forbirds ofprey tobuildtheirnests.Constantmonitoringofthe Italica,underwhichrecent associationOrnis yearshave “nests onpylons”initiativeincollaborationwiththeornithological height andalsobecauseoftheprotection from predators theyafford. Againin2008,Terna maintainedsupportforthe how powerlinescanserveasvantagepointsforbirds ofprey onthehunt;theyrest onthesupportsbecauseoftheir In particular, theseincludeplacingboxesforbirds ofprey tobuildnestsonpylons.Numerous studies have castlighton For sometime,Terna hasalsobeencommittedtotrialling in order tomitigatetheeffects onnaturalhabitats. The workinggroup’s activitiesare aimedatpreparing guidelinesthatcanbeofsupportintheinfrastructure design phase, Terna joinedtheworkinggroup withacontributionaimed at capitalisingon: identifying ecologicalconnectionareas. ecosystems duetotheintroduction ofinfrastructures, andatdefiningaGIS(GeographicInformationSystem)methodfor and oflineinfrastructures”. Thedocumentisaimedatidentifying themitigationsofenvironmental impactson The group’s activitiesledtoaReportpublishedinMarch 2009,on“Protecting theecologicalconnectivityofterritory attention toimpactonecosystems. institutions –inaworkinggroup establishedontheissueofintroducing lineinfrastructure intotheterritory, withparticul along withtheleadinginfrastructure concessionaires, organisations protecting thelandscapeandbiodiversity, andother Again in2008,Terna wasinvitedbyISPRA(IstitutoSuperiore perlaRicerca elaProtezione Ambientale)totakepart– and mitigationtechniques(seeboxonp.91),ifnecessary, toberefined. and high-voltagepowerlines.Theresult ofthestudywillallowanobjectiveassessmentphenomenontobemade, In 2008,Terna signedanagreement withLIPUfortheperformanceofscientificsurveysoninteractionbetweenbirdlife environmentalist associations. lines more easilyperceptible tobirds inflight.Inanumberofcases,theinstallationdissuadershasbeenurged by of specialdevicescalled“dissuaders”which,withthebulkandnoisegeneratedwhenblownbywind,makepower between linesandbirdlife. Themostproven systemistheinstallation,inlinesectionscharacterisedbyfrequent bird transit As regards the • interventions tomitigateanyresidual interventions impactsbytheworksonanimalandplantlife. • approach the adopted forthelocationofnewdevelopmentinterventions,illustratingitsexperienceinintegrating • compensation:forest cuttingalongthelinesbeingdesignedisoffset bytheplantingofindividualtrees belongingtothe • environmental andterritorialconstraintsintothebuilding ofnewinfrastructure; same species,overequivalentarea. lines already inexistence , Terna hastrialledmitigationsystemsregarding inparticulartheinterference alternative usesofpowerlinestothebenefitbiodiversity alternative ar , .

96 Sustainability Report 2008 abilitytofacetheremoval from service,expectedincomingyears,ofthecurrent 200kVdirect current connection • opportunityforSardinia’s electricityoperatorstotakepartin marketnegotiationswithfewerexchange • possibilityofexportingtothemainlandmore efficient thermoelectricproduction (1/3ofthepowerplantsare coal- • increased safetyofSardinia’s electricitysystem(SAPEI’s1,000MWcorrespond tomore than50%oftheisland’sneeds); • The workhasmanybenefits,includinginparticular: switching stationhavebeencompleted;thoseforthesecondpoleare beingcompleted. stations are inanadvancedstateofprogress. Thetwoelectromechanical assembliesofthefirstpoleLatina The voltagetestswere successfullyperformedinlateNovember2008.ThetwoLatinaandFiumesantoswitching of investmentwascarriedout.Thefirstthetwocables(440km,420kmwhichsubmarinecable)laid. geotechnical surveysontheseafloor. In to becompletedinlate2010.Author deepest beneaththesea.Theinaugurationoffirstcableisexpectedbefore theendof2009,withsecond will betheworld’ssecondlongestconnectionaftercablebetweenHollandandNorway, andtheoneplaced system. ThenewpowerlinewilllinkSardinia totheItalianmainlandwithadouble500kVDCsubmarinecable.It The SAPEIisoneofthemostimportantstrategicworksplannedbyTerna tostrengthen thenationalelectricity The newlinkbetweenSardinia andtheItalianmainland(SAPEI) the Nettunolanding–Cymodocea nodosa. In additiontoPosidonia,Terna hastakenintoconsideration anotherimportantseaspeciespresent atthesiteof numerous organisms, bothplantand animal,whichmakesitoneoftheenvironments ofgreatest ecological diversity. a priorityforconservingnatural habitats,aswellwildfloraandfauna.Itrepresents avastarea ofcolonisationfor Posidonia oceanicaisaspeciesofseagrassfundamentalto thecoastalmarineecosystem,havingbeendefinedas Posidonia andCymodocea 35,000 7,000 5,000 1,600 1,000 500 420 90 70 50 22 12 2 SAPEI: thenumbers allowed theoptimalroute tobeprecisely defined,providing elementsindispensableforpredicting impacts. picture ofthephysical,chemicalandbiologicalenvironment withinwhichtheSAPEIisbeingdeveloped.Thestudies A setofin-depthstudiescarriedoutpriortothestart worksmadeitpossibletoprepare acomprehensive area, andthepresence ofCymodoceanodosaattheNettunolanding. characteristics, suchasthePosidoniaoceanicaecosystems inSardinia, theSantuariodeiCetaceiprotected marine Along thepath,cableencountersavarietymarineecosystems thatpresent different features andunique 700,000,000 50,000 48,000 more than40 years. between Sardinia, CorsicaandItaly(SACOI),duetotheobsolescence ofthecablethathasbeeninoperationfor constraints, whileatthesametimeguaranteeingsystem’sgreater flexibilityandoperatingsecurity; fired) andespeciallyproduction from renewable sources, particularlywind,whichisseeingstrong development; m tonnage ofthecable-layingvessel project documents maximum layingdepth MW ofpower 500 kVofvoltageDC 420 kminlength total resources involved intheproject technical andenvironmental regulations tons ofbollard pullofthecable-layingvessel meters inheightoftheswitchingstations centimetres ofcablediameter submarine cables,landswitchingstations investments planned,ineuro m m 3 2 2 of landremoved of thearea oftheFiumesanto(SS)station of thearea oftheLatinastation ised inonly12months,worksbeganOctober2006,withgeophysicaland 2008, inkeepingwiththescheduleddeadlines,more than58%ofthetotal elements pointingtopossibleacousticaldisturbancecaused bythepassageofcurrent through submarinecables. Studies haveshownthework’scompletecompatibilitywith theprotected marinearea, indicatingthatthere are no island ofTasmania, aswellonSACOI’soperativeexperience. experienceslikeBasslink,theDClinkbetweenStateofVictoriasuccessful international inAustraliaandthe The marinearea hosts190kmofthecable.Thisiswhy, duringthedesignphase, Terna relied ontheresults of stocking upandreproducing. common bottlenosedolphins,stripedRisso’sdolphin, andmanyotherspeciesfindidealconditionsfor is hometothemostimportantmarinefaunainentire basin:inthesewaters,bluewhales,sperm removal. in thepark;particular, onlythree trees willbecutdown,asopposed tothe53thathadbeenauthorisedfor The landportionoftheSAPEI cabletraversesParco delFoglino.Environmental requalifications have beenplanned Parco delFoglino Santuario deiCetaceiisaprotected marinearea covering about100,000km Santuario deiCetacei Impacts duringtheplacementworkswere monitored, andwillbemonitored through 2011. the prairie’senvironmental status. openings intheprairie,toprevent erosion processes, andtomakesure thatthecable’spresence doesnotalter the substrate,andspecialanchoringdeviceswere usedsoasnottoharmplantlife.Thepurposeisavoidcreating protect areas asmuchpossible.Intheseareas, thecablewaslaidonseafloorwithouthavingtodiginto To safeguard theseecosystems,specificinvestigationshavebeencarriedout,androutes havebeenselectedto 2 . ThisportionoftheMediterranean 97 Environmental responsibility 98 Sustainability Report 2008 The methodadoptedbytheGroup alsoincludesprogrammes for: also takepartintheenvironmental authorisationprocess. The BrazilianNationalIndianFoundation(FUNAI)andtheInstituteforHistoricArchaeological Heritage(IPHAN) monitoring agenciesinvolved. the BrazilianInstituteforenvironment andrenewable naturalresources (IBAMA)andtheterritorialenvironmental The maininstitutionsinvolvedintheprocess through whichtheenvironmental licensesandauthorisationsare issuedare authorisation: The placement,buildingandintroduction intoserviceofnewinfrastructures requires theissuanceofthree levelsof In Brazil,theprotection ofbiodiversityisstrongly supportedattheregulatory level. Brazil recovering degradedareas. • providing environmental communicationandeducation; • maintaining accessroads totheinfrastructure, andtheserviceareas; • operatinglicense:thisauthorisationisissuedfollowingthe verificationsmadebythebodiesincharge an oncetheplant • • an installationlicence:toproceed an withconstructionworks;thisauthorisationdependsontheevaluationbyauthorities • preliminary a licence:issuedintheactivitiesplanningphase,itregards thefundamentalrequirements andprescriptions • has beencompletedand,inthecaseofapositiveoutcome,allowscommercial operationstobegin. authorised; measures tomitigateandmonitorplansprogrammes fortheconstructionandmanagementofproject being in charge oftheenvironmental managementplan( use plans; that mustbemetinselectingthesiteandworkinstallationphasesharmonywithfederalorregional territory Birdcam Project many ofwhichfrom foreign countries. of thechicksperegrine falconcouple.Theforumwasalsowellfrequented, receiving about40,000messages, The activitiesinthe2008seasonbeganFebruarywhencameraswere switchedoninthenestofAriaand period (onlineat calling fortheinstallationofvideocamerastraineduponartificialnests:ideaistomonitorbirds’ reproductive Again in2008,Terna sponsored theBirdcam Italica, project associationOrnis incollaborationwiththeornithological www.birdcam.it and onTerna’s website). Plano BásicoAmbiental ) presented bythecompanies:itmustcontain the kestrels’ eggsandthefledging month ofMay, withthehatching of number ofhitswasrecorded inthe better than2006.Themaximum figure for2007,andfourtimes individual accesses)–doublingthe more than1,800,000hits(250,000 operations, During theperiodofwebcam’s season” untilthefirstweekofJuly. possible toextendthe“camera falcons nestedlate,thismadeit was alsoactivated.Althoughthese of kestrels nestingonaTerna pylon, recording AriannaandBacco,apair In thefirstweekofJune,camera takingflightinlateMay.born, From thisnest,twofalconswere University ofRome“LaSapienza”. nesting onthebuildingat Vento, thepairofperegrine falcons www.birdcam.it saw Signign theTerna-WWF agreement. Terna CEOFlavioCattaneoatleft,withWWFPresident EnzoVenini. Agreement withWWF biodiversity risk,tobeidentifiedatalatertimebyTerna andWWF. Moreover, environmental recovery projects willbecarriedoutanddefinedstartingfrom twoareas atparticular todefine,inashared way, aspecificplanofactionsforthesustainabilitygrid’sdevelopmentinWWF • toharmonisethegrid’sdevelopmentwithWWF’sEcoregional conservationstrategy; • increase to andmonitorthelevelofintegrationenvironmental criteriawithintheprocess fortheintegrated • of thecollaborationare: reference toplanningtheelectricitygridandminimisingimpactinsomeWWFoases.Inparticular, theobjectives the conservationstrategypromoted bytheWWF. Thethree-year agreement callsforaseriesofinitiatives,with criteria intothephaseofplanningelectricitygrid’sdevelopment,andtobringthisactivityharmonywith protecting biodiversity. Themainobjectiveoftheagreement istoachievegreater integrationofenvironmental the electricitygrid,withparticularregard toreducing theenvironmental impactoflarge transmissionlinesand In January2009,Terna andtheWWFsignedaprotocol ofunderstandingaimedatasustainabledevelopment interventions. on species,ecosystemsandecologicalprocesses: there willalsobeasubsequentdefinitionofmitigation Vision fortheAlpsandCentralMediterraneanEcoregions. Alsoassessedwillbetheimpactofelectricitygrid oases. BiodiversitymonitoringwillbeactivatedinWWFoasesandthepriorityareas identifiedbyBiodiversity planning ofthetransmissiongrid’sdevelopment; 99 Environmental responsibility 100 Sustainability Report 2008 The followingtableshowsanestimateoftheCO i o oo eilstn18174145521,306 582 441 445 4,084 553 4,973 628 5,118 421 187 138 1,274 1,551 148 172 1,566 192 ton ton m ton Methane forheating Gas oilforgeneratorsandheating Gas oilformotorvehicles Oil formotorvehicles Direct emissions DIRECT ANDINDIRECTCO Greenhouse emissionsconnectedwithTerna’s activitiesderivefrom: Boundary: Group Total direct orindirect greenhouse gasemissionsbyweight EN16 oa ieteisostn8,6 79644,778 57,926 87,961 ton Electricity Indirect emissions Total direct emissions process toimprove themonitoringofenergy consumptiondatabases. Protocol’s terms,thetableincludesScope1and2emissions.RefertoindicatorEN3-4foracommenton jointly withtheWorld Resources Institute(TheGHGProtocol. ACorporateAccountingandReportingStandard). Inthe The calculationofemissionsfollowstheguidelinespublishedbyWorld BusinessCouncilforSustainableDevelopment SF leaksofSF • indirect consumptionofenergy sources (electricityconsumption); • direct consumptionofenergy sources (oilandgasoilforvehicles,heatinggenerators,methaneheating); • (1) The dataonSF (2) For 2008,theconversionofelectricityconsumptionintoCO deposited intheoilcollectiontankbelowandwaslatercleaned.Afteraccident,totalSF allowed anenormousamountofgastoescape:thereloaded gaswas1.1tons.Partofthedisperseddecomposedbyc totally absentindomesticproduction. statistical data.Importsare likenedtoItalianproduction; thisresults inanoverestimation ofemissions,sinceimportedene the totalofItalianelectricityoutput(2007statisticaldata)andmixfuelsusedforthisproduction. For2007and200 emissions equalling55,209tons. 6 ek o 3.410 ton leaks (2) 6 (sulfur hexafluoride),agreenhouse gasemployedinstationequipmentduetoitshighinsulatingpower. 6 gas emissionsin2008includetheleaksconnectedwithanaccidentthatoccurred attheTavernuzze (Florence) powerstation,wh 2 EMISSIONS -ITALY 3 tosns 2 5 8 7 ,5 1,448 1,652 271 680 756 124 (thousands) measurement nto Qatt Tons ofCO Quantity Unit of W 5 5 5 9707,5 71,250 71,250 69,750 150 150 150 GWh 2 emissions thatmaybeattributeddirectly orindirectly toTerna’s activities. 2 emissions wascalculatedtakingintoaccounttheweightofthermoelectricproduction on 2008 (1) .9 .6 1495,6 37,499 50,166 81,499 1.569 2.099 072006 2007 6 emissions standsat2.3tons,withcorresponding CO 2008 rgy ismainlynuclear, asource 6, thereference isto2005 072006 2007 2 equivalent ombustion. It ich 2 oa msin o 5,1 ,8 159,396 1,686 157,711 70,616 866 88,780 69,750 819 87,961 610 853 165 5,548 ton 225 445 430 628 5,118 201 ton 1,700 262 53 134 ton 70 Total 148 emissions 1,566 Total indirect emissions 192 Electricity ton ton m Indirect emissions ton Total direct emissions Methane forheating Gas oilforgeneratorsandheating Gas oilformotorvehicles Oil formotorvehicles Direct emissions DIRECT ANDINDIRECTCO SF (Florence) powerstation,whichallowedgastoescape.After theaccident,increase inSF 2008 istoalarge extentduetothegrowing reliance onpowerstationequipmentthatemploysSF amounts ofSF (0.73%) withearlieryears(0.69%in2007),notcountingthe leaksrecorded intheTavernuzze incident.Fordataonthe parameter Terna lookstowhenmeasuring itsperformanceinthisfield–althoughreaching 1.07%in2008,wasline tons (+15.1%). The datashowthatthemainsources ofCO The SF greater safetyintheeventofmalfunction.From 2006to2008,theamountofSF instead ofoil.Thechoicegas-insulatedequipmentresponds tocriteriaofsizeandvisualencumbrance,aswell The dataonSF emissions between2006and2008. decreasing order: • fuel usedforcorporatemotorvehicles. fuel • electricityconsumption (indirect emissions); • •SF (2) For2008,theconversionofelectricityconsumptionintoCO (1) The dataonSF of Italianelectricityoutput(2007statisticaldata)andthemixfuelsusedforthisproduction. Theconversionfactoris0 ton CO domestic production. ForBrazil,the2008conversionfactorpublishedonwebsiteofBrazil’sMinistéro deCienciaseTecnol are likenedtoItalianproduction; thisentailsanoverestimation ofemissions,sincetheimportedenergy ismainlynuclear, a emissions equalling55,209tons. deposited intheoilcollectiontankbelow, andwaslatercleaned.Aftertheincident,totalSF allowed anenormousamountofgastoescape:thereloaded gaswas1.1tons.Partofthedisperseddecomposedbyc 6 ek o 3.4 ton leaks 6 leaks; 6 2 leaks are themaindirect source ofTerna’s greenhouse gasemissions,andtheleadingcauseforincrease in /MWh, wasused. (2) 6 6 6 The incidenceoftheleaksasapercentage ofthe gaspresent intheoperatingequipment gas emissionsin2008includetheleaksconnectedwithanincidentthatoccurred attheTavernuzze (Florence) powerstation,wh gas used,seetheTables ofindicators;fortheleakcontainmentprogrammes, seetheindicatorEN18. gas emissionsin2008includestheleaksconnectedwithanaccidentthatoccurred attheTavernuzze 2 EMISSIONS -GROUP2008 3 tosns 2 2 7 271 0 271 124 0 124 (thousands) measurement nto Qatt Tons ofCO Quantity Unit of W 5 . 5. 9708670,616 866 69,750 151.8 1.8 150 GWh 2 emissions attributabledirectly andindirectly toTerna’s activities are, in 2 emissions isdonetakingintoaccounttheweightofthermoelectricproduction onthetotal tyBai ru tl rzlGroup Brazil Italy Group Brazil Itay (1) . 149081,499 0 81,499 3.4 0 6 emissions standsat2.3tons,withcorresponding CO 6 present inTerna’s systemsgrew by48 6 .465 tonsofCO leaks between2006and ogia-MCT, equalto0.484 6 source totallyabsentin gas asinsulation 2 equivalent 2 ombustion and /MWh. Imports – the ich 2 101 Environmental responsibility 102 Sustainability Report 2008 tendency toreduce emissionsthatgreatly exceeds gridlosses. minimising losses.Itshouldalso benotedthattheenergy marketimplicitlyfavoursmore efficient production: thisentailsa productive arrangements determined bytheenergy market.Terna cannotinterfere withthese evenforthepurposeof grid safetyandavoidoutages. Theseoperationsoccur, inaccordance withregulated criteria,withintheframeworkof Dispatching operationsare necessary toguaranteetheconstant control. To explainthispoint,itisuseful todistinguishbetweendispatchingoperationsandgrid developmentactivities. However, itmustbespecifiedthatTerna canonlydefinethesizeoflosses,sincetheyare notcompletelyunderits connected withTerna’s activity. that theamountofemissionsassociatedwithgridlossesis muchgreater thantheotheremissions–direct andindirect – the purposesofaggregate measurement ofNational Transmission Gridlosses.Estimates andmeasurements show officially inuse,initialresults oftheremote measurement confirmthevalidityofestimatesmade,and theirreliability measurement ofwithdrawals(inputshavealready beenmeasured) from theNationalTransmission Grid.Althoughstillnot As discussedintheparagraph“Servicecontinuityandquality”, Terna has,inagreement withitsdistributors,initiateddirect These valuesare reported onthebasisof2008pre-consumption data. on theseestimates,theCO by corona effect inproportion tovoltageandbyjouleeffect inproportion tothecurrent, lossesonthetransformers).Based a typicalconfigurationoftransitselectricityonthetransmissiongrid,andtechnicalcoefficients (lossesonthelines At present, thedistinctionbetweenlossesattributabletotransmission anddistributionrespectively isestimatedbasedon consumption, andinverselyproportional tovoltagelevels. and are directly proportional tothetransportedcurrent andtothedistancebetweenpointsofgeneration losses are anaspectthatcannotbeeliminated:theydepend on thepowerlines’resistance tothepassageofelectricity, and finalconsumption;Terna’s lossesare thoseassociatedwiththetransmissiongrid.From thetechnicalstandpoint, Particularly significantamongtheseare activity. Theycorrespond to: Besides emissionsrelated toelectricityconsumption,there are otherindirect emissionsthatmaybelinkedtoTerna’s Boundary: Italy Other relevant indirect greenhouse gasemissionsby weight EN17 consumptionofrefrigerant gases. • airtravel; employees’ • losses; grid • •CO losses:4,457GWh, grid • Carbon Disclosure Project 2008 gas present insomepowerstationequipment. performance target referring tooperationalaspectsoftheircore business:controlling leaksofSF Terna isamongthesevencompaniesthathavedevelopedanemissionscontainmentstrategy, havingsetaspecific companies intheS&P/MIB40.Thesurveyshowshighlyrapidevolutionhowclimatechangesare perceived. major corporationswere involvedintheproject. Forthefirsttime,aCDPItalyReportwaspublished,focusingon their abilitytomanagerisksandopportunitiesconnectedwithclimatechange.Inthe2008edition,about3,000 a totalofmore than55trillionUSdollars),theCDPmonitorscompanies’energy policiesandperformance, change. Onbehalfofnumerous institutionalsignatoryinvestors(large banksandfinancialintermediaries,managing with whichtheworld’sleadingcorporationsintermsofmarketcapitalisationrespond tothechallengeofclimate the CarbonDisclosure Project initiativewhoseobjectiveistoregularly (CDP)isaninternational assessthestrategies electricity transmissionisnotsubjecttoKyotoconstraintsoremissionstradingschemes.Launchedin2000, Only sevenofthesecompanieshaveworkedoutanemissionscontainmentstrategy. OneofthemisTerna, although projectthe international thatasksleadingbusinessestotransparently disclosetheirgreenhouse gasemissions. Out offortyItaliancompaniesintheS&P/MIB,eighteenhavetakenpartCarbonDisclosure Project 2008, 2 equivalent emissions:2,072,505tons. 2 emissions associatedwithgridlossesare asfollows: grid losses , definedasthedifference betweentheenergy introduced byproducers balance betweengridinputsand withdrawals,tomaintain 6 , agreenhouse for gas canbedoneuntilnolaterthanDecember31,2010. no. 2037/2000,underarticle5,paragraphV; insystemswhere therefrigerant R22iscurrently used,toppingupwithvirgin The refrigerant R22isahydrochlorofluorocarbon bytheregulation (HCFC).Inexistingsystems,itsuseisgoverned (EC) consumption dataare notyetavailable;forthemoment, onlytheinformationonamountofgasinstalledisprovided. The the table. In 2008,forthefirsttime,emissionsfrom true bothintermsoftheabsoluteamountloss,andlosses’incidenceontotalenergy consumed. operator’s control: otherfactorscanmore thanoffset theincreased efficiency derivedfrom thegrid’sdevelopment.Thisis by Terna. Theoveralleffect ofgriddevelopmentactionsonlossescannotbepredetermined, norisitunderthetransmission Moreover, thegrid’sverydevelopmentisinpartdictatedbyneedtoconnectnewplants,whoselocationnotdecided losses. However, thegrid’sdevelopmentallowspreviously impossibleproductive arrangementsandgrowth inconsumption. Production arrangementsbeingequal,griddevelopmentactivitieswoulddeterminegreater efficiency, andthusreduced oa ,5,0 1,589.4 230.9 1,090.0 268.5 6,252,503 3,793,592 1,152,414 1,306,497 Total Intercontinental (Europe) International Domestic Type offlight Total Others R410A R407C R22 Description INDIRECT CO REFRIGERANT GASESPRESENTINTERNASPA’S SYSTEMS -2008 (1) Datarefer toabout77%ofTerna’s sitesand90%ofpersonnel. refrigerant gases 2 EMISSIONS FROMEMPLOYEEAIRTRAVEL -2008 in Terna SpAairconditioningsystemswere alsosurveyedforthefirsttimein2008.Yearly air travel by Terna SpAemployeeswere calculated.Thedataare shownin (1) nto esrmn Value Unit ofmeasurement ie CO Miles g3,726.9 kg g2.4 348.7 784.0 2,591.8 kg kg kg kg 2 emissions (tons) 103 Environmental responsibility

106 Sustainability Report 2008 with anomalousleakageandtoperformtimely, targeted interventions. also comefrom applyingthenewprocedure formonitoringtheequipment,whichwillmakeitpossibletoidentify those 0.1% overfiveyears.Theactualavailabilityofequipment withlesserleakagewillplayacrucialrole; acontributionwill level ofapproximately 0.7%peryear. Basedonthe newequipmentinstallationschedules,theforeseeable reduction is By adoptingthevariousmeasures indicated,Terna proposes graduallyreducing theincidenceofleaksbelowcurrent developments expectedfor2009. dispersed gascouldinfactincrease duetothegreater useofSF under control, tocontainandpossiblyreduce theirpercentage incidenceonthetotalofgasused(inabsoluteterms, of traditionaldeviceswithinsulatingoil.Thankstotheseproperties, growing useofequipmentwithSF equipment issaferinoperation:theeventofseriousmalfunction,theydonothavesamedangerous consequences emissions specifictoTerna: be focusedontwomedium/long-terminterventionprogrammes involvingtheleadingsources ofdirect greenhouse gas The firstcalculationsofdirect andindirect emissionswere made(seepointEN16)inregards to2006.Attentionbegan seven Italiancompaniestookpart(seeboxonp.102). Disclosure Project, initiativefocusingonCO aninternational Terna’s choiceofcommitmentandtransparency wasrecognised bythefirstreport inItalycompletedbytheCarbon any kind.Terna’s choicetomakeacommitmentcontainitsemissionsistherefore completelyvoluntary. subject toobligationsreduce emissionsinaccordance withtheKyotoobjectives,ortoemissionstradingschemesof also intheelectricityindustrytheseare thosemostresponsible forgreenhouse gasemissions.ThisiswhyTerna isnot Terna’s businessisthetransmissionofelectricity, anditpossessesnoproduction activities.Asinallindustriesgeneral Boundary: Italy Initiatives toreduce greenhouse gasemissionsandreductions achieved EN18 an insulationmediumincertainelectricaldevices,makingitpossibletoreduce theirsize.ThesmallerSF Thanks tochemicalandphysicalproperties thatmakeitanexcellent insulator, thegasSF Containment ofSF In 2008,aseriesofinitiativestocontainSF emissions (seetheEN16indicator).Formore detailsseethebox“Terna joinsQuattroruote’s ‘10x10’project”. emissions by10%in2009.Thisnewinitiativeaimsatproducing effects onthecompany’sthird mostimportant source of In 2008,Terna joinedaprogramme toreduce theemissionsofcorporatevehiclefleets,committingtoreducing these phases, theyearlyobjectivesconsistofproject progress milestones,ratherthanemissionsquantitylevels. In bothcases,theseare initiativesthatmayhaveasignificant effect, butonlyinthemedium/longterm.Intheseinitial during pressure restoration operations.SF Part ofthegaspresent intheinfrastructures isdispersedintotheatmosphere duetoflawedseals,andsometimesalso also donebyothertransmissionoperatorsabroad. • a programme a tocontainSF • • a feasibilitystudyonenergy a savingsatpowerplants,aimedassessingthepossibilityofreducing electricity • SF consumption forstationuses. the search fortechnologicalsolutionstoimprove theequipment’sseal; – averylowcontributionindeed.Terna hasimplementedanumberofinitiatives,suchasearlyidentificationleaksand 6 gas doescontributetothegreenhouse effect, thiscontribution islessthanthatofothergasesbyafactor1:1,000 6 leaks 6 links. According toaCEI( 6 is classifiedasagreenhouse gas:Terna thusproposes keepingSF 6 leaks continued.Thefollowingtableprovides asummaryandthe Comitato ElettrotecnicoItaliano 2 emissions andthepoliciestocontainthem,inwhichonly 6 -insulated equipment). 6 ) technicalregulation, although (sulfur hexafluoride)isusedas 6 is foreseen, asis 6 -insulated 6 leaks , lighting atstations.Thesearch forsavingsopportunitiesisthus directed towards: There isapotentialconflictbetweenenergy savingsobjectivesandsecurityrequirements needs,whichrequire more Energy savingsatstations In 2008: • a feasibility studyofpower-savings a lightingsolutions,usingLED andautomaticon/off switchingsystemssensitiveto • • the first trialphotovoltaicsystemwasinstalledatthePalodelColle(Bari)station. the • specifictechniques were perfectedtobuildlighthousetowersusingLEDlighting; • theinstallationofphotovoltaicpanelsinauto-producing trialling stations. • yeo rgam/ntaie20 2009 2008 Type ofprogramme/initiative comparison witharmoured mounts restoration phase dispersion inthepressure per year (TA) sealedorwithleaksmax0.1% New measurement transformers of SF of atleast30%theamount (set ofvariousunits)withreduction Integrated CompactModules procedure New leak-monitoring in equipment reduced gaspressure to remotely monitor Early detectionsystems (3) The particularnature ofthisinitiative,justifiedbylossesexceedingthedeclared thresholds, liesinthefactthatther (2) Early andremote identificationofequipmentwithirregular drops ingaspressure makesitpossibletotaketargeted action (1) The newdetectionsysteminvolvesrecording thegasusedanddispersedforeachindividualstation;until2007,measure lighting conditionsandcapableofreporting anyanomalies; market capableofguaranteeinganextremely lowlevelofleakageovertime. avoiding thesystem’sgoingdownduetolossofinsulation. provided bytheoverallquantitiesofSF Terna joinsQuattroruote’s “10x10”project adoptingsafeandeco-friendlydrivingtechniques. • optimisingroutes, inandoutofthecity; • monitoring consumption; • renewing itsvehiclefleet–590“euro 0”carsin2007asopposedtothecurrent figure ofmore than600“euro 4” • fuel consumptionandtheefficiency ofthecorporatefleet.Terna has committedtoreducing CO Particular attentionisfocusedonreducing theimpactcausedbyemissionsconnectedwithcorporatetravel, the commitment In July2008,Terna joinedQuattroruote’s “10x10”project. To beginwith10companies(butalready now29)made 90 “euro 4”and“euro 5”unitsfor2008; vehicles –andadopting9hybridsinaproject thatcallsforreplacing about80“euro 1”vehicleswithapproximately 6 needed forinsulationin (3) (1) and less (2) toeliminating10%oftheircorporatevehiclefleets’CO 6 purchased, netofthenewinstallations. verification ofperformance. Installation offirstmodulesfor rttpsi eeomn hs.Prototypes indevelopmentphase. Technical specificationtosuppliers. section atLacchiarella. First installationonthe380kV previous measurements were found. previous measurements were found. measurements. Nodeviationsfrom procedure, whichguaranteesaccurate June. Partialapplicationofnew measurement accuracy)approved in Procedure (requiring greater 2 emissions inoneyear. and willbeinstalledasneeded. is considered anapplicationstandard of verifications,theequipment After thepositiveoutcome for production (scheduledfor2010). Evaluation ofresults. Ifpositive,orders of widespread application. Verification ofresults andevaluation all plantfortheentire year. Application ofprocedure: e iscurrently noequipmentonthe ontheequipmentwhilealso 2 emissions by: ment oftheleakswas 107 Environmental responsibility 108 Sustainability Report 2008 WASTE PRODUCTIONANDDISPOSAL Italy Boundary: Group Total weightofwastebytypeanddisposalmethod EN22 installed inTerna’s conditioningsystems.Fortheresults, seetheindicatorEN17. Although dataonozone-depletinggasconsumptionare notyetavailable,2008sawthefirstcensusofrefrigerant gases Boundary: Italy Emissions ofozone-depletingsubstancesbyweight EN19 with thelegislation inforce. Tables ofindicators.Nodetailonthemethods ofeliminationisavailable,buttheyare identifiedbyTerna incompliance For the2005-2008period,adetail ofthewasteproduced andrecovered byanalyticcategoryof wasteiscontainedinthe and equipmentrenewal activities,whichcanbediscontinuousover time. No trend emerges inthethree-year periodinquestion. Theamountofwasteproduced eachyearisinfactaffected byline PRODUCTION ANDELIMINATION OFURBANWASTE -2008 improvement oftheEnvironmental ManagementSystem.Theyare publishedinthefollowingtable. These lastdatawere surveyedforthefirsttime in 2008,withreference totheentire Company, asprovided forinthe which are classifiedasnormalurbanwaste,are excluded. The wasteinconsiderationisthatderivedfrom theproduction process. Products from service(typicallyoffice) activities, at eoey%9. 6892.7 86.8 8,282.6 90.8 Quantity sentforrecovery 4,562.9 Quantity produced Toner cartridges,spentandnotcontaininghazardous substances Toner % Quantity sentforrecovery 8,010.7 Quantity produced Paper ton Waste recovery Waste produced -total Special hazardous waste Special non-hazardous waste Unitofmeasurement (1) Exceptforthe“Excavationearthandrocks” and“Mudlanddrainagewater”forthereasons indicatedinthecomment. uniypoue o ,0. ,9 3,387.8 3,128.4 1,793 4,894.8 1,560.6 4,549.4 2,769.9 4,009.6 2,400.2 3,616.8 ton 4,001.2 ton 3,653.8 ton ton quantity sentforrecovery quantity produced quantity sentforrecovery quantity produced (1) 2008 Unit ofmeasurement 072006 2007 o 8.6 8.6 ton ton 53.3 53.3 ton ton and the“Disputes andlitigations”sectionscontain furtherinformationon environmental disputes. environmental lawsorregulations were recorded inthe2006-2008period, eitherinItalyorBrazil. TheTables ofindicators No administrativeorjudicial sanctions, pecuniaryornon-pecuniary, laidbyfinaljudgementforfailure tocomply with Boundary: Group for non-compliancewith environmental laws andregulations Monetary valueofsignificantfinesandtotal numberofnon-monetarysanctions EN28 2008 WASTE PRODUCTIONANDELIMINATION -GROUP table illustratestheGroup’s situationforthesameyear. The dataonthewasteproduced intheBraziliansubsidiariesare availableforthefirsttimewithreference to2008.Thefollo Participações. Monitoring ofthewastedataisoneelementsEnvironmental ManagementSystemimplementedbyTerna productive process. Itexcludesthatproduced byservice(typicallyoffice) activitiesandclassified asnormalurbanwaste. voltage electricityandmaintainingthelinesunderconcession.Thewasteconsiderationisthatderivedfrom the The activitiesofTerna ParticipaçõesandthesubsidiariesETEO,ETAU, Novatrans,andTSNconsistoftransmittinghigh- Brazil for theexclusionare asfollows: reference ismadeofthesedatainthetableorder tomakethedatamore uniformandcomparableovertime.Thereasons The wasteproducts intheaforementioned examplesbothfallunderthecategory“Excavationearthandrocks”: no Conversely, theapproximately 5,500tonsremoved torenovate theCasellina(Firenze) powerstationwere almostentirely recover ratherthanbyTerna.performed earlieratthesamesitesbyotherindustrialconcerns, station, were brought toanauthoriseddump.Thiswasduethetypeofpollutantpresent, connectedwithactivities tons of“Mudandlanddrainagewater”originatingfrom thesamesite,where Terna beganconstruction ofamajorpower For example,in2008,theapproximately 61,000tonsofearthremoved from theFiumesantositeinSardinia andthe2,093 waste maybeexcludedbylaw. years underquestion–istherefore notavariablecompletelyunderTerna’s control, sincetherecovery ofsometypes in order tobeableproceed withrecovery; thepercentage ofrecovered waste–whichstillremains quitehighinthefour The regulations wasteidentifytheconditions(wastetype,presence oflawgoverning andquantityofhazardous substances) Fiumesanto andCasellinaworksites)wouldhaveyieldedthefollowingresults: Inclusion ofthe“Excavationearthandrocks” and“Mud andlanddrainagewater”categories(chieflyregarding the • the worksiteactivities,andthewastederivedtherefrom, the are notnormallyincludedwithintheboundaryofTerna’s • specialnon-hazardous waste(quantitysentforrecovery) 9,130.0tons. • specialnon-hazardous waste(quantityproduced) 72,564.4tons; • waste produced (total)77,034.1tons; • there isaconsiderableimbalancebetweentheweightofthis“exceptional”waste(excavatedearth)andother • at eoey%9. . 90.6 0.2 8,023.6 90.8 12.9 % 8,010.7 ton Waste recovery Waste produced -total Special hazardous waste Special non-hazardous waste Ui fmaueetIayBai Group Brazil Italy Unitofmeasurement included inTerna’s activities.ThisholdsparticularlytruefortheFiumesantoworksite. activities, butare usuallycontracted.Thetwoaforementioned casesare exceptions; uniypoue o ,0. . 4,011.4 3,618.6 1.8 1.8 4,012.3 3,654 11.1 4,009.6 0.2 3,616.8 ton 4,001.2 ton 3,653.8 ton ton quantity sentforrecovery quantity produced quantity sentforrecovery quantity produced wing ed. 109 Environmental responsibility 110 Sustainability Report 2008 fleets’ CO In 2008,Terna joinedQuattroruote’s “10x10”project, withwhichitcommittedtoeliminating10%ofitscorporatevehicle TERNA’S VEHICLEFLEET the environmental impactoftheiruseissignificantlydiminished. Since themotorvehiclesare usedonadailybasisforinspections onlinesandtoreach plantsthatrequire urgent repairs, euro 0category, entered service. to the1990swere replaced withnew, less-pollutingones.Inparticular, euro 4/5cars,whichhavereplaced thoseinthe 2008 andthefirstmonthsof2009sawamajorchangeovermotorvehicles:obsoletepollutingvehiclesdatingback At theendof2008,Terna SpAvehiclefleetconsistedof1,555vehicles,which: Italy transport ontheenvironment thevehiclefleet,andscrupulousmaintenance. consistsofmodernising no impactproblem inspecificareas, butageneralpollutioneffect. Themaininterventionforreducing theimpactof for lineinspectionandrepair, isnotconcentratedinafewlocations,butemployedovervastterritory. There istherefore The maindataavailableregard thefleetsofcompanyvehicles.InbothItalyandBrazil,company’sfleet,usedmainly Boundary: Group used fortheorganisation’soperations,andtransportingmembersofworkforce Significant environmental impactsoftransportingproducts andothergoodsmaterials EN29 safety standards. All thevehiclesare periodicallyoverhauledincompliancewiththemaintenanceprocedures andinlinewiththerequired There are three categories: acquisitions thathavetakenplace,andtotheinsourcing oflineinspectionandmaintenanceactivities. with theprevious two-yearperiod(2006:42vehicles;2007:54vehicles),asignificantincrease maybeseen,duetothe Terna Participaçõeshasafleetof119cars(datarefer totheendof2008andcensus ofownedvehicles).Compared Brazil 201specialvehicles(wreckers, cherrypickers,aerialworkplatforms,etc.). • 701vansandoff-road vehicles; • 653carsofvariousmakesforthemovementpersonnelmaintenance, urgent interventions,andlineinspections; • • small displacement:62vehicles. small • medium displacement(between2,000 ccand3,000cc):41vehicles; • large displacement:16vehicles; • uo51063 0.0% 0.6% 63.2% 36.2% 0 9 100% 949 544 1,502 6.3% 71.2% 0.6% 21.9% 100% 1,126 100 9 347 1,582 Total motorvehicles euro 3orless euro 4 euro 5 hybrids Motor vehiclesatendofyear, bycategory

1 Data refer toMarch 2009. (1) 2 emissions inoneyear(seebox“Terna joinsQuattroruote’s ‘10x10’project”). 2008 (1) 2007 the AutonomousProvince ofTrento. In 2002,Terna reached agreements onapplyingtheSEAmethodwithagrowing numberofregions –now15,including commitment. bodies, ofProtocols ofUnderstandingandProgramme Agreements, toformallyestablishtheprogress ofthemutual the AutonomousProvinces. Thegroup’s proceedings are supplementedbythegradualsigning,withregions andlocal Culturali Tutela delTerritorio edelMare 2005, whichincludesparticipationbytheMinistryforEnvironment, LandandSea( planning process wasshared anddevelopedwithinanational-levelworkinggroup (“SEA”table),formallyestablishedin The choiceoftakinginspirationfrom theSEAmethodology forconstructingatransparent, documented,viableandinclusive far lessarticulatedintermsoftherelationship withlocalinstitutions. (Directive no.2001/42/EC),wasonlytobeadoptedinto Italian legislationmanyyearslater(in2007),andwithimplications of theterritory, inspired bytheStrategicEnvironmental Assessment(SEA).TheSEA,thentheobjectofanECDirective administrations. Insubstance,Terna’s approach involvesvoluntarilydevelopingamethod forrelating withthestakeholders Once solutionsare foundtogetherwithlocaladministrations, specificagreements are signedbetweenTerna andthese characterisation are shared betweenallinvolved,issuesare examinedinviewoftheoptimalplacementnewinstallations. with institutionsandpublicadministrationsatvariouslevels(Regions,Provinces, Municipalities).Criteriaofterritory construction ofnewlinesandstations–includedinitsDevelopmentPlan.Themethodologyusedcallsforpriordialogue Terna’s choicewastoanticipatedialoguewiththeterritoryinstrategicplanningphaseofinterventions– or even,insomecases,theimpossibilityofidentifyingapracticablesolution. populations affected. Theresult wasthatoftenitbecamenecessarytochangetheoriginaldesign:thiscausedslowdowns Assessment (EIA)procedure. Thisapproach ledtostrong oppositionfrom thelocalinstitutionsinvolved,and already attheexecutivelevel.Environmental considerationswere madeinthatphasethrough theEnvironmental Impact dialogue withtheterritoryonlybeganatbeginningofauthorisationphase,wheninfrastructure’s designwas Starting in2002,Terna openedanentirely newscenariofor developinginfrastructure inItaly. Inpractise,untilthattime, system’s developmentrequirements are placed. the richnessandpotentialofculturalenvironmental assetsoftheterritoryinwhichelectricitytransmission It isindialoguewithlocalinstitutionsthatTerna concretely seekssustainablesolutions.Inthiswayitispossibletopres complexities anddevelopmentdifficulties. the densityofpopulationmanypartsItaly, andtheartistic,culturalscenicvalueofothers,increases planning impact connectedwithbuildingnewpowerlinesisconcentratedontheterritoryaffected bytheroute oftheline.Moreover, areas ortheentire country. Whilethegrid’sdevelopmentisfunctionaltointerests oftheCompany, theenvironmental overload risks–andtheincreased energy production andconsumptionthataccompaniestheeconomicgrowth ofspecific The buildingofnewlinesanswerstherequirements oftheelectricitysystem–suchasresolving congestionandeliminating Concerted planningwiththeterritory Additional information - MiBAC),theMinistryofEconomicDevelopment( - MATTM), theMinistryofCulturalHeritageandActivities ( Ministero delloSviluppoEconomico Ministero dell’Ambienteedella Ministero periBenieleAttività - MSE),theRegionsand erve 111 Environmental responsibility 112 Sustainability Report 2008 fields, theshared choicetoadoptamaximum safeguard criterionwasmade. no. 36/2001which introduces theconcept ofabuffer zonetoprotect thepopulationfrom theeffects ofelectromagnetic Terna andthebodiesinvolved(E2). Forexample,thiscategoryincludescontinuousurban areas, forwhich,inlightofLaw directly excludedbytheregulations, butthatare stillrestricted through specificagreements agreed upon recognised bytheregulations asareas ofabsoluteexclusion,suchasairportsandmilitaryzones (E1),andareas not Each classofERPA criteriaincludesanumberofcategories. Atpresent, theExclusioncriterionincludes areas collaboration betweentheparties,isnowbroken down intolevelsofdialogue,analysisandassessment: The SEA-inspired model,whichovertheyearsrecorded majordevelopmentsarisingfrom well-organised, profitable REGIONS WITHSEAAGREEMENTS criteria basedonfourclasses: various interventions.Terna andtheRegions,aspartofnational SEAworkinggroup, haveagreed uponasystemof The territorytobestudiedischaracterisedaccording tocriteria thatexpress itsgreater orlessersuitabilityforhostingt the ERPA (Exclusion,Repulsion,Problematic nature, Attraction)locationcriteria. In concertedplanningwiththeterritory, oneofthemosteffective withlessimpactissharin toolsforselectingalternatives Territory characterisation criteria Attraction: • withintheselectedcorridor, implementation: forthedesignedplantsare possiblelocationalternatives identifiedasthe • fortheworktobecarriedouthavebeenidentified, itispossibleto structurallevel:oncethestrategicalternatives the • strategiclevel:oncetheelectricalrequirements the fordeveloping thetransmissiongridare identified,thepossible • Problematic nature: • Repulsion: • Exclusion: • Sicily 2004 Sardinia 2006 Campania 2004 Lazio Umbria 2005 Tuscany 2005 Liguria Piedmont 2002 Lombardy 2003 be developed. route’s feasibilityareas –portionsofterritoryuptoseveralhundred metres wide,withinwhichthedesignedroute may scheduled works; identify, corridors(portionsofterritoryuptoseveralkilometres withinsaidalternative, wide)suitableforhostingthe tobeplanned inresponseintervention alternatives toidentifiedrequirements (criticalities)are defined; and bytheabsenceofanautomaticaprioriassessmentmechanism; mustbeidentified.Unliketheothercriteria,thisoneischaracterisedbyneedfor morealternatives in-depthanalysis, overcome, subjecttocompliancewithaframeworkofrequirements agreed uponwiththebodies,orwhetherother and thattherefore require additionalterritorialanalysis.Thisanalysis establisheswhetherthelevelofcriticalitycanbe of requirements; are withlessenvironmental onlyalternatives compatibility, andatanyrateincompliance withtheagreed-upon framework omlsdareet Agreements beingformalised Formalised agreements areas where anybuildingisruledout; areas thatpreferably wouldnotbeaffected byinterventions,unless there are orwhere noalternatives, there areas tobeprivilegedwhere possible,subjecttoverificationoftheterritory’sload capacity. areas where passageraisesproblems onobjectivegrounds documentedbythebodies involved, Autonomous Province ofTrento 2006 Emilia Romagna2003 a priori Basilicata 2004 Calabria 2003 Abruzzo 2007 Marche 2005 Molise 2008 Apulia 2008 between he g that were notformallydefinedwere reached. Campania, Marche, Piedmont,Sicily),andthere were two(EmiliaRomagna,FriuliVenezia Giulia)withwhichagreements In late2008,there were sixRegionswithwhichaformalagreement onsharingcriteriawasreached (Abruzzo,Calabria, is heldtobemore sustainablethanthepossibilityofinvolvingnewterritorialsettingsnotinterfered withbyline infrastru (A2), asinfrastructuralandpowercorridorsinwhichtheplacementofanewline,consistentlywithterritory’sloadcapac The Attractioncriterionincludes:areas withgoodsceniccompatibility(A1)andareas already affected bylineinfrastructure consideration onlyifthere are withgreater noalternatives environmental compatibility(R3). areas affected byprotection constraint,forwhichspecificagreements are established(R2),andareas tobetakeninto The Repulsioncriterionincludes:areas (R1),natural thatmaybetakenintoconsiderationonlyintheabsenceofalternatives The integratedplanningprocess in lightoftheobjectivesand territorialsettingoftheplanorprogramme”. that implementationoftheplan orprogramme mayhaveontheenvironment, aswellthereasonable alternatives for thepreparation ofthe Environmental Report“...identifying,describingand assessing thesignificanteffects The nationallevelistheformal leveloftheSEAprocedure, asdefinedbytheregulations referred toabove.Itcalls territory, ratherthanmerely from theavailableliterature. supplements: thereport containsupdateddataandinformation originatingfrom concertedplanningwiththe up anEnvironmental Reportasrequired by process), asdefinedbytheregulations inforce. Integration,understoodinthissense,makesitpossibletodraw 2002 (regional processes). Theseare supplementedandintegratedbytheplan’sformalSEAprocedure (national This approach makesclearthevalueofconcertedplanning processes voluntarilyimplementedbyTerna since concretely integratesenvironmental “considerations”arisingfrom dialoguewiththeterritory. sustainability ofplanningthedevelopmentNationalTransmission Grid:theelectricityplanningprocess dialogue withtheconcertedplanningactivities.Terna believesthatinthiswayitcanhelpguaranteethe The term“integratedplanning”meansthattheelectricitysystem’splanningactivitiesare inconstant,mutual the years,bringingitintoharmonywithprocedure required bytheregulations inforce. the “NationalSEAtable”.Thisprocess capitalisesontheconcerted planningapproach developedbyTerna over The followingdiagramillustratesthenewintegratedplanningprocess thatTerna hasdefinedinagreement with territory’s institutionsintothisnationalprocess. the great wealthofinformation,contentandagreements developedovertimethrough direct dialoguewiththe Transmission GridDevelopmentPlanwithaprocedure atnationallevel.Theproblem forTerna washowtointegrate subsequently modifiedbyLegislativeDecree no.4/08)introduced theobligationofsubmittingtoSEANational The adoptionoftheSEAdirective (Directive no.2001/42/EC)intoItalianlaw(LegislativeDecree no.152/06, INTEGRATED PLANNINGOFTHENATIONAL TRANSMISSIONGRID NATIONAL REGIONAL ORIENTATION LOCATION PROCESSESWITHREGARDTONEWREQUIREMENTS AND REQUIREMENTSALREADYAPPROVED IN PREVIOUSDEVELOPMENTPLANS Legislative Decree ELABORATION MONITORING no. 152/06andsubsequentmodifications AND APPROVAL CONSULTATION cture. ity, 113 Environmental responsibility 114 Sustainability Report 2008 Photographic simulationoftheMaleo stationwiththeplannedmaskingworks. Photographic simulationofthebuildingMaleostation. Lodi: streamlining withlowenvironmental impact species ofshrubvegetation,andwithembankmentstooptimisetheresult. to localanimalspecies.Asillustratedbyth techniques whichusenativevegetationtoenableincreased local biodiversityandoffer feedingandrefuge habitats the future MaleoandChignoloPostations callsforcarryingoutmaskinginterventionswithnature engineering minimise thearea ofterritoryoccupiedbythelines,and area thesupportsoccupyonground (5m traditional, truncatedpyramidsuspensiontowers.Theuseofthesenewtypespylonwillmakeitpossibleto calls fortheprevalent useoftubular, single-pole,or“reduced environmental impact”supports toreplace the new 380kVlineand4kmofconnectionstolower-voltage levels).From thetechnologicalstandpoint, theproject than doublethenewones:64kmoflinestobedismantled,asagainst27overheadbuilt(23 possible toconsiderablyreduce thepowerlines’environmental pressure. Infact,theeliminatedlineswillbemore one halfthepowerofalarge electricpowerplant.Theworktostreamline thehigh-voltagegridwillalsomakeit grid willbeeliminated.Energy willberecovered from amore efficient source foratleast400MW–whichistosay the future powerstationsofChignoloPoandMaleo.In of Understandingtostreamline theelectricitygrid.TheProvince ofLodiwillhaveanew380kVpowerlinebetween In June2008,inLodi,theProvince, Parco RegionaleAddaSud,andalltheaffected municipalities signedtheProtocol indicators, etc.)definedbythenationallevel. proceeds onthebasisofandinfurrow laiddownbycriteriaandmethods(ERA/ERPA placementcriteria, between thetwolevels:aimistoleaverightdecision-makingautonomyregional level,whichstill the Environmental Report.A “route feasibilityareas”), thecontentsoftheseagreements migratetothenationallevel,becomingcontentfor development interventions.Wheneveragreements withRegionsandlocalbodiesare reached (on“corridors”and/or the ideaistofindtogethermore sustainableandpracticablelocationsolutionsfortheNationalTransmission Grid’s planning thatTerna, inharmonywiththeintentofnationalSEA,carriesonRegionsandlocalbodies: The regional levelistheconcrete levelof“dialoguewiththeterritory”,whichistosaypriorconcerted the documentsformallyandexpressly required bytheSEAprocedure (alongwiththenon-technicalSummary). approval andmonitoringoftheDevelopmentPlanEnvironmental Reportassociatedwithit:theseare The variousphasesinwhichthenationallevelisorganised are thoseoforientation,elaboration,consultation, single-pole support,asopposedto250m fundamental aspectofthe integrated planning process outlined aboveiscoordination 2 for thetraditional,truncatedpyramidsuspensiontower).Thedesignof e photosimulationsmade,thestationwillbemaskedwithvarious thiswaytheso-called“bottlenecks”currently affecting the 2 for a would thusbesatisfiedwithalowerquantityoffuel:thebenefits maybequantifiedas present one,withagreater levelofproduction byplantswithhigherperformance.Thesameamountoffinal consumption The interventionsprovided forbytheDevelopmentPlanwouldmakepossibleaproductive mixmore efficient than the obsolete plantsnecessaryforthegrid’ssafety. that riskconditioning operators,whoenjoythe rightofpriorityindispatching. Transmission Gridtofosterproduction from renewable sources, seekingtoovercome anygridandoperatingconstraints andislandregions.especially inourcountry’ssouthern OneofTerna’s tasksistoplanthereinforcements oftheNational an energy potentialshowingstrong growth inrecent years. Inparticular, thewindsource recorded aconsiderable increase, interventions –ofproduction plants from renewable sources. Thegenerationofenergy from renewable sources represents The maincontributiontoreducing emissionscomesfrom theconnection–provided foramongtheDevelopmentPlan’s Connection ofplantsfrom renewable sources units thatare more efficient, orlesspollutingintermsofCO “electrical areas”. Theexistenceoftheselimitsimposessomerestrictions onthepossibilityofproduction bygeneration Among themaingoalsoftransmissiongrid’sdevelopment isthatofovercoming thelimitsoftransportbetween Improving theproductive mix be heldtoincludetheaddedvalueofa about 1,200GWh/year. Supposingthatthis reduction coincideswithanactualsavingsinfossilfuel,theseinterventionsmay could reach apowervalueof200MW. Thiscorresponds toareduction ofpowerlossinthegridthathasbeenassessedat With thecompletedevelopmentofinterventionsprovided for inthe2009DevelopmentPlan,reduced lossesatpeak replaces a150kVoneonthesamepath. grid loss.Thesameresult isproduced bymakingasectionofthegridmore powerful,forexamplewhena380kVline bring thepointsofwithdrawalandconsumptionclosertogether:otherconditionsbeingequal,consequenceisreduced the pathbeingequal,lossesare greater onalow-voltageline.Developmentinterventionsthatimprove thegrid’slayout production (ofinputintotheNationalTransmission Grid),thegreater are thelosses,consumptionbeing equal.Moreover, as possible,thefartherpointofconsumption(ofwithdrawalfrom theNationalTransmission Grid)isfrom thepointof Grid lossesdepend,amongotherthings,uponthelengthofpathelectricityontransmissiongrid.Putassimply Reduction ofgridlosses achieved uponcompletionofthePlanare inthree categories. service safetyandfinalcost,butalsointermsofreduced emissions bytheelectricitysystem.Theeffects thatmaybe The buildingofnewlinesandstationsprovided forbytheDevelopment Planbringspositiveeffects notonlyintermsof Development Planandreduction ofCO Streamlining interventionsare performedmainlyby: portions ofthegridare removed whennewlinesare built. Streamlining interventionsare complexactivitiesthatinvolveanumberofgridelementsatthesametime:oftensome Streamlining Environmental SustainabilityandDevelopmentPlan See, forexample,thebox“Lodi:streamlining with lowenvironmental impact”. benefiting theenvironment derivedfrom thegriddevelopmentactivity. Therefore, thedismantlingoflinesectionsduetoconstructionnewpowerlinesismostsignificantcontribution exceed thenewconstructions,withapositiveneteffect intermsoffreeing theterritoryofpresence ofpowerlines. the removal ofoldlines.Inthesetstreamlining interventionsprovided forbytheDevelopmentPlan,demolitionsfar When streamlining ispossible,thedevelopmentofanewplantalsoinvolvesreducing occupationoftheterritory, dueto 3,600,000 tonsayear of Terna controlling gridlosses). of theproduction plantscouldleadtodifferent outcomes(seealsotheindicatorEN17formore discussiononthepossibility It shouldbenotedthattheestimateismadewithconditionsbein replacing someplantswithothershavingsuperiorfeatures, suchasforexampletheintroduction ofnew380kVlinksto • avoidingstrengthening plantsthathavereached saturation,byintroducing newgridelements(thisisusuallythecaseof • eliminatingportionsofgridthatare foundtobeusednegligiblyornotatallfollowingnewdevelopmentsresulting ina • power lines,where thenewelementsare forexamplestations). more powerfulgrid; replace agreater numberoflower-voltage lines; . reduction inCO 2 emissions 2 emissions 2 emissions, andatthesametimemakesproduction by g equal:amodificationinconsumptionortheplacement ranging between 500,000and600,000tonsayear CO 2 emissions reduced by up to . 115 Environmental responsibility 116 Sustainability Report 2008 MAIN INTERVENTIONS TOFOSTERWINDPRODUCTION possible tolimitthebuildingofnew150kVpowerlinesthatwouldotherwisebenecessary. production collectionstationshavebeenplannedandare beingauthorisedontheprimary380kVgrid,which will makeit subtransmission gridsinwhichwindgenerationisintroduced directly. Inadditiontotheseinterventions,newwind factors conditioningtheexercise ofwindplantproduction, aswellinterventionsforthelocalstrengthening ofthe sections ofprimarygrid(e.g.SAPEIandSicily-mainlandinterconnection). Indirectly, thismakesitpossibletoreduce the The developmentsolutionsplannedinresponse tothecriticalareas asabovetherefore includeinterventionstoreinforce The elementsconditioningwindproduction maybeascribedbasicallytotwocategories: limitsthatmaybedirectly attributedtoaninsufficient transmissioncapacityoftheportionsgrid(generallyinhigh- • limitsduetoproblems ofsafeoperation oftheelectricitysystem,whichistosaythoseconnectedwithdispatching • aeoyInterventions Category sources isdirectly introduced from non-programmable renewable high-voltage gridonwhichproduction decongestion ofportions Interventions forthestrengthening and renewable sources production from non-programmable in generationdispatching,whichfoster to thereduction ofoperatingconstraints Grid reinforcements indirectly functional voltage) towhichtheplantsfrom non-programmable renewable sources inquestionare connected. transport system; in particulartheislands,andtherefore maybereduced are alsoindirectly correlated withaninsufficient transmissioncapacityonsomecriticalsectionsofthegrid.Thisistrue from non-programmable renewable sources; theselimitations,transitoryandconcentratedonlyinthelow-loadhours, constraints thatalsorequire verificationofthegeneration/loadbalanceincasesuddenlackproduction capacity and Salerno in thearea betweenFoggia,Benevento Reinforcements ofthetransmissiongrid and betweenSardinia andCorsica between Sardinia andthemainland, Strengthening oftheinterconnection capacity grid inSicily and strengthening oftheultra-high-voltage “Sorgente-Scilla-Rizziconi” 380kVpowerline with interventionstoreinforce theultra-high-voltageprimary Power from renewable sources (MW) 1,100 700 1,000 Wind power:apriority increase in2008,growing from thevalue In linewithwhathasbeenrecorded inrecent years,theinputfrom thewindsource inItalyshowedasignificant (2) Theforecast accuracyisassessedasthesum ofabsolutevaluestheforecast on anhourlybasis,inproportion totheen (1) Datareferring onlytomajorproduction units,whichistosaythosewith powergreater than 10MVA. system ofpartthebenefitobtainedprevious year, isincreasingly challenging. the definitionofatarget forthefollowingyearswhich,through amechanismofretroaction totheelectricity objective isrequired bytheAutorithyforElectricityandGasitself (AEEG)informulatingtheincentivesthrough The schedulingoftheseactivitiesisessentialforobtaining acontinuouslyimproved forecast accuracy. Andthis the neuralnetworkunderlyingforecast model. (25% accuracy),were obtainedthankstoanactivityofconstantmonitoringandcarefully scheduledupdatingof standards.finest international These results, confirmedbythepreliminary dataforthefirsttwomonthsof2009 The results obtainedare largely positive:theaccuracyofforecast in2008was 27% the system’soperatingreserve margins tobebettersized. such asthermoelectricproduction, withbenefitsintermsofbothsafetyandaffordability, inparticularenabling The windinputforecast makesitpossibletomore accurately scheduleproduction from non-renewable sources, remuneration aimedatachievingadequateforecasting accuracy. 72-hour timeframe,inputsfrom wind.TheAutorithyfor ElectricityandGasgaveTerna aspecificincentivising Starting January2008,aspartofthedispatchingactivity, Terna embarkedonadaily process toforecast, with from creating problems tosafe,uninterruptedservice. the primarysource anditsunpredictability require specialattentioninplanning,order tokeepwindproduction reducing, innormaloperation, productions from sources other thanwind;however, theintermittentnature of converge inassigningdispatchingprioritytoelectricityfrom thewind.Terna ensures thedispatching priorityby The European Union’sobjectivesregarding penetrationofrenewable sources andtheregulation inforce inItaly consequently reduced greenhouse gasemissions. introduction ofproductions from non-renewable sources, andinparticularfrom thethermoelectricsource, with for 2009.Thisincrease hasasignificant,positive impactinenvironmental terms,inthatitinvolvesreduced 1 of 3.7TWhin2007to4.4TWh,withanestimatedfigure of5.1TWh 2 , comparablewiththe ergy introduced. 117 Environmental responsibility

2008

Social responsibility 120 Sustainability Report 2008 The followingparagraphsprovide furtherdetailsofTerna’s managementprocedures inItaly. (see p.46-47). communicationprogrammes monitoring andcheckingtoolusedintraining,developmentinternal survey isaninternal At thestartof2009,“PeopleSatisfaction”survey, whichwasrunforthefirst timein2007,wasagainrepeated. This Department Chief.Safetymattersare theresponsibility oftheCompanySecurityDepartment. Responsibility forpersonnelpoliciesandmanagementisentrustedtotheHumanResources Departmentanditsrelated differences betweenthetwocountries. adopting themanagementpracticesandtoolsusedinItaly, whilerespecting thecultural,organisational and social This fundamentalapproach canalsobeseeninthemanagement policiesofitsBraziliansubsidiaries,whichare gradually Over theyears,importanceoftheseaspectshasledTerna, initsItalianactivities,toadoptanapproach thatisbasedon under livevoltage. operating activitiesentailspecificrisks,suchasworkingatconsiderableheightsandperformingmaintenanceonlines renewing theseskills.Asecond,equallyimportant,elementissafetyintheworkplace,heightenedbyfactthatmany the implementationofcompanystrategies.AfundamentalelementTerna’s HRmanagementapproach isthefocuson high levelsofprofessionalism andoperatingefficiency, andtodealwiththechangesrequired bytheevolvingcontextand technical skills.Oftenrare orevenuniquetotheelectricityindustry, theseskillsallowTerna tooperateeffectively, achie Human resources playacrucialrole inTerna’s operations.Thecompany’speopleare therepository ofTerna’s distinctive Labour practicesanddecentwork Context, managementapproach, andobjectives Despite thisattention tosafety, however, there wasunfortunatelyone fatalaccidentamongTerna’s employeesduring OHSAS 18001 Terna’s constantattentiontowards andsearch forcontinuousimprovements allowedthe Companytobeawarded the responsibility, whichneedtobefostered through training,informationandsupervision. practices. However, theessenceofeffective prevention stillliesinthebehaviour ofitsemployeesandtheirsense standards, aimedatsafeguarding the healthandphysicalintegrityofitsstaff, mainlythrough theuseofgoodtechnical electrocution andfalling.Terna’s approach totheseissuesisadoptandcontinuallyimprove workmethodsandsafety measures are strictlyobservedwhenworkisbeing performed.Preventive measures risksof specificallyconcern risks, adoptingmeticulous,safeworkingpractices,providing constanttrainingandmonitoringtoensure thatsafety Terna hasalong-standingtraditionindevelopingandimplementinginjuryprevention measures. Theseinvolveidentifying Safety intheWorkplace BREAKDOWN OFEMPLOYEESACCORDINGTOQUALIFICATIONS -ITALY graduates duringthe2006-2008three-year period. include thefollowingbreakdown ofemployeesaccording totheirqualifications,whichshowsanincrease inuniversity objectives. Asconfirmationoftheimportancetechnicalskillsandhighprofessionalism ofTerna’s personnel,we sections “DevelopmentandmanagementofHumanResources” and“Training” regarding the2008results andmanagement In additiontotheabove-mentionedinformation,furtherdetailscanbefoundunderG3LA10indicatorandin the Development ofhumancapital Primary/Middle School 21% 21% Primary/Middle School 17% Vocational Qualification 45% High SchoolDiploma 17% University Degree salaryandwelfare policiesaimedatmatchingindividualperformancewithcompanytargets andproviding employees • intraininganddevelopment,toensure investment thattheCompanyanditspeoplehave thechancetogrow; • attentiontosafety, toguaranteethephysicalintegrityofitsemployees; • as inotherlarge companiesintheelectricitysector, isconsiderablybetterthantheItalianaverage. and theirfamilieswitheconomicstability. Incomparativeterms,theremuneration packageoffered toTerna’s employees, “Certification forsafetyinthe workplaceandhealthprotection management”in December2007. 2008 16% 15% 16% 17% 18% 17% 23% 24% 23% 43% 44% 072006 2007 ving : treatment tothedisadvantageof women. published forthefirsttimethis year)suggestthatTerna's managementsystemsdonotprovoke anydiscriminatory The mainindicatorsusedtodescribe equalopportunitiesbetweenmenandwomen(some ofwhichwere calculatedand following three months,against 30%forthewholesix-monthperiod). and duringtheoptionalperiod ofleave(45%inthefirstmonth,40%secondand third monthsand30%inthe pay thatishigherthanthestatutory amountbothduringthemandatoryperiod(100% of thelastsalaryinstead80%) provisions andthishasfacilitatedtheincrease inwomenworking inTerna. Forexample,Terna offers alevelofmaternity Some ofthebenefitsprovided bytherelevant collectivelabour contractare animprovement oncertainnormallegal greater overallparticipationofwomeninworkandtheirgrowing levelofeducation. in suchpositions.In2008,thetrend showinganincrease ofwomenworkingforTerna continued,asareflection ofthe personnel inItalystoodat23%,alevelthatismuchhigherthan thepercentage ofwomenalready workingintheCompany During 2008,thepercentage ofwomenhired inmanagerial andoffice positionsoutofthetotalnumbernewlyhired 12% in2005to15%2008. found inthemore highlyqualifiedmanagerialpositionsofresponsibility, where thepercentage ofwomenhasrisenfrom women workingintheGroup ishoweverincreasing, andhasrisenfrom 9.2%in2005to10.5% in2008.Thistrend isalso in Italy, duetothetraditional shortageofwomenoffering theirservicesinmore technicalprofessions. Thenumberof With regard tothepercentage ofwomenintheworkforce, theGroup continuestoemployamajority ofmen,particularly In Italy, allemployeesare Italian nationals;inBrazil,too,allemployeesare local,withtheexceptionofsevenexpatriate Code ofEthics. form ofdiscrimination,startingfrom thecompany’spersonnel selectionprocedures, isstrictlyforbiddenbytheGroup’s Terna adoptspersonnelrecruitment, developmentandsalary systemsthatreward individualmeritandperformance.Any Diversity andEqualOpportunities during thethree-year periodfrom 2006to2008. Negotiations withtheNationalandTerritorial Trade Uniondelegationsledtothesigningoftwenty-one unionagreements for mediationandconciliationprocedures. by Lawno.83datedApril11,2000),thecollectivenationallabourcontractJuly18,2006regulates theprovisions It shouldalsobenotedthatwithregard tocertainaspectslaiddownbyLawno.146datedJune12,1990(latermodified to exercising therighttostrikeforrest ofTerna’s personnel. Provided thatstrikesare announcedincompliancewiththelegalandcontractualprovisions, there are noexistinglimitations their ordinary workduringthestrike,mustensure theiravailabilitytobeoncallevenduringtheactualstrikeperiod. As regards personneloncall,theagreement inquestionestablishesthatsuchpersonnel,whilehavingtherighttosuspend Planning, DistributionCentres andCentres fortheRemoteControl ofSystemsare alsoexemptfrom takingstrikeaction. With regard tosuchprovisions, Terna’s shiftpersonnelworkingattheNationalControl Centre, Grid ServicesandProduction term planning,theoperationandmaintenanceofproduction and thetransmissionserviceare exemptfrom takingstrikeaction. The agreement alsostatesthatallpersonnelare essentialforensuringcontinuedserviceandthoseincharge ofshort- strike inessentialpublicservices,validatedbytheCommissionthatguaranteesenforcement ofthelawitself. November 12,1991,whichenforces Lawno.146 datedJune12,1990andcontainstherulesonexercising therightto services duringstrikeactionsoastoensure continuity ofservice.Terna appliesthe NationalTrade UnionAgreement dated Relations withtherelevant tradeunionshavealsofacilitatedthecreation ofregulations regarding theprovision ofessential employees (seeindicatorLA4). processes ofparticularcompanyimportancetobemanagedappropriately. Acollectivelabourcontractisappliedtoall development andconsolidationofanefficient networkofrelationships betweenthepartiesatalllevels,allowingchange information, thatare heldinadvanceand/orperiodically. ApplicationoftheProtocol onindustrialrelations hasledtothe a systemofrelations andarrangementswhichcentre around meetingsonnegotiations,discussions,consultationand The Protocol onIndustrialRelationsisthefoundationagreement forrelations withtherelevant tradeunionsanditoutlines about anyissuesemerging atalocallevel,althoughthedifferent roles andresponsibilities ofeachsideremain quitedistinc the mainthemesregarding thelifeofCompany, includingtheanalysisofstrategicpolicyguidelinesanddiscussions quality, productive relations. Industrialrelations withintheCompanyare basedontheinvolvementoftradeunionsin As membershipisconcentratedintheleadingtradeunions,representation isnotfragmentedandthisfacilitatesgood down on2007(66.5%)and2006(68.8%). In 2008,Terna’s unionisationrateremained high(64%)compared totheaverageinindustrial sector, evenifslightly Industrial Relations paragraph “Safetyintheworkplace:acommitmenttowards on-goingimprovements” onp.137. company activities:forfurtherinformationaboutTerna’s systemsandinitiativeswithinthefiel Italians. t. 121 Social responsibility 122 Sustainability Report 2008 % values activities, whichhadpreviously beencarriedoutthrough outsourcing. In 2008,Brazilalmostdoubled itsworkforce process andnearlycompleteditsinternalisation foritscablemaintenance employees. The pursuitofoperatingefficiency doesnotrely ondirect downsizingmeasures, butononlypartial replacement ofretiring No problems ofworkforce reduction havebeenrecorded inthepastnorare currently foreseeable. Terna’s headcountisrisinginItalyandBrazil. Employment management categories,andmore markeddifferences inseniormanagementpay, thoughthegapisclosing. discrimination andsalarylevelsindicatemodestdifferences betweenmenandwomenintheoffice worker andmiddle Women are notpenalisedfrom acareer pointofview:company developmentpoliciesreward meritwithoutgender the lowernumbersofwomenleavingCompanyand significantlyhighernumbersjoiningtheCompany. The percentage ofwomenamongthetotalnumberemployeesisonincrease andthispositivetrend isaresult of EQUAL OPPORTUNITIES FORMENANDWOMEN-TERNASPA oe/oa e fbu olrwres1. 14.2 14.6 women/total netofbluecollarworkers women/total % ofwomenouttotalnumberemployees fofc okr n idemngr mn . 1.0 1.0 1.0 2.4 2.9 2.8 Office Staff Middle Managers 2.8 1.0 Executives 1.2 Salary differential men/women of office workersandmiddlemanagers(men) 2.6 1.2 % ofpromotions tomiddlemanagerorexecutiveoutoftotalnumber 3.0 of office workersandmiddlemanagers(women) % ofpromotions tomiddlemanagerorexecutiveoutoftotalnumber % ofpromotions from office workertomiddlemanageroutoftotalnumberoffice staff (men) % ofpromotions from office workertomiddlemanageroutoftotalnumberoffice staff (women) Promotions % ofmenexecutivesouttotalnumber(excludingbluecollarworkers) % ofwomenexecutivesouttotalnumber Women inmanagerialpositions men women Turnover rate-inflow(%) men women Turnover rate-outflow(%) annual %growth formen annual %growth forwomen Employment growth 029.8 10.2 .71.06 1.10 1.31 1.07 1.10 1.40 2008 . 4.8 9.0 4.6 4.2 2.5 7.3 0.1 3.8 5.2 2.1 0.3 5.3 2007 implementing development are suchthatthe Company isnotrequired toputanyparticularemphasisonrespecting humanrightsor majority oftheTerna Group’s activitiesare performedinItaly, where theregulatory framework andthelevelofcivil companies whichare basedoroperateincountrieswhere therespect forfundamentalhuman rightsisnotguaranteed.The The setofG3indicatorsonhumanrightsaimstoillustrateelements ofperformancethatachievesignificanceonlyforthose Human Rights basis ofvoluntaryactivitiesperformedbyTerna employees. climate. Theevent,however, allowedasumof80,000 euro tobedonatedsocialinitiatives,selectedlocally, alsoonthe Lastly, thethird editionoftheWe:Me initiativewasheldwithaslightlymore soberprogramme duetothedifficult economic and fencestodecoratetheParkwhichalsohousesRomaNord electricitystation. in Rome.Over100colleaguestookparteco-sustainableactivitiessuchascleaningthearea andmountinggazebos orientation intoacorporatereality. Aspecialteam-buildingeventwasalsoorganised in2008insidetheMarcigliana Reserve the mentionwasforhavingfoundawayoftransferringsportingvalues,suchasteamspirit,healthycompetitionandresults- Orizzonti d’Impresa bytheUnioneIndustrialidiRoma(award givenbytheIndustrialConfederationfornewapproaches); the initiativeandresults achieved,“Velisti... nonpercaso”wasrewarded withamentioninthePremio NOI–Nuovi tomakeuptheTernacolleagues tookpart,takingitinturns team.Forthelevelofinvolvement,visibilityprovided by involving employeeswasthesailingregatta “Velisti... nonpercaso”(“Yachtsmen... notbychance”),inwhichaboutsixty Terna donatedasumtoAi.Bi.(AssociazioneAmicideiBambini)fortotalof10,000euro. Oneoftheotherinitiatives office premises inRome,Viale Galbani,whileintheprocess ofpreparation. Inaddition,foreach persontakingpart, were alsousedtocreate theDiaryfor2009,specialeditionofAnsaPhotoBookTerna andtodecoratethenew the worldofphotographyandCinema.Theentrieswere assessedinastrictlyanonymousfashion.Thewinningpieces works were selectedbyapanelofjudgeschaired byTerna’s Chairman,LuigiRoth,andconsistingofprofessionals from through acreative activity. Entriesforthecompetition,calledCreativInTerna, includedphotos,videosanddrawings.The children washeldonthethemeofenergy transmission:th editions ofthemagazinewithusefularticles.Insummermonths,firstartcompetitionforemployeesandtheir all employees.Terna Newscancountonthesupportofanetworkcorrespondents ineveryDirection whoenrich the 2008, forexample,thebi-monthlyhouseorgan Terna Newswaslaunched, withacirculation of4,000copiesdistributedto the corporateintranet,cascadeinformationmechanism,teambriefing,andannualWe:Me convention.InJune communicationtoolswereDuring 2008,somenewinitiativesandinternal addedtothosedevelopedpreviously, suchas as theAretê Award forsocialcommunicationassignedtoTerna’s CommunicationDepartment(seeboxbelow). Internal This thrustisnotonlyevidentfrom theresults ofthe2008editionbutalsofrom certainacknowledgementsreceived such in 2007,theCompanyhasbeencommittedtowards creating newtoolswhichwouldsupportdevelopmentinthis area. integration, encouragingteamspiritandacceleratingprocesses. Eversincethefirsteditionof“PeopleSatisfaction”surv Terna recognises thefundamentalrole communication infacilitatingtheexchangeofinformation,creating playedbyinternal communication Internal of theFTSE4GoodAdvisoryCommittee, Brazilisnotconsidered acountryatethical risk intermsofhumanrights. Organization (ILO).Itisalsoworthnoting that,onthebasisofrecommendations includedin theILOwebsiteandthose regulatory frameworkguarantees respect Labour ofthemainUNdeclarationsandconventions oftheInternational Terna receives theAretê Award communication forinternal communication incompliancewiththerulesofresponsibility. the businesscommunityinparticular, andthepublicingeneral,thoseentitieswhich haveexcelledineffective collaboration withAnima,LegambienteandtheFondazione PubblicitàProgresso, aimstobringtheattentionof we offer”. TheAretê Award (inGreek, avirtuouscourseinthought,feelingandaction),promoted byPentapolisin Group. Thisachievementisallthemore importantwhen youconsiderthehighlyspecialisednature of theservice acknowledgement ofourcommitmenttowards buildingastrong identitythatisshared byallemployeeswithinthe growth”, commentedFlavioCattaneo,Terna’s CEO.“InthesetermstheAretê Award isanimportant in it,andthisisprecisely whymanaginginformationconstitutesone ofthemajorfactorsbehindoursuccessand information andcorporatevalues.“Thevalueidentityofacompanyinevitablydependonthepeoplewhowork acknowledging itscommitmenttowards creating toolsandinitiativeswhichinvolveemployeesinthecirculation of Protection oftheTerritory andtheSea,awarded Terna Communication”category, firstprizeinthe“Internal The panelofjudgesfortheAretê Award, chaired byStefaniaPrestigiacomo, Ministerofthe Environment and ad hoc management policies.Theonly countrywhere Terna operateswithits subsidiaries isBrazil,where the e aimwastoreinforce thesenseofbelongingtoCompany ey 123 Social responsibility 124 Sustainability Report 2008 The CodeofEthics,whichisfullyappliedbothinItalyand inBrazil,canbefoundontheTerna website( indicators report onthecorruptionmonitoringactivityandabsenceofepisodesatGroup level. Structure”on theModelanditsevolutioncanbefoundinparagraph on“Governance inTerna’s Profile. TheSO2andSO4 implements aseriesofpreventive measures, suchastraininginitiatives andsettingupaspecialSupervisoryBoard. Informatio by the231Organisational Modelprocedures, acontrol systemthatidentifiespotentialriskareas intheCompanyand parties andtheirmembers(seeindicatorSO6).Asregards corruption,theprovisions oftheCodeEthicsare supplemented corruption andrelations withpoliticalparties.Withregard tothissecondpoint,theCodeexpressly forbidsgrantstopolitic In itsrelations withinstitutions,Terna abidesbytheprovisions ofitsCodeEthics,whichspecificallydealswiththeiss behaviour isacknowledgedobjectively. practices, aswelltheabsenceofsignificantadministrativeorjudicialsanctions,are witnesstothefactthatcorrect indicators, whichhighlighttheabsenceoflegalactiontakenforunfaircompetition,antitrustissuesandmonopolistic operates, Terna placesgreat importanceoncompliancewiththeapplicablelaws and regulations. TheSO7andSO8 In general,andalsowithregard toitsrole ofserviceprovider tothecommunityandregulatory contextinwhichit When anelectricitystationisbuiltoccupyingaconsiderablylarger area ofland,Terna normallypurchases thenecessaryland. were onlynecessaryinabout20%of thesecases. which involvedtherightofpassageforpowerlinesoverlandownedbynearly3,000people,butcoercive measures has tobeenforced. Forexample,inthethree-year periodfrom 2005to2007,nearly300kmofpowerlineswere built When itisnotpossibletoreach thedesired, amicableagreement, ashappensinasmallminorityofcases,expropriation the landisreturned totherespective owners. remains useablethoughlimitedbythephysicalspace occupiedbythepylons;iflinesare subsequentlydemolished, electricity lineacross privateland(buildingpylons,overhead conductors,underground cables).Fortheowner, theland follows aprocedure leadingtoanamicableagreement whichincludesoffering aone-off paymentfortherighttopass Consolidated Text forLandExpropriation) tofollowaspecificprocedure forlandexpropriation. Nevertheless,Terna normally pylon. To obtaintheuseofland,Terna isauthorisedbylaw(Lawno.1775of1933;Presidential Decree no.327/2001, of land(usuallyagriculturalland)coveringasurfacearea ranging from approximately 30to250square metres forevery Building newelectricitylinesdoesnotimplytheneedtophysicallymovecitizensorentire communities,butonlytheuse approach, andobjectives”inthechaptersonresponsibility fortheelectricityserviceandonenvironmental responsibility. grid developmentinvestmentprojects. Informationonthesepointscanbefoundintheparagraphs“Context,management fundamental stakeholder, bothonagenerallevelasuserofTerna’s service,aswellonalocallevelwhendirectly affected When Terna operatesunderconcessionagreements, itprovides aserviceofinterest tothecommunity. Society, therefore, isa Society conventions) alsoinrelation toTerna’s potentialactivitiesincountriesotherthanthosewhere itcurrently conductsbusines referenceswhile theCorporateSocialResponsibilityDepartmentmonitorsdevelopmentofexternal (e.g.international many aspectsofhumanrights,theAuditDepartmentisentrustedwithoverseeingcorrect applicationoftherelated rules, the HumanResources andOrganisation Department.SinceTerna’s CodeofEthicsneverthelessdealswithandreiterates Although nosuchproblems currently exist,theresponsibility formanaginghumanrightsrelated issuesgenerallylieswith human rightsandtheenvironment. the world.According totheCodeofEthics,eachsubsidiarymustadopthighestlocalstandards intermsofrespecting setting upabenchmark,animpassableboundary, forallthesituationsitmaycomeacross whenoperatinganywhere in Lastly, itshouldbepointedoutthatinitsCodeofEthicsTerna hasembracedtheUNGlobalCompactPrinciples,thus spread theknowledgeof theCodeofEthicstoallemployees. awarenessInternal israisedthrough traininginitiativesthat address theimplicationsof231Organisational Modeland Organisational responsibility forthecorporatesocialresponsibility issuesdiscussedinthissectionlieswith: on “InitiativesintheCommunity”). of itsactivitiesandawaycontributingtothecivildevelopment ofthecommunitiesinwhichitoperates(seeparagraph Terna alsobelievesthatdefiningandimplementinginitiativesofsocial,humanitarian culturalvalueare anintegralpart while itsextensiontoBrazilisstillintheprocess ofimplementation. The 231Organisational Modelisalsoavailableinthesamesection.Atpresent, theModelisappliedtofullinItaly, section. the InvestorRelations/CorporateGovernance • the departmentsthatsupervise in-companycirculation the ofchangestoregulations andlaws provide informationon • AuditDepartment,asregards the monitoring andimplementingtheprogramme control ofinternal andasthereference • Company SecurityDepartment; the • Department, CompanySecurity Department. their correct application:theRegulatory Affairs Department,LegalandCorporateAffairs Department, InstitutionalAffairs point fortheapplicationof 231Organisational Model; www.terna.it ue of ) in by s. al n attm 62 03 42 0 24 24 80 0 3,475 80 3,555 3,451 30 3,531 107 30 107 3,495 0 3,602 3,465 3,572 210 26 80 210 3,524 3,436 26 3,734 3,516 3,498 3,708 107 of employees Total number 3,362 3,469 part time full time 210 relationship 3,358 3,568 fixed-term contract permanent contract By contracttype contracts whichare officially fixed-term,butusuallybecomepermanentoncetheprofessional trainingperiodisover. In Italy, thegrowth inthenumberofemployees withfixed-termcontracts(from 3.9%to4.7%)reflects theuseoftraining completed in2008. and theinsourcing ofpreviously outsourced maintenanceactivitiesonlinesandoperations(O&M)thatwere almost The riseinthenumberofGroup employeesin2008chieflyreflects theconsolidationoffunctionsTerna Participações subordinate employees.In2008theytotalled 41,in2007,25and2006,24. The Braziliancompaniesmakeuseofoutsourced workerswho are notdirectly employedbuthavethesamerightsas workforce” as“supervisedworkers”.Theseworkersare excludedfrom thepersonnelfigures statedin the table. employees, the15peopleare includedinTerna’s activitiesforasetperiodandare includedintheG3definitionof“total have anemploymentcontractwithagencyproviding employmentservicestoTerna. Althoughtheyare notcompany pointed outthatasatDecember31,2007,there were 15 temporaryworkersinTerna SpA(20in2007and72006),who The tablebelowprovides thenumbersandbreakdown ofGroup employees.Inorder tohavedetailsinfull,itshouldbe Boundary: Group Total workforce byemploymenttype,contractandregion LA1 Labour practicesanddecentwork G3 socialperformanceindicators By typeofemployment (1) Training contracts. (1) 93 93 0.%9.%9.%100 93 93 100.0% 99.3% 99.3% 100.0% 99.1% 99.2% 100.0% 98.9% 98.9% 100.0% 99.3% 99.3% 100.0% 96.2% 96.3% 100.0% 95.3% 95.6% ru tl rzlGopIayBai ru tl Brazil Italy Group Brazil Italy Group Brazil Italy Group 6 6 3 3 93 0 39 39 0 133 133 0 166 166 .%07 .%08 .%00 .%07 0.0% 0.7% 0.7% 0.0% 0.9% 0.8% 0.0% 0.7% 0.7% .%47 .%37 .%00 .%11 0.0% 1.1% 1.1% 0.0% 3.8% 3.7% 0.0% 4.7% 4.4% 2008 072006 2007 125 Social responsibility 126 Sustainability Report 2008 Boundary: Group Total byagegroup, genderandregion numberandrateofemployeeturnover LA2 sited projects tothecuttingoftrees beneathelectricitylines. of full-timeemployees(FTE-Full-TimeEquivalents)relative toTerna’s tendercontractsin2008,rangingfrom large-scale of thecontractsandvariabilityinusemanpowerwith of Terna As regards 2008,thefigures relating tothe WORKFORCE BREAKDOWNBYCATEGORY employees according totheprofessional categoriesinuseItaly, whichhavealsobeenusedtoclassifyBrazilianpersonnel. To facilitatethereading ofsometheworkforce compositionindicators,thetablebelowprovides abreakdown ofGroup oa ubro mlye .%36 96 .%44 63 .%50 28.3% 5.0% 5.3% 15 16.3% 169 4.4% 184 80 4.6% 3,475 13 19.6% 3,555 3.6% 4.1% 107 152 Total numberofemployees 165 3,495 3,602 21 210 126 3,524 Turnover rates 147 3,734 Total numberofemployees during theyear Employees leaving exclusively duetoretirement. rateshould,therefore, Theturnover beconsidered assomethingphysiological. Employees leavingtheCompanyare mainlyconcentratedin theupperagebracketsandtheiremploymentendsalmost Total 3,5 1,067 Workers 1,907 Office Staff 485 Middle Managers 65 Executives (1) oe 3761 31 3 1 10 12 12 13 7 146 2 159 158 8 2 171 16 3 11 4 8 18 136 144 10 6 5 139 155 6 9 11 3 15 7 17 7 119 99 13 134 11 102 6 21 13 32 over 50yearsold between 30and50yearsold under 30yearsofage women men oe .%02 .%03 .%25 .%03 5.7% 22.6% 22.6% 0.3% 4.3% 4.7% 0.4% 4.6% 5.0% 1.9% 2.5% 3.8% 0.2% 13.8% 3.8% 0.2% 0.2% 0.5% 4.1% 3.9% 0.5% 0.3% 5.0% 4.4% 3.9% 7.5% 5.6% 0.1% 14.0% 2.8% 3.4% 0.2% 0.3% 2.8% 0.3% 3.7% 0.4% 2.8% 0.5% 6.5% 0.2% 10.3% 0.6% 0.4% 0.9% over 50yearsold between 30and50yearsold under 30yearsofage women men here; thismethodcompares thenumbersleavingwithnumberofemployees onDecember31oftheprevious year. The turnover ratesfortheyearspriorto2008differThe turnover from thosepublishedinrecent yearsbecausethemethodusedtocalculate were calculatedforthefirsttimeandfigure stoodat1,145.Thisnumber takesintoconsiderationtheduration (1) ru tl rzlGopIayBai ru tl Brazil Italy Group Brazil Italy Group Brazil Italy Group 2008 number ofemployeesincontractcompaniesinvolvedworkonbehalf in thecontracts:itis,therefore, anestimateofthenumber 072006 2007 tl rzlGroup Brazil Italy 4 1 3,734 210 24 1 2,026 119 67 2 7 1,134 76 3498 13 2008hasalsobeenapplied of nolessthanthirtydays. organisational changeinvolvesatransferforthe employee;inthiscasetheworkermustbeprovided with a writtennotice the priorinformationisprovided atacollectivelevel.Priorinformationneedonlybesent toindividualemployeesifthe to provide aglobalvisionofthe organisational project, sothatremarks andproposals maybesubmitted. Inthisphase, discussions withtradeunions, tobeconcludedwithinthree months.TheCompanymust supplysufficient documentation In theeventofsignificantorganisational changes,thetradeunionagreements inforce withinTerna provide for preliminary twenty-five dayspriortoanybindingagreement. of theCompany(asenvisagedbyrelevant laws),theworkers’representatives mustbeinformedandconsultedatleast According tolegalprovisions, intheeventofmergers, acquisitionsorothersignificantchangesintheownershipstructure Italy Boundary: Group including whetheritisspecifiedincollective agreements Minimum noticeperiod(s)regarding significantoperational changes, LA5 100% ofemployeesare covered bycollectivebargaining agreements. Boundary: Group Percentage ofemployeescovered bycollectivebargainingagreements LA4 contract. Life assurancewasintroduced in2007.Allthesebenefits are availabletoworkersandassistantswhatevertheirformof Additional healthcare isprovided andthisincludesdentaltreatment. Mealvouchersare alsoprovided. Brazil categories. Disability benefitsare regulated byLawandare extendedtoallemployees.Terna provides improved conditionsforcertain would notbeincluded. with apart-timecontractortrainingcontract,althoughotherformsoffixed-termcontracts,whichare notcurrently used, Once theprobation periodhasbeencompleted,thesebenefitsare availabletoallemployees.Thisalsoincludesemployees The followingbenefitsare offered toallemployees: Italy The benefitspackageoffered toemployeesinItalydiffers from thatinBrazil. Boundary: Group to temporaryorpart-timeemployees,bymajoroperations Benefits provided forfull-timeemployees thatare notprovided LA3 staff canteenormealvouchers. • loansforthepurchase subsidised ofafirsthomeorforseriouspersonalcircumstances; • more benefitsthanthoseprovided favourablematernity underLaw; • leisure associations; • forout-of-workinjuries; insurance • pensionscheme(voluntarysubscription); supplementary • additionalhealthcare; • 127 Social responsibility 128 Sustainability Report 2008 and totalnumberofwork-related fatalities byregion Rates ofinjury, occupationaldiseases,lostdaysandabsenteeism, LA7 elections fortheWSRsatcentraloffices inRomewillbeheldOctober2009. In June2009,electionswillbeheldtochoosethenewWSRsresponsible foralltheTerna sitesinItaly. Conversely, the as anyrepercussions duetotheintroduction ofnewtechnology. charge ofhealthandsafetyissuestoexaminesuitabilitypersonalprotection devicesandtrainingprogrammes, aswell identification ofpreventive measures. Atleastonceayeartheytakepartinmeetingwiththeemployersandthose The Representatives mayasktheCompanytoperforminspectionsandtheirviewsare soughtonriskassessmentandthe Their role istomonitortheapplicationofworkers’healthandsafetyregulations. sites. – ofWSRs,Worker SafetyRepresentatives, thenumberofwhichvariesaccording tothenumberofemployeesandwork The Lawprovides fortheappointmentbyelection–onpartofallemployees,whichare therefore 100%represented Boundary: Italy and safetycommitteesthathelpmonitoradviseonoccupationalhealth Percentage oftotalworkforce represented in formaljointmanagement-workerhealth LA6 The contractdoesnotincludeobligationsregarding theneedtoadviseemployeesaboutorganisational changes. Brazil The rateofoccupationaldiseaseisnotavailable,sincetheir occurrence isalmostnegligible. on thewaytowork. The fatalaccidentthatoccurred in2006wasduetoaroad accident probably causedbyasuddenattackofillhealthwhile voltage linesinValmontone nearRome.Ajudicialinvestigationwasopenedontheaccident. During 2008,there wasafatalaccidentinvolvingTerna employee,whilehewasperformingmaintenanceworkon high- Italy Boundary: Group INJURIES AT WORK-TERNAEMPLOYEES INJURIES AT WORK-CONTRACTCOMPANY EMPLOYEES n.a.: notapplicable. 8 Number ofaccidents 1.2 Injury Rate The causesforabsencefrom leave,marriage leave,studytradeunionactivity, workincludedmaternity (1) otherpaidle Absentee Rate 329.1 Lost DayRate 1.7 Injury Rate Number of accidents 50 50 Number ofaccidents for 2006and2007differ slightlyfrom thosepublishedin2007followingcorrections totheoriginal data. of which fatal 1 of whichfatal1 of which fatal 2 of whichfatal 2 (1) 9,442 10,3 9,442 2008 2008 .. n.a. n.a. 3 2.14 1.45 2 5. 361.5 51.2 0 1 0 0 0 ..n.a. n.a. 4 56 40 ave andsuspensions.Thedata 072006 2007 2006 2007 111,609 81 but alsofortheirfamiliesanddependents. Medical treatment costsrelated toillnessesare partlycovered byFISDEnotonlyforitsmembers (associatedemployees), on principalhealthrisks.Topics discussedincludethefollowing: FISDE organises variousprevention campaignsforitsmembersthatincludepreventive check-ups andinformativesessions Integrativo SanitarioperiDipendentidelGruppoEnel Terna’s employees(excludingseniormanagers)are automatically includedinthesupplementaryhealthfund,FISDE( Boundary: Italy or communitymembersregarding seriousdiseases in placetoassistworkforce members,theirfamilies, Education, training,counselling,prevention andrisk-control programmes LA8 The definitionsusedare thoseprovided LaborOrganization bytheInternational (ILO): Definitions group level,consideringthatBrazilianworkersrepresent only5%ofthetotal. Details regarding personnelabsencesare notavailable;theincidenceofthisphenomenonisneverthelessmarginal ata could beattributedtoTerna. During thethree-year periodexamined,there were noaccidentstocontractcompanyemployeeswhere responsibility In thethree-year period2006-2008there were norecorded injuriesatwork. Brazil could beattributedtoTerna. During thethree-year periodinvestigated,there were noaccidentstocontractcompanyemployeeswhere responsibility number ofaccidents. of hoursworkedwasreduced incorresponding fashioninorder toobtainadenominatorthatwashomogeneouswiththe figures are tobeconsidered asindicative:inthisfirstyear, onlyapartoftheconstructionsiteswere inspected;thenumbe The accidentfrequency rateforemployeesincontractcompanieswascalculatedthefirsttime2008.Theinjury disability. • eyediseases; • cardiovascular diseases; • tumours; • alcohol; • smoking; • Absentee Rate • Lost DayRate • Rate Injury • mlye e e e Yes Yes Yes No Yes Yes Yes No Families ofemployees Employees Beneficiaries EuainadTann oneln ikpeeto Treatment Riskprevention Counselling EducationandTraining period, multipliedby200,000. This isthenumberofdaysabsenceduetoillness,strikesandinjury, outofthenumber daysworkedforthesame calendar daysandare countedfrom thetimewheninjuryoccurred. This istheratiobetweendayslostduetoinjuryandhoursworkedinyear, multipliedby200,000.Thedaysare multiplied by200,000(equalto50workingweeks40hours,100employees). This isthenumberofinjuriesinvolvingatleastoneday’sabstentionfrom workdividedbythehoursworkedinyear, ). Fondo r 129 Social responsibility

132 Sustainability Report 2008 Brazil Italy Boundary: Group Average hoursoftrainingperyearemployeebycategory LA10 Boundary: Group and otherindicatorsofdiversity per categoryaccording togender, agegroup, minoritygroup membership bodiesandbreakdown ofemployees Composition ofgovernance LA13 BREAKDOWN OFTHEBOARDDIRECTORSTERNASPA Total hoursperhead Workers Office Staff Middle Managers Executives reporting to theCEOismadeupofeleven people,2ofwhomare women(18.2%).Nofirstline managerisagedunder Within theorganisational structure ofTerna SpAasat December 31,2008,thefirstlineofexecutivesandmanagers 33.3% Over 50yearsold 66.7% Between 30and50yearsold 0.0% Under 30yearsofage 0.0% Women 100.0% Men In brief,thedistributionaccording toageandgenderofitsmembersasatDecember31isshowninthefollowing table. intheFinancialStatementsfor2008onp.283andfollowing. Corporate Governance, The compositionoftheBoard ofDirectors oftheParent Company, Terna SpA,iscarefully displayedintheReporton (1) Thefigure doesnotincludethetraininghourscarriedoutatwork. number ofemployeesrepresents about5%oftheGroup total. The recording oftraininghoursperheadfortheemployeesinsubsidiaryTerna Participaçõesstartedin2008.The growing varietyandcomplexityofexistingtechnicalskills. the endof2005:thishasledtocompanyrethinking itstraininganddevelopmentsystemssoastoadaptthemthe The increase indicatesareturn tonormaltrainingmanagementfollowingtheacquisitionofgridoperatoractivitiesat at highelevations,safeoff-road driving,updatingonnewLawrequirements). technical workersandalsoinrelation tovarioustrainingprogrammes aimedatsafetyintheworkplace(earthing, working Trends intheaveragenumberoftraininghourshavedisplayedageneralincrease inthelasttwoyears,particularlyfor Total 53 hoursperhead 6 Workers Office Staff 34 Middle Managers 34 Executives (1) 2008 2008 5 735 37 55 5 38 56 5 522 25 100.0% 100.0% 100.0% 0.0% 0.0% 0.0% 3 31 38 60.0% 60.0% 60.0% 335 43 0.0% 0.0% 0.0% 40.0% 40.0% 40.0% 072006 2007 072006 2007 2008 111 60 88 11 okr .. ns .. n.s n.s. n.s. n.s. Workers 1.56 1.06 1.06 Office 1.07 Staff n.s. 1.10 1.10 1.10 Middle Managers n.s. 1.44 1.31 1.40 Executives RATIO BETWEENBASICSALARIESOFMENANDWOMENACCORDINGTOCATEGORY Boundary: Group Ratio ofbasicsalarymentowomenby employeecategory LA14 BREAKDOWN OFGROUPEMPLOYEESACCORDINGTOGENDERANDAGE rzl1. 0626.3 20.6 14.8 9.3 9.8 9.7 of which: 10.2 Brazil 10.2 10.5 of which: Italy Group (1) As regards seniormanagers,thechangebetween2007and2008wasduetoonlywomanmanagerleaving.Inshe (1) The ratioisnotsignificant whenreferring toworkersinItalyandBrazil(theyare allmen)andforseniormiddl (1) The tablebelowprovides thebreakdown oftheGroup’s totalemployees. obligation) withagreater incidenceofthosefrom protected categoriesjoiningthecompanystaff. some employeegroups, suchasseniormanagers,whonumbered 3.4%asatDecember31,2008), upto7%(generallaw which stipulateagradualincrease intheshare from theprotected categories(calculatedaccording tocriteriathatexclude that applytoTerna (inparticularMinisterialDecree datedMarch 21,1996andMinisterialDecree datedMay15,2000) December 31,2008stoodat120(109in2007,1082006and1112005).Thesefigures complywiththelawprovisions When consideringpersonnelcomingfrom theprotected categories(e.g.thedisabled),figures referring toItalyasat consisting oftheGeneralDirector andthosereporting directly tohim(7people). As atDecember31,2008,there were nowomeninthetopechelonsof theBraziliansubsidiaryTerna Participações, thirty; 63.6%are agedbetweenthirtyandfifty36.4%are over50. .. notsignificant. n.s.: okr . . 0.0 0.0 14.0 - Workers 13.0 0.0 14.4 12.0 - Executives 14.7 14.5 13.1 15.4 15.0 - Workers - Office Staff - MiddleManagers - Executives - Office Staff - MiddleManagers and aresidual categorywiththerest ofthepersonnel. personnel incategoriessimilartoItaliancategories.Intheyearsprior2007,highestcategorywasrepresented byExec manager inTerna Participações.Thefigures for2007cannotbeproperly compared withthosefrom previous yearsduetothenew figures cannot,therefore, beconsidered ascompletelycomparableovertheperiod.Itwasnotconsidered importanttocalculate In theyearspriorto2008inBrazil, office-staff categoryincludedthoseemployees whowere classed asmiddlemanagersin (1) (1) (1) (1) 2008 442. 25.3 25.0 27.8 10.0 24.4 15.4 Percentage incidenceofwomen 2008 . . 0.0 0.0 100.0 0.0 100.0 0.0 072006 2007 072006 2007 Italy vr5 er l 114. 41.3 41.3 8.0 41.1 10.4 12.7 over 50yearsold between 30and50yearsold under 30yearsofage Group vr5 er l 431. 21.3 16.8 25.0 14.3 41.8 29.9 7.6 30.0 42.1 over 50yearsold 42.7 between 30and50yearsold 9.8 under 30yearsofage Brazil 11.6 over 50yearsold between 30and50yearsold under 30yearsofage Italy (1) 2008 Percentage breakdown byagebracket . - - 624. 50.7 48.3 46.2 575. 53.7 53.3 55.7 50.6 48.1 45.7 e managersinBrazil(onlytwowomen). 2008 1.23 1.14 1.23 ..n.s. n.s. ns n.s. n.s. utives, followedbyDirectors Brazil 072006 2007 072006 2007 figures for theGroup. 2008.TheBrazilian was theonlysenior classification of 133 Social responsibility 134 Sustainability Report 2008 Boundary: Group and measures takentocontributetheeliminationofchildlabour Operations identifiedashavingsignificantriskforincidentsofchildlabour, HR6 Human Rights Boundary: Group Percentage andtotalnumberofbusinessunitsanalysedforrisks related tocorruption SO2 Society Brazil Italy Boundary: Group of indigenouspeopleandactionstaken Total numberofincidentsviolationsinvolvingrights HR9 risk assessment ofTerna SpA: • specificAuditReportsonTerna SpAanditssubsidiaries; • The findingswere includedinthefollowingreports: by theAuditDepartmentwith regard toallareas ofcorporaterisks,includingthoserelating tocorruption. In theperiodfrom 2006to 2008, theTerna Group (100%ofcentral departmentsandsubsidiarycompanies)wasexamined peoples haveeverbeenrecorded. establishing andimplementingBrazilianpoliciesregarding theirnative peoples.Noviolationsoftherightsindigenous Corporate conductissubjecttomonitoringbyFUNAI( Indicator notapplicable. of Terna Participaçõesasaconditionfortakingpartinbidsbuildingnewlines. standards adoptedbytheParent CompanyTerna SpA.Acommitmentnottousechildlabourisalsoexpressly required procurement procedures andselectionofsuppliersinaccordance withtheprinciplesofCodeEthicsand activity isalsounderwayintheBrazilianProcurement Departmentinorder toensure evenclosercompliancewiththe company departmentthatalsotookintoconsiderationtheviolationofhumanrightswithreference tochildlabour. Intense Company’s AuditDepartmentconductedaSelfRiskAssessmentanalysisformappingpotentialriskspresent ineach 2008, aspartoftheworktoextend231Organisational ModeltoitssubsidiaryTerna Participações,theParent control overthemperformedbyTerna Participaçõesmeant thattheideaofusingchildlabourwastotallyexcluded.During improving efficiency. Thetechnicalandspecialistnature oftheother activitieswhichusedtobeoutsourced, andthedirect to beoutsourced tocontractcompanieswere almosttotallybrought in-housewithaviewtowards rationalisingcostsand personnel directly employedbytheCompany. During2008alltheengineeringandlinemaintenanceactivitieswhichused With regard toBrazilianactivities,childlabourisnotconsidered aspecificriskthatneedsmonitoringwhenconsidering at thesuppliers’production unitsoroperatingheadquarters”. principles ofequaltreatment andnon-discrimination,protection ofchildlabour)andthepossibilitycarryingoutchecks compliance withspecificsocialobligations(e.g.measures thatguaranteeworkersrespect oftheirfundamentalrights, contractual clausesmustbeincludedthatprovide forthefollowing:self-certificationfrom thesupplierdeclaringhis particular, theCodeofEthicsstipulatesthat“withsuppliersfrom countriesdefinedas‘atrisk’byrecognised organisations, Compliance withthelawsandTerna’s CodeofEthics • for thepurposes ofthe231Organisational Model(see Glossary);updatedin2004so astoallowlistingonthestock Fundação NacionaldoÍndio is givenconsiderableimportanceinrelations withsuppliers.In ), the government bodyentrusted with ), thegovernment Boundary: Group sanctions fornon-compliance withlawsandregulations Monetary valueofsignificant finesandtotalnumberofnon-monetary SO8 Boundary: Group antitrust, andmonopolypracticestheir outcomes Total numberoflegalactions foranti-competitivebehaviour, SO7 Boundary: Group politicians andrelated institutionsbycountry Total valueoffinancialandin-kindcontributionstopoliticalparties, SO6 Boundary: Group Actions takeninresponse toincidentsofcorruption SO4 employees (p. 154). compliance with lawsorregulations. Inthe“Table ofindicators”section youcanfindfurtherdetails aboutlitigationwith During theperiod from 2005to2008,no administrativeordefinitive judicial finesorsanctionswere recorded fornon- 2008, nolegalproceedings were concluded. antitrust issuesandmonopolisticpractices.There are nocases ofpendinglitigationand,duringtheyearsfrom 2005to Terna isnotinvolvedinanyactionsbrought againstGroup companies inItalyorBrazilwithregard tounfaircompetition, Accordingly, nopoliticalpartiesortheirmembershavebeengiven The CodeofEthicsinforce inTerna anditsBraziliansubsidiaries expressly forbidsgrantstopoliticalpartiesortheirmemb with aviewtowards theISO9001certification. checks ontheirprogress inrelation tocompliancewiththe231Organisational ModelandtheQualityManagementSystem, In additionsince2008,theauditactivitiesinBrazilhavebeensupportedbyanauditorinsideTerna Participações who As atDecember31,2008,there were corruption. nopendingcasesoflitigationconcerning there were noverifiedreports ofbreaches totheCodeofEthicswithregard tocorruption. • there were nodisciplinarysanctionsarisingfrom incidentsofcorruption; • corruptionwere no casesoflitigationconcerning concluded; • Just asintheprevious twoyears,in2008: are inItalyorabroad. Organisational Modelinlinewiththedecisiontoextend231Organisational Modeltosubsidiarieswhoseheadoffices within allthedepartmentsofRTL andTerna Participações.Thiswasdecidedwithaviewtoimplementingthe231 During 2007andthefirsthalfof2008,amappingprocedure wasperformedonallprocesses potentiallyatriskofcorruption, control annual report onTerna SpAaslaiddowninthe231Organisational Modelforthepurposeofpreventing corporate • offences andpreventing thecorruptionofpublicofficials. • of additionalchangesinlegislation; integration organisational structure andforchangesinlegislation2007(completionatthestartof2008)view exchange; in2005,viewofintegratingthebusinessformerGRTN (nowGSE);in2006forthenewpost- corporate riskassessment(updatedannuallysince2004,theyearitwaslisted); financialcontributionsorsupportofanon-financialnature ers. . 135 Social responsibility 136 Sustainability Report 2008 Development andmanagementofhumanresources Additional information right direction andprovide aresponse toemployees’recommendations. development (seetherelated paragraphonp.139-140)andtheimprovement communicationsare ininternal goinginthe bonus systemworks.Initiatives suchasthelaunchofGPS,trainingprogrammes devotedtomanagerial improvement inthefieldofsupervisor-assistant relationships, informationaboutthe assessmentcriteriaandonhowthe Satisfaction”, whichhasnow becomeanannualevent.Inparticular, thesurveyhashighlightedcertain areas of The developmentofmanagement systemsalsotakesitscuefrom theresults climatesurveycalled“People oftheinternal “productivity/quality incentive” linkedtotheachievementofspecificproductivity andqualityobjectives directly connected • “corporate profitability” linkedtothecompany’s generaltrend andispaidtoallpersonnel,except seniormanagement; • The bonusispartofvariablesalarypackageandstructured around twoitems: incentive. projects, Terna signedanagreement withthetradeunionswhichcreated acompanyprofit bonusasaproductivity Recognising theimportanceoffullyinvolvingitspersonnel in thefulfilmentofitsproductivity andqualityprogrammes and environmental andsocialperformanceare formulatedtotieinwith theBalancedScorecard model. to thelevelofachievementcompanyandindividual objectives. Companyobjectives,includingthoserelating to MBOs (ManagementByObjectives),reserved forthetop echelonsofthecompanymanagement,linksindividualbonuses Performance objectiveswithanannualperspectiveprovide the basisofotherschemeswithvariablesalarybonuses.The key positionsintheCompany. Option Plan.The2008-2010Plan,linkedtocompanyobjectives,hasbeenlaunchedfortheTop Managementwhohold thosetopmanagerswhowereperiod 2005-2007actuallyclosedin2008.Thisplanconcerned notinvolvedintheStock The “cash”Long-termIncentiveplans(LTIs) provide aresponse tothesameends.ThePlanrelating tothethree-year with aviewtoachievingitsstrategicobjectives. itself withanimportanttoolforbuildingtheloyaltyofthosesenior finish in2010butthenextendedto2013).TheadoptionofthisPlanallowedtheCompany, amongotherthings, toprovide management are thebeneficiariesofaStockOptionPlan whichwasestablishedinDecember2005(initiallyintendedto The measurement ofperformanceisalsolinked to thepaymentofvariablesalarybonuses.Inparticular, Terna’s top and managementpointofview, includingtheprincipalenvironmental andsocialperformanceobjectives. based ontheBalancedScorecard model.Itusesthistomonitortheprogress ofstrategicobjectives,from aneconomic The measuringofperformanceisalsoassignedtoothertools.Terna setupastrategiccontrol systemsomeyearsago to monitorandguidetheirgrowth. a trainingprogramme. Repeatingthisassessmentprocess onpeople’sperformanceanannualbasismakesitpossible directing approaches andhighlightingstrengths andareas forimprovement andtriggeringdevelopmentactions,suchas carried outbythelinemanagerandvalidatedhissuperior, includesafeedbacksession,fundamentalfeature for instrument acknowledgestheoutcomeofevaluationandensures thattheyremain traceableovertime.Theevaluation individually toeachpersoninvolved,containstheobjectivesbeachievedandexpectedapproaches; thesame organisational approaches thatare setupinorder toachievethem.Aspecifically-developedITsystem,thatisaccessible that includestwoaspects:thefirstiseffective the achievementofestablishedobjectives,thesecondconcerns all seniormanagers,middlemanagersandasectionoftheoffice staff. TheGPSisbasedonadefinitionofperformance phase, theapplicationofGPSinvolvesawiderangeemployeeswithmanagerialandprofessional responsibilities: person makesaswellthedevelopmentofthiscontributionthrough theenhancementoftheirprofessional skills.Inthis The GPSaimstosteertheindividualtowards achievingthecompany’sobjectives;itmeasures thecontributioneach training campaignaimedatallthepersonnelinvolved. system istheGlobalPerformanceSystem(GPS),whichwasdesignedin2008andcomingintouse2009with are partofthisframework,suchasBalancedScorecards andtheMBO(ManagementByObjectives),butheartof actions are allfundamentalelementsinthemodel.Anumberoftoolsthathavealready beenintheCompanyforawhile The definitionofobjectivesandtheexpectedapproach, theevaluationofresults, feedbackanddevelopmenttraining Terna’s humanresource developmentandmanagementsystemcentres onperformanceasanindicatorforsteeringgrowth. to theemployees’workingactivityandispaidworkers office staff. managersinthemostimportantpositionsCompany Safety intheworkplace:acommitmenttowards on-goingimprovements • clear • Within thiscontext,Terna’s attentiontowards safetyiscentred onthefollowing aspects: excluded from anydiscountingprocesses appliedin contractbidsandintheassignmentoftendercontracts. risk analysismustbeperformedbyanexpert.Thecostsrelating totheeliminationormitigationofinterference risksare alltheoperationsthatmakeupworkprocesssubcontracting companies,andmustconcern onconstructionsites.This of eachindividualactivityandinparticularatthosewhere there maybeinterference withworkdonebycontractingand to carryoutananalyticalassessmentofhealthandsafetyrisksforworkers.Thismustlookatthespecific that are contractedorsubcontractedout.Oneofthemostimportant aspectsofthenewDecree therequirement concerns responsibility from theemployerdownwards, safetyprocedures andequipment, supervisionofactivities,includingactivities measures inEurope. Companieshaveobligationsonvariousfronts: health andsafetyintheworkplace”)cameintoforce on May15,2008,ithasbecomeoneofthemoststringentseries regarding safetyhasalwaysbeenquitestrictbutsincetheLegislativeDecree no.81/2008(“ConsolidatedActregarding Terna’s commitmenttowards safetyshouldbeseen within the website where candidatesinterested inworkingforTerna canmakeanopenapplication. to attractnewstaff through contacts with universities,takingpartinjobmeetingsandcreating aspecificarea onthe attract newonesfrom outsidewhennecessary. Inparticular, theCompanyiscommittedtowards improving itsowncapacity Lastly, asregards itsrecruiting policies,Terna continuestoinvestinorder toretain well-qualifiedresources aswellto •an commitment topromote accidentprevention forallemployees, includingthosefrom contractcompanies; training andcollaborationwiththecompetententitiestoachieve on-goingimprovement. There iaalsoaclearly-stated indicates thepolicy-guidelineswithinCodeofEthics,drawing attentioninparticulartotheimportanceofcontinuous on safetyintheworkplace,whichisanintegralpartofintegrated Quality-Environment-Safety ManagementSystem, because policies,procedures, technologiesandknowledgecontribute towards riskawareness andprevention. Thepolicy Ethics, whichidentifiesthefundamentalprinciplesto everyone,ateachleveloftheorganisation, mustadhere to, and onwork-sites;thestructure alsocarriesouton-the-spotinspections intheworkplaceandonwork-sites.Inlinewith supervisors inthevariousterritorial offices (TOASupervisors,Safety, Prevention and Safeguard ManagersandRSPPs) the standards andcheckonapplication procedures, andanarchive oftestprogrammes andtheirrelative results; authorities). Through thisportalitisalsopossibletogainaccessanonlineadvisory supportservicetohelpinterpret relating tosafetyintheworkplace (regional andnationalprovisions, technicalstandards issued by thecompetent Safety &Securityportal fteCFTop Employers of theCRF ofthebestcompaniesinfirstItalianedition one Terna – Pontiggia (SDABocconi). provided byMarioD’Ambrosio (AIDP),FrancoFontana(LUISS),LucaSolari(UniversitàdiMilano)andAndrea Contributions tothepublication,whichcontainsallpress reports performedinsidethecompanies,were sponsored byAIDP(AssociazioneItalianaperlaDirezione delPersonale)andtheLUISSBusinessSchool. Top EmployersItaly2009”published byFrancoAngeliand was alsowrittenabouttheresearch, called“CRF– and investingininnovation:thelastthree criteria,inparticular, waswhere Terna cameoutparticularly well.Abook The assessmentcriteriaincludedthecorporateculture, workingconditions,socialcommitment,talentdevelopment company lifeinshortpress reports whichsupplementedthegeneralprofile andevaluationofeachcompany. company andinterviewedtheHumanResources Director, amiddlemanagerandprofessional, whoeachdescribed wassenttoeachcertified The methodusedtofindoutinformationwashighlyinnovative:aneconomicjournalist of humanresources andbecometheonlyoneseligibletoexhibit“Top Employers”brandlabel. country CRFpublishesanannualreport oncompanieswhichcanbeconsidered asexcellentintheirmanagement have beenusingsince1991toanalyseandcertifyTop Employersintencountriesandthree continents.Ineach CRF, togetherwithAccenture, developedamethodaccredited bytheDutchMinistryofEconomy, whichthey system prepared bytheDutchagencyCRFandusedforfirsttimeinItaly. In 2009,Terna wasincludedamongthetwenty-eightbestcompaniestoworkforinItaly, onthebasisofaranking organisational structure inchargeofsafety policies onsafety . Theimportanceofensuringthephysicalsafetypersons isreferred toinTerna’s Codeof , withinthecompany’sintranet,containingcompleteandup-to-date which hasacentraloffice (CompanySecurityDepartment),local context ofexistinglegislativeprovisions training,riskanalyses,theidentificationofchain archives onlegislation . Italianlegislation 137 Social responsibility 138 Sustainability Report 2008 TRAINING HOURSRELATING TOWORKERS’HEALTH ANDSAFETY 18001 standard. implemented andthatthere isa management systemandofprocedures inlinewiththeprescriptions oftheOHSAS down bythelaw, asitalso requires evidencethattherelative requirements onworkers’healthand safetyhavebeen When givingqualifiedstatus to companies,Terna showsahigherlevelofseveritythanindicated intheprovisions laid be heldbyselectedtraininginstitutes withSINCERT certification,usingasyllabus laiddownbyTerna. training coursesontechnicalandsafetymattersrespect fortheenvironment. Thecoursesmustlast32hoursand are beingprepared (andthisprobably includesallcore businesscontracts)mustholdattendancecertificatesforspecific protection introduced orenhancedbyLegislativeDecree no.81/08,allworkersworkingonsiteswhere overheadcables contracting companies Considerable attentionisalsogiventosafetyintheworkplace alongthechainofsupply, withparticularreference to there were 70,469hoursofsafetytrainingprovided (2007:46,416;2006:27,441). • periodic,precautionary medicalvisits were carriedout,whichalsoinvolvedatypicalworkers,aslaiddownbyLegislative • auditswere eightlocally-basedinternal carriedout;eachoneinvolvedthree auditorsoverthree days; • linewithlegalobligations,about120inspectionswere in carriedoutbytheRSPPsandTOAManagersaswell • OHSAS18001certificationwasreconfirmed; the • During 2008: • intenseandcontinuing an • Total 70,46 38,875 Workers 28,265 Office Staff 3,122 Middle Managers 207 Executives •a Decree no.81/08; about 100visitsintheworkplacebycompetentphysician; materials andsafetyequipment,testingtheirreliability using resistance checksinextreme conditions. working withvoltage(byusingacontrolled environment); sessions tobeheldonjobswhichincludeclimbingpylons(byusinglife-sizepylon-gyms)and safety equipment).Inparticular, certainequipmentusedatthe provisions andoperationalinstructionsforallhazardous activities(e.g.workingaboveground level,useofpersonal and withspecificsupplementarycontentatalocallevel.Thecoursescoverallsafetytopics,includingthelatestlegislative meetings. Theannualtrainingprogramme alwaysincludes coursesbasedonriskanalysesthroughout theCompany changes regarding safety, usingvariouschannelsincludingthecompany’sintranetandorganisation ofinformative accidents: causeanalysisisoneaspectincludedintrainingprogrammes aimedatcorrective measures; to achieveon-goingimprovements, withannualobjectivesto bereached, based,amongotherthings,on in question(CompanySecurity, HumanResources andOrganisation, PlantMaintenance).Themanagementsystemaims workplace about compliancewiththerulesandtopicsonsafety. Lastbutnotleast, seeindicatorLA6-Workers’ SafetyRepresentatives) allmaketheircontributiontowards raisingawareness are applied– reconfirm certificationstatusandtheelectedgroup ofworkerrepresentatives (whosetaskitistoverifythatthestandards audits internal is provided bytheemployersaswell available through thecompany’sintranet.Constant above ground level(methodsforclimbingsupportstructures). Thecollectionofmanagementsystemdocumentsisalso details relating toactivitieswithelectricalrisks(provisions regarding theprevention ofelectricalrisks)orriskswork all theactivitiesrelating tosafety(safetytraining,workmethods,useofpersonalequipment),withmore in-depth The managementsystemconsistsofanorganic anddetailedcollection of gravity andlikelihoodofspecificriskeventsoccurringforeachsinglerole andactivityundertakenbyTerna employees. employer andtheSafety, Prevention andSafeguard Manager, andverifiedbythecompetentphysician,highlights and environment systemsandisbasedonacareful to safetyintheworkplace; legislation, employers(andthisincludessupervisorsincharge oftheTOAs) haveunlimitedpowersforexpensesrelating applied research management system have beenincludedamongthesystemofindicatorslinkedtovariablesalarybonusesforDepartments on thecomplianceofalltransmissionoperationalareas. Inaddition,the : aspecificorganisation unitwithintheEngineeringDepartmentcarriesoutexperimentaltestson which carryoutjobsonwork-sitesbehalfofTerna. Inadditiontothe measures onsafety which obtainedthe activity ofinformationandtraining OHSAS 18001certification inspections mapping ofrisks supervision conducted bytheRSPPs(twiceayearineachTOA)andalso Viverone Training Centre . Allpersonnelismadeaware ofthemainnotionsand on thecorrect andthorough applicationofprocedures : theRiskAssessmentDocument,drawnupby in 2007.Thesystemisintegratedwiththequality procedures andoperationalinstructions performance objectivesonsafetyinthe 2008 64627,441 46,416 9 46213,536 14,622 13 13 143 2,6 12,084 29,567 ,8 1,808 2,084 (Turin TOA)allowsafetraining external audits external 072006 2007 monitoring required to ing on Training consisting ofcolleaguelecturers. The new a fundamentalpartofthecoursesstudyaimedatnewly-hired graduatesandwhichare runbytheTerna Faculty, their professional career. Theintroduction ofCampus,however, hasaddedanewformatcalled“ take employeesundertheirwingassoontheyentertheCompanyandguidethemindevelopmentthroughout Three trainingmacro-areas already existinTerna: encourage, isalready deep-rooted withinthebusiness. station already existswasdonedeliberatelytohighlighthow theknowledge,whichCampusProject intendsto Campus willalsohavespecificpremises insidetheMarcigliana ElectricityStationinRome.Choosingaplacewhere a opportunities forexchangingknowledgewiththeoutsideworld. The numerous collaborativeprojects centres withuniversities,businessschoolsandexternal ofexcellenceprovide and integrationinsidetheCompanycontinuestodevelop. which itis“owner”,kept,transferred andshared withintheCompanyand,atsametime,thatsenseof belonging (about 200managers,professionals, expertsinspecificcontentareas), Terna ensures thatthespecialistknow-how, of of themostexperiencedresources withintheCompanytoperformrole ofdesigners/lecturers intheCampusFaculty programme liesintheactivationofself-perpetuatingbenefits,where knowledgeisshared. Bydrawingonthewillingness With the“ (Campus -ExperienceintheNetwork). in thedevelopmentofsoftandtechnical/professional skills.Thisprocess wasbranded“ The Terna trainingprogramme underwentaprocess of renewal in2008withtheaimofstructuringandenhancingtraining 50% onthenumberofhoursprovided. general thegrowth trend between2006and2008isconfirmed,withanoverallincrease of18hoursperheadandover compared to2007.Thehoursperheadgrew by10%andduringtheyear96%ofstaff attendedatleastonecourse.In staffuse ofinternal providing instruction.Overallthere wasatotalof186,654hourstraining,withanincrease of27% to thefactthatcertaintrainingactivitiesonorder were transferred to2009andthatthere isaconsiderableincrease inthe In 2008,Terna invested1,083,247.84euro ontraining,whichwasslightlydownthe2007figure. Thisdecrease is due population. Theyear2008sawthecreation of“ cut across thethree subjectmacro-areas. Theseare trainingmodulesdevoted tospecificsegmentsofthecorporate about 500employees tookpartincludingsenior managers,middlemanagers andaselectedgroup of newgraduates. within theEducationfield.This moduleaimedtoimprove thewayassistantsare managed andtofacilitatetheirdevelopment; At thestartof2009,atraining modulededicatedtothenewGPS(GlobalPerformance System) modelwasimplemented their ownplanfordevelopment. TheDevelopmentCentre isaimedatgraduateoffice staff whoperform professional activities. development objectives,byputting acquired skillsintopracticeandencouragingtheparticipants totakeresponsibility in The DevelopmentCentre is anotheraspectoftheEducationtradition.Thisamethod whichcombinestrainingand development. attention tointernational colleagues from alldepartmentschallengeeachotherincreating valuefortheelectricitybusiness,bypayingparticular The middlemanagerstookpartinthesecondeditionof Terna Business Challenge,acompetitiveteamgamewhere a closelookattheirrole intheCompany, usingindoormethodology. Middle managers,ontheotherhand,tookpartinanoutdoor activityfocussedonleadership,whiletheteamleaderstook Top management. leadership, communicationandperformancemanagement development;aworkshoponmanagerialskills,alsoaimedat main componentswere: conferences, where expertsmettopmanagementtoshare international newapproaches in programme in2008,called“T-People -Terna People Management”,whichinvolvedallthecompanymanagement.The Satisfaction” surveyandwere summarisedinthe“Terna PeopleCare” actionplan.Inparticular, itincludedatraining The evolutionthathasoccurred overtimeintheEducationarea isaresult ofthefindingsthatemerged from the“People Economics, CommunicationSkillsandProject Management,andreached atotalof12,610hours. 2008, thisarea grew by23%,thanksalsotothecoursecontenttaughtin“ Education As regards theotherthree more traditionalareas, theresults for2008were asfollows. programme willfinishin2009andtheoverall contributions: 82peoplewere involved and9,942hoursoftrainingwere provided –120hoursperhead.The Master The MasterTerna coursesare designedandprovided bythein-houseFacultyandare enrichedbytargeted, external (Course forRealTimeShiftworkers),whichclockedup2,235hours. which gotunderwaybutwhosemajorcomponentwillbedevelopedin2009isthe“ Esperienze inRete - Thisisthearea oftrainingactivitieswhoseobjectiveistofacilitate managerialandpersonaldevelopment.In ” pay-off, theideawastounderlinethatspecificnature ofTerna’s renewed training Percorsi Percorso Master Terna Education, ContextandBusinessModel section clockedup12,184hoursoftrainingin2008.Asecondinitiative will continueinthefuture. ” degrees insidethe“ Percorsi Percorso perturnistidelTempo Reale Master Terna Campus -EsperienzeinRete ” programme, whichrepresent and Percorsi ” programme, suchas Training ” (Routes),which . Theseareas ” ” 139 Social responsibility 140 Sustainability Report 2008 2008 CORPORATE GIVINGEXPENSES-TERNASPA as muchinphilantropy efforts. Thetwocorporategivingcategoriesare definedasfollows: The Company’scommitmentmaybesummarisedinafew significantfigures: more than1millioneuro insponsoring,and and developmentactivitiesourconsequentpresence ontheterritory. – anotherwaytoreturn valuetocivilsocietyandlocalcommunities,inconsideration ofourelectricitygridmaintenance The year2008markedTerna’s greater commitmenttosupporting initiativesinsocial,cultural,andhumanitariansettings Initiatives intheCommunity Total 938,902 26,500 Other 105,000 Social unrest, solidarity 351,660 Art andculture 150,000 Environment 305,742 Energy Supported causes philantropy: paymentstonon-profit associationsororganisations withnocontractualreturn. • sponsoring:expensesforthird-party initiativesinareas otherthanthecore business,forpurposes ofimageand • station whichisduetobecompletedattheendof2009orbeginning2010. programmes onoffer. Inaddition,workwillcontinueonthecreation ofthenewtrainingsiteinsideMarcigliana electricit The year2009willbetheconsolidationforCampusandprovide newcomponentstoenrichthetraining area, withover70,000hoursoftraining. 52% compared to2007.Onearea particularlyworthmentioningistheTerna’s Provisions forElectricityRiskPrevention increase overtheprevious yearof25%.56%trainingactivitiesinthisarea are devotedtoSafetywithanincrease of In 2008,thisarea achievedatotalof133,949hours,includingthosewithinthe“ development. Training activities thatwere postponedto2009. campaign regarding newlegislationonPrivacy. Therefresher courseonthe231Organisational Modelisoneofthetraining CompanyPresentationIn detail,74%ofthehoursconcerned activitiesandtheremaining 26%focusedontheonline The onlinecampaigndevotedtoPrivacywasparticularlyimportant. which recorded themostsignificantincrease (39%)overtheprevious year, clockingupatotalof38,408traininghours. in whichTerna operates,thereby facilitatinginparticularthedevelopmentofCorporateIdentity. In2008,itwas thearea Context&Business Model euro communication, contractuallyinvolvingareturn intermsofvisibility; Taking partintrainingwhile protecting theenvironment of theinnovativenature ofthetrainingapproach, itsoriginalityandtheeffectiveness oftheevent asalifeexperience. which isafeature ofitscorporateculture. Theexperiencesofthosewhotookpartwere extremely positive,interms effective testimonyofitssensitivitytowards environmental issuesand,more ingeneral,issuesonsustainability environmentally-sustainable outdooractivityisanoveltyforTerna and aimstouniteitstrainingobjectiveswithan The trainingeventfollowsthe“DevelopmentCentre” programme whichwasalready underway. Thechoiceofthis abandoned inthesea. various localities,armedwithsacks,glovesandrakesinorder tocollectrubbishleftonthebeachor, evenworse, to lendmusclepowerandenthusiasmthethousandsofvolunteers,whoeveryyeartakepartinthisevent Legambiente’s “SpiaggeeFondaliPuliti”Campaign(“CleanBeachesandSeabeds”).Itallowedtheparticipants original teamworkinganddiversitymanagementsession.Thistrainingmodulewasorganised tobeincludedinthe graduate office staff (originallyemployedinprofessional roles inthetwo-yearperiodfrom 2003to2005)inan towards nature. Theactivitytookplacefrom May22to24intheParco dell’UccellinainTuscany andinvolved A “sustainableoutdooractivity”,organised byLegambiente,aimedatcombiningtrainingandacommitment - Thisisthearea oftrainingactivitieswhichgroups togethercourseswhoseobjectivesare specificprofessional - Thisarea businesscontext oftrainingisaimedatproviding knowledgeontheinternal/external pnoigPiatoyTotal Philantropy Sponsoring Percorsi ,1,0 2,049,502 1,110,600 3,0 65,500 39,000 2,0 325,742 20,000 8,0 1,239,160 887,500 0150,000 0 1410269,100 164,100 ” programme, displayingan y Italy The mostimportanteventsheldin2008andtheearlymonthsof2009were thefollowing. euro (averageexchangerateforDecember2008). In 2008,theBraziliansubsidiaryTerna Participaçõesrecorded socialexpensesfor2.2millionreais, equaltoabout694,000 the totalexpensesforgenerosity efforts madeoverthecourse oftheyearmayrecord adecline. the Protocol ofUnderstandingsignedwiththeMinistryCulturalAssetsandActivities.Consequently, incomingyears, an exceptionalcomponent:theallocationtoafundmeet,overtwo/three-year period,thecommitmentsderivedfrom Assessment ofthegivingexpensespublishedforfirsttimewithreference to2008shouldbearinmindthat they include • the partnership with the ornithological association called Ornis Italicacontinued.Through associationcalledOrnis the partnershipwiththeornithological the • within thescopeofFaircalled“ • •The Environment Opening upawindowtogivevisibilityyoungItalianartists:thisisthereason behindthecreation ofthe • Culture -Art Rome washosttothe • Energy -Economy • in supportingthe in • 2008editionofthe the • In addition,adeliberately-reduced versionoftheannual put upasumforeachemployee takingpart. 10,000 euro were donatedto In 2008theCompanyalsodecided tomakeafew companiesinvolvedinthedevelopmentofArt:thistopicwasdiscussed atthe • 50privategalleriesandpublicmuseumsopenuntillateatnight:thisisthe • favoured associations where company employeeshelpoutasvolunteers (seeboxonp.142). euro tonon-profit associationsinItalyforthesupportofsituations of socialunease.Theinitiativesthatwere chosen (Strategic Environmental Assessment); which Terna introduced totheaudienceconsultationmodel forthedevelopmentofelectricitygridbasedonSEA presented adiscussion“Workshop” onthesubjectof“Energy, infrastructures andtheterritory:anopendialogue”,during environment inaccord withasustainabledevelopmentofthecountrysystem; protection oftheterritory. Terna supportsthe an entitywhichhasbuiltinfrastructures withaspiritof innovation, respecting theparticipationofstakeholdersand the themeof2008edition. their nests.Enthusiastscanwatchthebirds onthewebsite reproduction ofhawksandkestrels wasmonitored, manyofthemchoosingthenestboxes positionedonpylonstomake Arti delXXIsecolo enhancement ofItalianContemporaryArt.Onetheproposed activitiesinvolvessupportforthe and theItalianMinistryofCulture. TheAgreement, whichlastsforthree years,isdirected towards thepromotion and p. 143).The into 2009withthesecondeditionofAward andanAmericanexhibitionofselectedworks from Terna 01(seeboxon which enjoyedthepatronage oftheItalianMinistryCulture. Sixmonthsofworkandacommitmentwhichcontinues (see boxonp.98). policy direction whichTerna shares deeplyandwhichledTerna toshowitssupportforthisimportantdiscussionforum; particular, thediscussion centred ontherole ofenterprisesasbearers of growth andcompetitivenessinthisfield,a concentrated thisyearonissuesrelating toenergy, environment andsustainabilityinthedevelopmentofcountry. In correct useofenergy sources; aim wastohighlighttheimportanceofdialogueandcooperationfacilitateamore effective approach towards the personalitiestodiscussworldenergyinternational policiesandtheirdevelopment.Assponsoroftheintitiative,Terna’s Art LabinTurin of ContemporaryArtamongthepeopleRome; Company, inlinewithitscommitmentthrough the Documentation Centre; Terna01Premio Premio Pimby Premio Terna01Premio . Terna illustratedtheexperienceofContemporary ArtAward Premio Terna01. award inthecategoryoffamousartists(100thousandeuro), whichshallbeusedtocreate the Festival dell’EconomiainTrento (National Museumof21 (Please InMyBackyard), thoughtupbytheassociationwith the samename,presents anaward to International EnergyForum International Convegno deiGiovaniImprenditoridiConfindustria Ai.Bi. award wasthefirstofanumberinitiativeslaiddowninDraftAgreement signedbyTerna , Associazione AmicideiBambini Dal DirealFare st Century Art),knownasMAXXI.Itisinpreparation andwasgiventhefirst donations Premio Pimby Premio Terna01Premio , Terna contributedtowards thedebateon“ in April2008,whichgathered togetheranumberofprominent ” (“From Words toActions”)dedicatedsustainability, Terna We:Me www.birdcam.it towards non-profit associations,linkedtospecific projects: Convention allowedTerna todevolveasumof80,000 in order toencourageaculture whichprotects the award, andisameansofincreasing theawareness , thankstotheCreativInTerna project where Terna which wascreated withsupportfrom Terna Art BusinessForum Art Weekend Roma (Young IndustrialistsConvention) Mercato eDemocrazia Museo Nazionaledelle Birdcam Project in Milanandatthe supported bythe Premio Terna01 , the ”, , 141 Social responsibility 142 Sustainability Report 2008 Brazil • • • • • • and thepurchase ofallthe materialsandthebuildingworkitself.ThehousewasopenedonApril13,2009:250m to support.AGAPEcoordinated theentire project from itsconceptiontothenegotiationswithinterested companies “Comunidade DosPequenosTrabalhadores” associationinFozdoIguaçuBrazil,whichTerna Participaçõesdecided street-girls created by sufficiency andreintroduction intothesocialfabricofcountry. Thisistheproject forahousededicatedtoyoung babes, andtoenhancethespacesdedicatedcraftssewing,inaproject whoseaimistofacilitatetheirself- of 195,695.77reais. from theNationalProgramme SupportingCulture calledPRONAC.Terna paidfornearlyhalfoftheinvestmentatotal the municipalitycalledBomJesusdeLapa,where Terna hasanelectricitystation.Thisvolumereceived authorisation in PortugueseandEnglish,withpictures andinformationabouttheRiverSãoFranciscoathorough description of dissemination ofnewbooksaimedatyoungreaders. The eventincludedtheparticipationofover66publishersandwasacknowledgedasanimportantvehiclefor ArtinRiodeJaneiroMuseum ofModern playedhosttothetentheditionofChildren andAdolescents’BookFair. eight seminarsforthepreparation ofteacherswiththeaimimproving teachingtechniques. which eachincludedatopicsheetwithseriesofeducationalproposals basedonthefilms.Theproject alsoincluded Festival ofFilmsforChildren andhelpedthesecretarial offices instateschoolsnearelectricitylinestodistributethekit rooms, studyandworkingareas, alaundry, awatertankandanoutdoorarea forevents. capitals intheNorth-westofBrazil,performingtoaudiencesover15,000people. diPernambuco Orchestra SinfonicaGiovaniledelConservatorio including Bahia,Maranhão,Tocatins, GoiàsandtheStatesofFederalDistrict. conservation through theeyesofsmallchildren. 10,000copieswere produced anddistributedinover26municipalities lata, AmigoRio”(Tin-canFriend,RiverFriend),writtenbyThiagoCascabulho,addresses issuessuchasenvironmental Refuge homeinFozdoIguaçu Project fortheBrazilianrivers Progetto Douradinho Schermi inclasse 10 Progetto OrchestraSinfonicaGiovanile A companyconventionwithamarkofsolidarity houseorgan, “Terna News”withcommentsfrom employeesdoingvoluntaryworkinthebeneficiaryassociations. colleagues toorganise thedonationsandwassubjectofdiscussiononcompany’sintranet Genoa, Padua,BariandReggioCalabria.Theinitiativeencouraged thecreation networkamong ofaninternal ensure greater territorialcoverage, afurthercontributionof25,000euro wasmadetotheCaritasbranchesinTurin, needy anddisabled,helpingtheelderly, rehabilitating drugaddicts andsupportingpoororsickchildren. Inorder to did voluntaryworkthere. Eachassociationreceived 5,000euro insupport oftheiractivitiessuchashelpingthe associations were chosenbyanin-housecommittee,eachcharacterisedthefactthatoneormore colleagues of situationsneedordifficulty withintheirarea. Anumberofcandidateswere putforward andoutofthese,11 to putforward thenamesofassociationsthatdeserved acontributionfrom theCompanyfortheiractivitiesinsupport resources (totalling80,000euro) tobefreed upanddonatedtoagoodcause.EveryTerna territorialarea wasasked deliberately shorterandmore sober, giventhedifficult economicsituationatthe time,butthisallowedafew consecutive yeartoshare theirresults andobjectives,includedaveryspecialfeature. Theprogramme was The annualWe:Me Convention,whichinDecember2008brought togetheralltheTerna managersforthethird th Edition oftheProject “ (Screens inClass) . The AGAPE Onlus Douradinho Fondazione perunlibrol’Infanziael’Adolescenza . In2008,thepublishingproject “ . Ittooklessthanayeartobuildhomehouseyoungmothersandtheirnew-born in Rome(AssociationofAdoptiveParents forCountriesAbroad) infavourofthe Project aimstodevelopinterest inreading andcreativity. Thebookcalled“Amiga Terna produced 300kitscontainingtenfilmstakingpartintheInternational . . In2008,Terna Participaçõessupportedtheyouthorchestra calledthe (OSJ-CPM). TheOrchestra hasplayedinseveralregional Rivers inBrazil ” produced 4,000copiesofavolume ” At theendofMay2008, . 2 with s, the MinistryofCulture; Sandro Bondi,MinisterofCulture; FlavioCattaneo,Terna CEO. Premio Terna 01Award Ceremony, November25,2008.From lefttoright:LuigiRoth,Terna Chairman;FrancescoMaria Giro, Under Contemporary ArtAward Terna01: let’stransmitenergy toart delle ArtidelXXIsecolo enhancement ofItalianContemporaryArt.Onetheproposed activitiesinvolvessupportforthe In additionTerna signedaDraftAgreement withtheItalianMinistryofCulture lastingthree yearsforthepromotion and writerandessayist. Pivano,internationally-famous Chairwoman ofConfindustria;Fernanda Lecturer andChairmanoftheFondazioneRavello;MassimilianoFuksas,famousarchitect; EmmaMarcegaglia, of illustriousrepresentatives from theestablishment,culture andenterpriseworld:DomenicoDeMasi,University The HonoraryCommitteeforthe the creation ofanonlineartgalleryandvotetomakeaspecialaward forapiecechosenbythepublic. judges withpersonalitiesfrom theworldofCulture, Art,Design,Economyandthe Cinematohavevariedjudgements; ( Art through theeyesofItaliansandartists,conductedbyISPOResearch Institute;awebsite interconnection betweenArtandEnterprises;thecreation oftwooriginalsurveysontheperception ofContemporary artists; theintroduction ofatheme“Transmitting Energy, aContemporaryMetaphor”whichre-establishes astrong and Province ofRome;free andopenentrytothecompetitionforemerging artistsofallages;acategoryforfamous Italian MinistryofCulture andthepatronage oftheMinistersforYouth andEconomicDevelopment,theMunicipality objective behindthecreation of Supporting anddevelopingContemporaryArtinItalyasawayofreturning valuetothecommunity:thisis 10,000Christmascards senttostakeholdersincludedafree ticketfortwopeopletooneoftheAMACImuseums • finalistworkswere the projected onthefacadesofbuildingsinRomefrom December23toJanuary1withinthe • 39 works exhibited(winnersandfamousartists)attheendofNovember • about3millionpageswere viewedon the • 3,158worksentered; themostrepresentative sectorofartistswasthatbetweenthirty-twoandthirty-fiveyearsage; • Some oftheimportantresults achieved: The ContemporaryArtAward Terna01 received amedalfrom thePresident oftheRepublic. prize inthecategoryoffamousartists(100thousandeuro), tobeusedcreate theDocumentationCentre. www.premioterna.it of ContemporaryArtthrough experience: atotalof20,000peoplewere invitedtovisitamuseumforfree. ( the touristsstayingthere fortheChritmasperiod; scope ofthe“ Associazione deiMuseidiArteContemporaneaItaliani Roma CittàNatale ) forthemanagementofcompetitionandinformationpublicatlarge; apanelof (National Museumof21 Premio Terna01Premio Premio Terna ” project, whichwasenjoyedbytheoverfourmillioninhabitants inthecityand www.premioterna.it st was chaired bytheMinisterofCulture, Sandro Bondiandconsisted . Manyfeatures makeitsomethingunique:thepartnershipwith Century Art),knownasMAXXI.Itisinpreparation and wasgivenfirst ) inorder tocontributetowards anincreased understanding website in4months; Palazzo delleEsposizioni Museo Nazionale secretary of in Rome; 143 Social responsibility

2008

Tables of indicators 146 Sustainability Report 2008 See alsothetableofacronyms andtheglossaryafterindicators. For aneasierreading oftheindicators,followingtabledefinesunitsmeasurement withwhichtheyare expressed. indicators. Measurements are normallycalculatedasofDecember 31,andrefer totheentire financialyearinthecaseofflow Italian activitiesare theboundaryofreference. ifsignificant,thepercentage variationoccurring between2007and2008. • ifsignificant,theabsolutevariationoccurringbetween2007and2008; • datafor2008,2007,2006and2005; the • unitofmeasurement; the • For eachindicator, thetablesreport: The followingvariationsfrom thetablepublishedin2007 Sustainability Reportare specified: accordance withthefollowingscheme: The indicatorsare broken downintofiveareas corresponding totheReport’sstructure, dividedintothematicsectionsin In somecases,forthesakeofcompleteness,dataalready presented intheReporttextare included. which Terna deemsimportanttopublishinorder toillustrateitsperformanceinthefieldofcorporatesocialresponsibility. The followingtableslisttheindicators–addedtothoseprovided forbytheG3“SustainabilityReportingGuidelines”– Key: unitsofmeasurement Area y tons no. MWh MW min km kg h GWh/year € € € % # TransmissionNational the Grid to connected Users ofdispatchingservice:distributorsdirectly 5. Socialresponsibility 4. Environmental responsibility 3. Economicresponsibility 2. Responsibilityfortheelectricityservice 1. Terna’s profile /Mln /000 Section Years Tons Number Megawatt hours Megawatt Minutes Kilometres Kilograms Hours Gigawatt hoursperyear Millions ofeuro Thousands ofeuro euro Percentage Affiliation relations withTerna. to beincludedunderthecontractwithGSE,whichhas begun onJanuary1,2008,thatledthemajorityofsmallplants but toalaterperiod.Itwastherefore affected bytheprocess, the onepublishedlastyearreferred nottoDecember31,2007 The figure for2007wascorrected (from 160to1,200)because Trade unionrelations Safety Equal opportunity Personnel satisfactionanddevelopment Number andcompositionofpersonnel Environmental performance Customer litigation Customers -Regulatedmarket Suppliers Financers Shareholders Grid Ethical Auditing Corporate Governance oa eot eevdn.33230- 0 - 3 0 - - 2 0 1 0 - 3 - - 0 - 0 9 - 0 2 -1 -3 3 0 0 3 14 0 UM 10 7 no. 6 0 7 3 12 0 10 7 3 no. Total ofverifiedbreaches oftheCodeEthics 7 Total 3 reports received 13 10 0 Implementation oftheCodeEthics 8 6 Indicator no. 4 3 no. 9 10 3 no. 4 UM no. no. no. ControlMeetings oftheInternal Committee Meetings oftheRemunerationCommittee no. BoD meetings Women onBoD by minorityshareholders Directors expressed Independent MembersontheBoD Total MembersBoD Board ofDirectors Indicator Terna’s profile Ethical Auditing Corporate Governance 2008 2008 0720 05Vr0-8Var 07-08% Var 07-08 2005 2006 2007 0720 05Vr0-8Var 07-08% Var 07-08 2005 2006 2007 147 Tables of indicators 148 Sustainability Report 2008 egho h ie . . . .00-10.5% 0.0% 0 0 2.10 2.70 0.0% 1.9 2.4 10 1.9 -0.1% 0.0% 2.4 0.0% 35,129 0.0% -29 1 1.7 0.1% 0 39,056 -0.2% 2.4 -10 1.4% 38,976 3.3% 9 -29 0.1% 17,538 39,446 5 % 8,053 18,636 3 % 43,777 10 0.0% 19,716 9,893 9,538 39,456 21,169 9,753 302 44,201 1.5% 0 69 10,447 19,863 km 12,117 9,587 21,342 2 9,771 44,172 length ofthelines 357 10,492 19,864 length ofthetriads 107 12,142 86 9,812 Incidence ofcontinuouscurrent connections 21,332 -0.9% km 0.8% 9,771 126 10,717 km 366 12,113 -27 km 996 139 9,821 length ofthelines 90 2.3% km 10,727 km 132 2,822 371 0.4% 673 109,968 km 143 km length ofthetriads 93 Total 350 114,145 2,791 133 length ofthelines 25,516 no. length ofthetriads 143 Lower voltages 117,543 length ofthelines 81,630 no. 2,895 length ofthetriads 27,934 135 220 kV length ofthelines 118,539 no. length ofthetriads 83,420 28,779 380 kV 2,868 Extent ofelectricitylines: MW no. 85,870 Electricity lines 29,452 MW power ofinstalledtransformation stations 86,220 Total UM MW power ofinstalledtransformation stations Lower voltages MW power ofinstalledtransformation stations 220 kV power ofinstalledtransformation stations 380 kV Electricity stations Indicator Responsibility fortheelectricityservice nrymngdGhya 3,0 4,0 3,0 2,4 240-0.7% -2,400 329,441 337,000 340,000 ENS (Energy NotSupplied) 337,600 ASA (Average SystemAvailability) Indices ofservicecontinuity: GWh/year Technical Quality National Transmission Grid(NTG) Loss ofelectricityenergy onthe Energy managed Grid efficiency AeaeItruto rqec ne)n.02 .302 .80- 0 0.18 0.21 0.23 0.22 no. AIT (Average InterruptionTime) (Average InterruptionFrequency Index) SAIFI+MAIFI (1) Estimated figure (lossonthelinesduetoproportional crown effect onthevoltageandduetoproportional jouleeffec (3) Average timeofinterruptioninsupplytheelectricitysystem(NTG)a year.(3) Thisiscalculatedastheratiobetweent benchmarks),calculatedwithreferenceThe indicatorisASAOverall%(usedininternational (2) tothesingle TOA,i.e.forth (4) Energy NotSuppliedduetonon-suppliesontheNTGinperiod.Important incidentsare excludedfrom theENScalculation Grid of which: of which: of which: Work. account: Programmed Downtime;Occasional DowntimeduetoBreakdown; Causes;DowntimeforDev DowntimeduetoExternal transformers). 2008 figure wascalculatedaccording tothislastdefinition. and 333/07regarding theRegulationof theServiceQuality, anImportantIncidentmeansany non-supplywithEnergy NotSupplied 150 MWhwithaduration ofover30minutes.From January1,2008 whenthe2008-2011regulatory periodcame intoforce andwith 2007, incompliance withtheprovisions oftheAEEGResolutionno.250/04, anImportantIncidentmeansanon-supply withEnergy period (ENSfigure) andtheaveragepowerabsorbedbyelectricitysystem intheconsidered period. n40c n 0 Vk 4 4 4 - 0.0% 0 4.5% 0 - 0.0% 20 - 4.5% 0 426 0 302 20 749 434 426 - 422 302 749 434 434 1,068 445 422 749 434 434 1,068 465 445 km km 434 1,068 km 465 km km in 400ccand200kV km in submarinecables in undergroundcables in 400ccand200kV in submarinecables in undergroundcables w nrycnupinGhya 5 5 5 5 0.0% 0 150 150 150 150 GWh/year own energyconsumption (4) (3) (1) (2) W 1 4 5 2 7 - 171 424 358 644 815 MWh i .609 .606 - 0 0.68 0.56 0.99 0.66 min 91 92 92 92 - - 0 - 99.26 - 99.21 1.32 99.28 1.32 99.15 % 1.32 % 2008 0720 05Vr0-8Var 07-08% Var 07-08 2005 2006 2007 he Energy NotSuppliedinacertain e entire nationalarea takinginto t onthecurrent, lossonthe ofover250MWh. The . UptoDecember 31, Resolution no.341/07 NotSuppliedofover elopment OC 201. 401. 20- -2.0 11.8 14.0 - 14.0 - 2 - 12.0 50 9 -18 % 90 212 5 207 172 3 107 266 ROACE Net profit 5 EBT EBIT 157 EBITDA 248 Revenues - - Economic performance no. no. from retail shareholders no. - Requests forinformation - - and/or withspaceforCSRthemes Meetings withtargeted investors -17.4% with financialanalysts(“sell-side”) - Meetings/conference calls with investors(“buy-side”) -8 - 5.1 Meetings/conference calls -7 26.8 Communications toshareholders -2 - - 25 12.0 5.1 23.6 3.27 - perShareEarnings (EPS) 38.1 38 32.6 5.2 Shareholder return 5.1 13.49 29.99 41.3 38.1 46 5.2 5.1 12.2 29.99 59.7 31.3 % 38 % 10 29.99 Financial performanceoftheshare 59.7 % Share performance no. 29.99 % Weight ofSRIsinInstitutionalFunds UM Quota ofTerna shares heldbySRIfunds % SRI fundsamongtheshareholders % Investors (SRIs) Socially Responsible Enel SpA Retail Cassa DepositiePrestiti SpA Institutional Investors Breakdown ofshareholder base Indicator Economic responsibility TEGO e e e e - - - - - 1 0 1 yes - 0.87 0.63 0.82 yes 0 0.95 0.65 0.89 yes 0.71 1.01 0.73 0.99 yes 0.71 1.64 1.22 1.58 0.697 # % % % 1 % ECPI EthicalIndex FTSE4GOOD Terna isfound: Sustainability indicesinwhich Dow JonesSTOXX600Utilities S&P/MIB30 MIB30 Mibtel worldwide share-market indices: Terna intheMIB30and Dividend yield Total Shareholder (TSR): Return Dividend perShare (DPS) (5) As regards(5) the2005value,0.05euro wasdistributedasanadvancepaymentonNovember24, 2005and0.08euro waspaidonJ The valuewascalculatedastheratiobetween dividend ontheaccrualbasisforyearinquestionandaveragere (4) The 2005 performancewascalculatedbycomparingtheshare(3) priceasatDecember30,2005(2.084 euro) withthatas at Janua (2) Investimentsmade,onthebasisof traditionalcriteriaandalsoonthebasisofethicalcriteria. (1) During 2005,Enel SpAreduced itsshareholding inTerna byselling13.86%oftheshare capitaltoItalianandforeign Inst (7) Since2006Terna hasusedtheIFRSaccounting standards, andthefigures relating to2005were recalculated according toth thosethat arrivedviaemail only (6) Thefigure doesnottakeintoaccount therequests madetothespecific telephone points– Shareholders ic P 66 69 38 28 2 - - -20 -22 32.86 - 73.81 30.45 96.92 11.99 76.65 -10.3 % % - sincestartoftheyear - sinceIPO The 2008result wasobtainedbycomparingtheshare priceasatDecember 31,2008(2.335euro) withthatasatJanuary2,2008 euro). The2007performancewascalculatedbycomparing theshare price asatDecember28,2007(2.758euro) withthatasatJa 2006 performance,ontheotherhand, was calculatedbycomparingtheshare priceasatDecember29,2006(2.57euro) withthat for theentire yearof2008,which5.92 eurocents were paidonaccountinNovember 2008and9.88eurocents asthebalancepa 2007 and0.095euro wasdistributedasthebalance on23.06.2008andpaidJune26, 2008. In2008adividendof15.8eurocent June 21,2007.Similarly for2007,ofthe0.151euro, thesumof0.056euro wasdistributed onaccountNovember19,2007 and 0.53 euro wasdistributedinadvanceonOctober20,2006andpaid on October23,2006and0.087euro wasdistributedonJune18 December. accelerated bookbuildingoperationand29.99%totheCassaDepositiePrestiti SpA. (4) (2) € r e e e - - - yes yes yes # uro (6) (7) (1) (3) € € € € € Mn353467358256-1-17.6% -7.9% 1.8% 7.0% -71 -44 11 56 6.7% 265.6 419.8 75 430.5 587.5 355.8 566.9 910.3 550.8 740.9 406.7 553.7 1,110.2 586.6 795.2 335.3 509.9 1,121.4 597.2 850.7 /Mln 1,196.1 /Mln /Mln /Mln /Mln o 71 2171 - 10 107 62 17 27 no. .355 .662 - - 1 -21 6.25 -1.93 5.46 22.97 5.50 6.08 6.93 -15.34 % % € € .6 .0 .7 .3 -17.2% 0 0.134 0.178 0.203 0.168 2008 .601 .401 5.3% 0 0.13 0.14 0.15 0.16 0720 05Vr0-8Var 07-08% Var 07-08 2005 2006 2007 ference priceforthemonthof itutional Investorsthrough an . ry 3,2005(2.185euro). The ese standards. s pershare wasdistributed as atJanuary2,2006(2.09 nuary 2,2007(2.60euro). (2.80 euro) pershare. une 22,2006.For2006, paidonNovember 22, yment inJune2009. , 2007andpaidon 149 Tables of indicators 150 Sustainability Report 2008 hr em(sur ne 1F+F+------P-1 Aa3 - - F1+ - AA- stable AA- P-1 Aa3 AA A-1+ stable F1+ AA- negative stable AA- P-1 Aa3 A-1+ 27.9% AA negative stable 32 stable F1 A+ AA- P-1 A-1+ A1 stable AA- stable stable 103.8 index index A-1+ AA- index index index index index negative 105.5 index index index FitchSeniorUnsecured Debt 113.9 Short Term (Issuer) M/L Term (Issuer) Outlook (Issuer) Fitch (sinceMay4,2006) 145.7 Short Term M/L Term Outlook Moody’s (sinceSep.2,2004) % Short Term M/L Term Outlook S&P (sinceSep.2,2004) UM Rating Residual debtrelating toEIBloans EIB Loans Debt toEquity Equity Financial borrowing Payables Indicator edn ae o 61 12 1- - - -1 3 0 23 6 2 21 -66.7% 2.9% -20 14.3% 0 1 4 17 38 64 36 0 4 229 16 11 35 238 3 4 no. 0.7% 30 13 35 265 no. no. 10 1,582 Litigation definedduringtheperiod 303 36 Litigation filedduringtheperiod Pending cases 1,696 % Legal caseswithSuppliers no. (percentage oftotalorders intheyear) no. Online tenderbids 1,828 Qualified sectorsattheendofyear Companies suitedtoSupplierList UM Management Tools 1,841 Services Works Supplies no. Procurement ofmaterialsandservices Number ofSuppliersundercontract Number ofSuppliers Indicator (2) Theserefer tothelastevaluationsassignedTerna inthefinancialyear. Rating (1) Since2006Terna hasusedtheIFRSaccountingstandards, andthefigures relating to2005were recalculated according toth EIB Loans Payables Suppliers Financers (2) (1) (1) € € € € € € Mn81450950540020550.0% 270.5 0.1% 400.0 28.0% 2 570.5 645 1,797.0 540.9 1,865.0 1,901.7 2,005.7 811.4 2,026.0 2,308.7 /Mln 2,028.0 2,954.1 /Mln /Mln Mn1039. 223. 424.6% 89.7% 24 14.5% 89 43 35.7 79.9 135.3 72.2 125.2 755.4 96.6 99.4 298.5 120.3 188.5 341.7 /Mln /Mln /Mln 2008 2008 0720 05Vr0-8Var 07-08% Var 07-08 2005 2006 2007 0720 05Vr0-8Var 07-08% Var 07-08 2005 2006 2007 ese standards. PouesadTaes nldn h S)n.7 47 41 54 70 74 75 (Traders andendcustomersincluding no. (Producers andTraders, includingtheGSE) Users ofdispatchingservice: edn ae o - 4 - - 0 2 0 0 0 1 1 0 3 4.1% 4 2 0 7 90 4 0 no. UM 0.0% 97 0 no. no. 98 Litigation definedduringtheperiod Litigation filedduringtheperiod 21 Pending cases Legal caseswithcustomers 102 Indicator 21 no. 21 21 the SingleBuyer) UM no. Owners ofproduction facilities to theNationalTransmission Grid Distributors directly connected Users oftransmissionservice: Customer portfolio Indicator Withdrawal dispatchingusers Input dispatchingusers (1) The 2006increase was duetoabout200smallfacilitiescomingonlineandthecompletionofcensuswith Owners ofproduction facilities: Customer portfolio Customer litigation Customers -Regulatedmarket Since January2008,thevastmajorityofsmallproduction facilities havecomeundertheownershipofGSE,whichmaintains (1) o 512010720-,2 -93.8% -1,125 260 1,007 1,200 75 no. 2008 2008 0720 05Vr0-8Var 07-08% Var 07-08 2005 2006 2007 0720 05Vr0-8Var 07-08% Var 07-08 2005 2006 2007 less than10MVA ofpower. dealings withTerna. 1.4% 151 Tables of indicators 152 Sustainability Report 2008 Total specialhazardous waste: Others containing asbestos Waste consistingofmaterials Lead batteries or withPCBs Waste oilwithoutPCBs Waste oilwithPCBs>25ppm conductors, cables Machinery, equipment,supports, Special hazardous waste: Total specialnon-hazardous waste: at eyln 088. 278. . 2.9% 2.5 89.2 78.1% 3,562.7 92.7 7,291.6 86.8 8,282.6 4,562.9 90.8 8,010.7 % Others tons Packaging conductors, cables Machinery, equipment,supports, Special non-hazardous waste: Waste recycling Waste products UM Waste Management in consistencyofSF Percentage incidenceofthelosses Emissions Indicator Environmental responsibility edn ae o 8 7 5 5 - - - 8 6 12 152 17 26 158 19 11 172 25 11 180 31 no. 23 no. no. Litigation definedduringtheperiod Litigation filedduringtheperiod Pending cases Litigation regarding theenvironment SF SF (3) Theitem“Others” mainlyincludeswastefrom constructionanddemolitionactivities. (1) The percentage lossesin2008includes1,100kgofrecorded duringtheincidentthatoccurred inTavarnuzze. Ifthes (2) Only wastefrom theproduction process isincluded,excluding,therefore, wasteproduced from serviceactivities(e.g. offi Environmental data uniydlvrdfrrccigtn . . . . - -47.2% -51.2% 130.0% -100.9 -86.1% 2,331.4 -32.7 - -77.8 -22.0% 130.7% 37.4 3,651.4 4.0 2,040.0 -20.6 15.0 -14.9% 3,387.8 3.3 3,497.1 109.8% 237.4 49.1 -12.7 10.0 505.7 1,793.0 40.2 3,128.4 49.9% 213.7 5.9 49.0 90.3 851.5 4,009.6 226.9 63.8 1,560.6 90.4 112.8 0.0 tons 90.3 487.3 804.9 93.6 3,616.8 31.1 12.6 tons tons 460.5 484.3 84.8 0.0 73.0 tons forrecycling - quantitydelivered tons - productquantity 966.2 455.1 72.1 tons forrecycling - quantitydelivered tons - productquantity tons 682.0 - quantitydeliveredforrecycling tons - productquantity forrecycling - quantitydelivered tons - productquantity forrecycling - quantitydelivered - productquantity neupetnti evc g0019674237--- 1.6% - 468.2 - 21,063.1 5.8% 21,041.9 15,728.8 4,243.7 29,597.6 233,876.9 1,926.7 30,065.8 245,405.2 272,899.8 kg 0.0 288,628.6 kg kg - ingascylinders - onequipmentnotinservice - onequipmentinservice rdc uniytn 662. 9320-. -1.8% -0.5 47.1% 8.2 2.0 211.9% 0.0 1,980.3 49.3 207.6% 44.5% 2,707.4 1,895.3 333.1% 44.2 27.1 1,231.3 2,513.5 1,540.2 52.2% 2,625.0 3,640.2 1,137.5% 811.2 17.5 1,253.6 934.4 26.6 2,463.5 1,639.3 4,894.8 3,008.0 526.7 338.6 2,914.7 912.9 25.7 tons 2,769.9 4,549.4 tons 462.4 185.8 2,808.2 tons 4,001.2 2,400.2 forrecycling - quantitydelivered tons 2,002.6 144.1 tons - productquantity 3,653.8 forrecycling - quantitydelivered tons - productquantity 1,783.4 tons forrecycling - quantitydelivered tons - productquantity forrecycling - quantitydelivered - productquantity rdc uniytn 3. 8. 3. 0. 159-54.2% -155.9 -59.6% -7.6% 207.6 -158.2 -153.0 433.2 215.0 -11.4% 2,621.4 -227.5 287.8 424.5 3,934.8 2,454.4 131.9 265.3 2,019.7 3,939.1 1,866.7 tons 107.1 1,990.8 tons 1,763.3 tons forrecycling - quantitydelivered tons - productquantity forrecycling - quantitydelivered - productquantity 6 6 - specialnon-hazardous wasteproduced (quantitydelivered forrecycling) 9,130.0tons. - specialnon-hazardous waste produced (quantityproduced) 72,565.4tons; - totalwasteproduced 77,034.1 tons; earth androcks” wouldhavegiventhefollowingresults for2008: “Excavation earthandrocks” category, whichisexceptionalinnature andwouldmaketheseriesoffigures disparate.Theinclu account, thepercentage stands at0.73%inlinewiththepercentage lossesintheprevious years. rehuegseisos k ,1. ,9. ,6. ,3. ,1. 62.4% 1,310.6 1,533.3 4.7% 1,569.0 14,270.2 2,099.4 261,143.5 270,690.8 3,410.0 304,424.1 kg 318,694.3 consistency kg greenhouse gasemissions (3) ≤ 25ppm 6 (1) (2) .706 .805 .855.2% 0.38 0.59 0.58 0.69 1.07 % 2008 0720 05Vr0-8Var 07-08% Var 07-08 2005 2006 2007 ces). Waste belongingtothe sion oftheitem“Excavation e lossesare nottakeninto s fpr-ie%080910060- 0 0.6 - 50 1.0 -11 36 15 0.9 109 25 0.8 -17.1% 6 -26 % 24 155 56 13 169 Use ofpart-time no. no. andtraineescollaboratingwithTerna Interns into permanentcontractsduringtheyear Training contractsexpired andconverted 152 126 no. during theyear Employees leavingtheCompany s foetm . . . . - 1 4.2 - 4.4 -0.1 - 4.9 46.6 -0.2 5.5 46.0 - 46.2 % 46.1 21.8 y 21.5 Use ofovertime 21.3 0.8% at theendofyear Training contractsinprogress 29 Contracts andflexibleworkingprocedures y Average yearsofservicein thecompany Average age 3,388 Education 3,475 UM 3,495 Professional qualification Breakdown 3,524 during theyear Employees joiningtheCompany Employees no. Numbers Indicator Social responsibility (2) Thefigures includeTraining Contracts(ContrattiFormazioneLavoro) andonefixed-termcontract. (1) The2005figure alsoincludesthestaff transferred toTerna followingthepurchase ofAceaTrasmissione andtheTSObranch Personnel Numbers Employee numbersandbreakdown okr 033. 183. 08------0.8 - - 1.0 -0.2 0.5 - -0.1 32.4 0.5 -2.0 18.1 42.4 2.2 53.5 1.2 31.8 26.3 11.9 18.0 43.0 53.4 13.2 2.2 31.1 24.0 12.6 17.2 44.0 53.7 15.0 2.0 30.3 23.0 13.3 17.0 45.0 54.1 15.8 1.8 % 21.0 13.8 % % % 17.0 % % % % Primary andMiddleschooldiploma Vocational Qualification High SchoolDiploma University degrees anddiplomas Workers Office Staff Middle Managers Executives (1) (2) o 6 3 98 425.8% 34 87 39 132 166 -44.6% -125 no. 672 254 280 155 no. 2008 0720 05Vr0-8Var 07-08% Var 07-08 2005 2006 2007 oftheCompanyfrom GRTN. 833.3% 45.8% 153 Tables of indicators 154 Sustainability Report 2008 vrttlnme ftann or . . . . . 207.7% 5.4 6.1 5.4 2.6 8.0 % over totalnumberoftraininghours Incidence ofDistanceLearning over fixedsalary Incidence ofvariablesalarybonuses edn ae o 16 0 4 1 -26.1% -18 8.3% -34.0% 1 149 -16 75.0% 15 16 104 12 -2.0% 9 69 23.3% 47 3 -2.0 10 12 51 47 97.0 13 42 87.0 13 no. 31 16 35 98.0 no. no. 28 43 Litigation definedduringtheperiod 96.0 Litigation filedduringtheperiod Pending cases no. Litigation withemployees 53 % Absences perhead Total ofspontaneous resignations Company climate h Training costsperemployee activities (Coverage) Employees involvedintraining UM Training hoursperemployee Training Average costperemployee Compensation Indicator nmngra oe 511. 251. . - - 1.8 0.4 12.0 5.3% 9.0 12.5 18 9.3 13.3 306 9.8 15.1 324 10.2 % 341 % 359 Salary paidtowomenstaff inotherroles UM staff inmanagerialroles Salary paidtowomen in managerialroles Incidence ofwomenstaff no. Incidence ofwomenstaff Women staff onthepayroll Equal opportunitiesforwomenstaff Indicator niec fwmnsafi te oe . . . . . - 0.2 8.6 8.7 9.1 9.3 % Incidence ofwomenstaff inotherroles Executives withstockoption netv LI lndrn h ern.4 55 8- -2.2% -1 58 52 45 44 no. Incentive (LTI) planduringtheyear Executives intheLongTerm (6) Litigationmainlyrelates tojudgmentsregarding thecalculationofEmployeeSeveranceIndemnityand,therefore, mainlycon (5) Theserefer tonon-contractualabsencesrecorded duringtheyear(illness,injuriesandstrikes). (4) Thetrainingcostsdonotincludethecostofstaff awayfrom theirnormaldutiesduringtraininghoursnorthehourlycost (3) There isonlyoneStockOptioninforce, whichwaspassedbyresolution onDecember21,2005andexpires onMarch 31,2010. (2) Thefigures refer toincentivespaidallcompanyemployees,includingseniormanagement;fringebenefitsare excluded. (1) Employee here meansanyoneemployedbytheCompany,(1) includingseniormanagement.Theincrease in2006ismainlyduetothe (2) Thismeansthetotalgross annualsalaryquotaforoffice staff andworkerspaid towomenstaff holdingnon-managerialpost (1) Thismeansthetotalgross annualsalaryquotaformiddleandseniormanagement paidtowomenstaff holdingmanagerialpost Equal opportunities Employee satisfactionanddevelopment okr o - 0 0.0% 2.2% 19.7% 0 0 6 12 8 249 0 49 260 10 0 54 270 10 0 61 276 10 73 no. no. no. no. Workers Office Staff Middle Managers Executives overtime, fringebenefitsandflat-ratepaymentsfortransfers. with seniorandmiddlemanagementoffice staff status,followingtheacquisitionofTSOcompanybranchfrom GRTN; thef (2) (5) (1) (6) (1) (4) (3) (2) o 51 71 1-6.3% -1 17 17 16 15 no...... - - 0.1 1.7 8.6 10.7 9.0 10.7 9.1 12.0 9.2 13.6 % % 48.1% 2.6 5.9 5.1 5.4 8.0 % 1. 1. 2. 2. 4-3.1% -4 126.0 125.7 115.6 112.0 h € € 0506,0 4495,6 ,0 4.4% 3,000 57,860 64,429 67,500 70,500 2008 2008 0 4 8 4 17-32.9% -147 442 282 447 300 0720 05Vr0-8Var 07-08% Var 07-08 2005 2006 2007 0720 05Vr0-8Var 07-08% Var 07-08 2005 2006 2007 ofin-houseteachers. s. cerns ex-employees. cerns s ofresponsibility. inclusion ofpersonnel igures donotinclude noiainrt %6. 656. 03-. - -2.5 70.3 68.8 66.5 64.0 - % 2 UM 1 25.0% Unionisation rate 10 1 Unionisation ofpersonnel Indicator 53 0 56 2 40 no. 50 company workers(seriousandfatal) Injuries atwork-Contract UM Contract companyworkers Injuries atwork- no. Injuries intheworkplace Injuries atworktoemployees Indicator Safety costsperemployee Lost DayRate eidclmdcleaiain o ,4 ,0 ,4 ,5 43-18.1% -453 2,052 1,547 2,502 2,049 no. Periodical medicalexaminations Injury Rate (3) Thefigures refer tocostsincurred inpurchasing PersonalSafetyEquipmentandclothing. (2) This istheratiobetweendayslostduetoinjuryandhoursworkedinyear, multipliedby200,000.Thedaysare cal (1) This isthenumberofinjuriesinvolvingatleastoneday’sabstentionfrom workdividedbythehoursworkedinyear, m Relations withtradeunions Safety fwih aaiisn.10111- 1 1 1 0 1 no. of which:fatalities Rate wouldbe1.8in2006,0.32007,and1.72008. of actualinabilitytoworkduringtheyearandHisnumberhoursworkedinsameperiod.According tothismethodof This indicatorisalsocalculatedinaccordance withtheUNI7249:2007standard usingthefollowingformula:G/H*1,000where G from thetimewheninjuryoccurred. TheformulacomplieswiththecriteriaofGlobalReportingInitiative. method ofcalculation,theInjuryRatewouldbe10.7in2006,7.32007,and8.62008. injuries involvingatleastoneday’sabstentionfrom workduringtheyearandHisnumberofhoursworkedinsameperi This indicatorisalsocalculatedinaccordance withtheUNI7249:2007standard usingthefollowingformula:N/H*1,000,000,whe 50 workingweeksmultipliedby40hours,100employees).TheformulacomplieswiththecriteriaofGlobalRep (1) eiu nuisn.10011- 1 1 0 0 1 no. serious injuries (2) (3) .214 .421 .7- - 0.27 277.77 2.14 378.00 2.14 361.50 1.45 51.23 329.00 1.72 % % € ,4 5 8 5 9 88.9% 491 355 580 552 1,043 2008 2008 0720 05Vr0-8Var 07-08% Var 07-08 2005 2006 2007 0720 05Vr0-8Var 07-08% Var 07-08 2005 2006 2007 ultiplied by200,000(equalto endar daysandare counted calculation,theLostDay is thenumberofdays re Nisthenumberof od. According tothis orting Initiative. 155 Tables of indicators

158 Sustainability Report 2008 Acronyms HV GSE GRTN GRI GIS GAAP ETSO ERA EPSES EPS ENS EMS EMO EIA EBIT DT DPS DP DAEM CSR CONSOB CIGRE CESI CEI CdP BoD AU ASA AIT AGC AEEG ACEA Energy Not Supplied Energy ManagementSystem Energy MarketOperator Environmental ImpactAssessment BeforeEarnings Interest andTaxes Distance Training Dividend PerShare Development Planofthenationaltransmissionelectricitygrid Day AheadEnergy Market Corporate SocialResponsibility Exchange) Commissione NazionaleperleSocietàelaBorsa(NationalCommissionforCompaniesandtheStock desGrandsRéseaux ElectriquesàHauteTensionConseil International Centro Elettrotecnico SperimentaleItaliano(ItalianElectrotechnical Testing Centre) Comitato Elettrotecnico Italiano(ItalianElectrotechnical Committee) Cassa DepositiePrestiti Board ofDirectors Acquirente Unico(ItalianSingleBuyer) Average SystemAvailability Average InterruptionTime Autorità GarantedellaConcorrenza edelMercato (ItalianAntitrustAuthority) Autorità dell’Energia ElettricaedelGas(ItalianAuthorityforElectricity andGas) High Voltage Gestore ServiziElettrici(Electric ServicesManagement) Gestore dellaRetediTrasmissione Nazionale(National Transmission GridOperator) Global ReportingInitiative Geographic InformationSystem Generally AcceptedAccountingPrinciples European Transmission SystemOperators Exclusion, Repulsion,Attraction Emergency PlanfortheSecurityofElectricitySystem PerShareEarnings Azienda ComunaleEnergia eAmbiente(MunicipalEnergy andEnvironment Company) ZPS VHV UCTE TSR TSO TOA TFR SRI SISTAN SETSO SEA SCADA S&P ROACE PCT PCB OECD NTG NCC N.A. MPA MELC MEF MED MDS MBO MBI ISTAT ISPRA IPO IPD IEA Special Protection Area Istituto Superiore perlaProtezione elaRicerca Ambientale South European Transmission SystemOperators Strategic Environmental Assessment Supervisory Control AndDataAcquisition Standard &Poor’s onAverageReturns Capital Employed Polychlorinated terphenyls Polychlorinated biphenyls Organisation forEconomicCooperationandDevelopment National Transmission Grid National Control Centre Not Available Ministry forProductive Activities(nowtheMinistryforEconomic DevelopmentMED) Ministry fortheEnvironment andLandConservation Ministry ofEconomyandFinance Ministry ofEconomicDevelopment Market forDispatchingServices Management ByObjectives Maintenance andBusinessIntelligence Italian NationalStatisticsInstitute Initial PublicOffering Individual Protection Device EnergyInternational Agency Very HighVoltage Union fortheCoordination ofTransmission ofElectricity Total Shareholder Return Transmission SystemOperator Transmission OperationalArea Trattamento diFineRapporto(Staff SeveranceIndemnity) Socially ResponsibleInvestment National StatisticalSystem 159 Acronyms 160 Sustainability Report 2008 Glossary An energy supplycontractbetween twomarketoperators. Bilateral contract standards forthedomesticelectricity marketandtheliberalisationthereof. Legislative Decree no. 79ofMarch 16,1999,whichwasissuedtoimplement ECDirective no.96/92/EC,regarding shared Bersani Decree bar systemofapowerstation. Group ofpowerplantsandaccessoryservingalineortransformerwhichconnecttheGridelements tothe Bay necessary forbalancing. The marketprovided andregulated withintheMarket forDispatchingServices(MDS)theprocurement oftheresources Balancing ServicesMarket(BM) • Uiisthenumberofusersinvolvedinn Where thesumincludesallnoutages thatoccurred intheperiodand/orcalendaryearandarea, andwhere: The averagenumberofoutagespergriduserdirectly connected totheNTGisdefinedbyfollowingformula: Average numberofoutagespergriduser(N) consistency assetforthinAttachment1oftheOperator/OwnerStandard Agreement. State inwhichagridelementmaybeusedfortransmissionactivitiesundertheconditionsprovided underoperational Availability ofagridelement Average real availabilityofallelementstheNationalTransmission Gridduringtheperiod. ASA (Average SystemAvailability) Average durationofinterruptionsupplytotheelectrical systemduringtheyear. AIT (Average InterruptionTime) the year, andHisthenumber ofhoursworkedduringthesameperiod. This iscalculatedusingthefollowingformula:G/H*1,000,where Gisthenumberofeffective daysofunavailabilityduring Accident seriousnessindex absence from workduringtheyear, andHisthenumberofhoursworkedduringsameperiod. This iscalculatedusingthefollowingformula:N/H*1,000,000,where Nisthenumberofaccidentswithatleastoneday’s Accident frequency index extent –incasethecrimesare actuallyperpetrated. to lawinstructions,thissystem(“231Organisational Model”)canalso avoidsanctionstothecompany–orreduce their crimes. 231Organisational Modelthusrepresents anintegratedsystemtoavoidspecificrisks;whendefinedaccording guidelines, procedures, trainingcommitmentandcontrol mechanismsthataimtoprevent theriskofcommittingsuch itself (e.g.publicmanagersbribery, companyfrauds,crimesagainstprivateperson,marketabuse).Themodelisasetof in caseofspecificcrimesperpetratedbymanagers,employeesorpartnerstheinterest oradvantageofthecompany 231 Organisational Modeltakesitsnamefrom LegislativeDecree no.231,2001.Thisdecree imposesacompany liability 231 OrganisationalModel • Utotisthetotalnumberofusersdirectly connectedtotheNTGduringcalendaryear. i=1 n Utot Ui th considered outage; (preliminary cumulativeprograms). of trading.Thismarketdeals with theenergy unitswhichdefinetheproduction andwithdrawal planforthefollowingday The tradingofbidsforthepurchase andsupplyofelectricalenergy foreachhourofthenext operatingdayfollowingthat Day AheadEnergyMarket(DAEM) importance. content isnottoberead byunauthorisedpersons.Thisisadataandinformationtreatment conditionofdirect commercial Data isconsidered confidentialif,whentransferred from onetelecommunicationsand/orprocessing system,thedata Data privacy Businesses ordistributioncompanies,wholesalersandthe finalbuyersofelectricalenergy. Customers European Commission,July18,2001). beyond, toinvestinhumancapital,theenvironment andinotherrelations withpartiesinvolved”(Green Book ofthe parties involved.Beingsociallyresponsible meansnotonlycompletelyfulfillingapplicablelegalobligations,butgoing intheircommercial“The integration,bythefirms,ofsocialandecologicalconcerns operationsandtheirrelations with Corporate SocialResponsibility(CSR) other stakeholdersofthecompany. ofthe company,The formofgovernance meaningthesystemofrelations betweenmanagers,directors, shareholders and Corporate governance for ancillaryservices. The group includingtheNationalTransmission Gridanddirectly connectedusers’plants,includingtheassociateddevices Controlled electricitysystem the entire electricitysystem. A group ofcalculationsystems,datatransmissionlinesandapparata whichenablesthesecure andeconomiccontrol of Control System System). A group ofplantsusedforthecontrol andoperationoftheNTGoraUser’selectricitysystem(different from aProduction Control Centre systems atplannedlevels,andtocontributetheregulation oftheinterconnection frequency. Electricity systemabletoregulate itsownproduction bymaintainingexchangesofpowerwithotherinterconnected Control area Power stationwhichispartoftheNTG,whosesupplyplantconnectedtooneormore powerlines. Connection station connection station. Any powerlinethatlinksthedistributionplantwithuser’splant,or Connection line connection isgenerallythelengthoflinewhichformsitself. circuitry isolatingapparata.Connectionsare classifiedbyvoltagelevelwithreference toratedvoltage.Thelengthofthe The group ofgridelementsformingthetransmissionline,andbaysatborders ofthesame,includingrelated Connection necessary forresolving congestion. The marketprovided andregulated withintheMarketforDispatchingServices(MDS)procurement oftheresources Congestion ResolutionMarket(CRM) an official document,signedbytheBoD,whichrequires thecomplianceofallpersonnel. rights anddutiesareas ofresponsibility thatthebusinessundertakestorespect indealingwithitsstakeholders.Itis It isoftencalleda“businesscharter”,asitrepresents thefoundationofcompany’sculture andexplicitlysetsforththe Code ofEthics 161 Glossary 162 Sustainability Report 2008 per year. Italy andabroad. Starting from May1,2003,eligiblecustomersare definedasthoseconsumingmore than100,000kWh The naturalorlegalpersonwho isfree tostipulatesupplycontractswithanyproducer, distributororwholesaler, bothin Eligible customer damaging and/orlethaleffects onanorganism dependingontheintensityofcurrent andthedurationofexposure. Phenomenon knownasanelectric“shock”,causedbycontact betweenabodyandelectricalcurrent. This canhave Electrocution Intended asthecombinationofEnergy MarketandtheforDispatchingServices(MDS). Electricity markets meet thedemandatanymoment,anddeterminesprice ofenergy atthatspecificmoment. The systemofwholesalesellingelectricity, whichdeterminespowergenerationsystemsorplantswillbeusedto Electricity market A group ofplants,linesandstationsfortransferringelectricalenergy and supplyingthenecessaryancillaryservices. Electricity Grid A company’sprofits (losses)before tax. Before Taxes)EBT (Earnings term GOP(Gross OperatingProfit), whichmeasures operatingprofits gross ofamortisationandallocationstoprovisions. Profit before taxes,financialincome/charges, write-downs, amortisationandextraordinary components.Itissimilartothe Before Interest,EBITDA (Earnings Taxes, Depreciation andAmortisation) income/charges andextraordinary components;itisalsocalledoperatingprofit oroperatingincome. One ofthekeyprofitability indicatorsfortypicalcompanymanagement. Itmeasures companyprofits before taxes,financial Before InterestEBIT (Earnings andTaxes) ordinary shares. Dividend perShare: calculatedasthetotalamount ofdividendsdistributedbyacompanydivideditstotalnumber DPS (DividendperShare) immediate profitability ofashare. Calculated astheratiooflastdividenddistributedbyacompanyandcurrent priceofitsshares. Itindicatesthe Dividend Yield the finalcustomers. The transportandtransformationofelectricalenergy onhigh-,medium-andlow-voltagedistributiongridsforsupplyto Distribution Transmission Grid,thegridsconnectedtosame,andancillaryservicesofelectricitysystem. The activityaimedatissuingprovisions forthecoordinated useandoperationofproduction plants,theNational Dispatching plants, totheNTG. Connection ofallplantswithexistingcircuit continuityatleastinonepoint,withouttheinterpositionofancillarypower Direct connectiontotheNTG interconnection capacity, oranincrease inoperatingflexibilityofthegrid,orremoval ofgridelements. Works ontheelectricitygridwhichleadtoadjustmentorupgradingoftransport,transformation,connectionand Development once suchastagehasalready begun,oremergency conditionsare already present. designed tomaintainorreturn anelectricitysystemtoanormalcondition,alsopassingthrough areinstatement stage, The control activities–automaticand/ormanualsetforthbyTerna andcarriedoutthrough singlesystemsand/orplants Defence plans Ti,j andPi,jare, respectively, theduration(inhours)ofoutageandinterruptedpower(MW)forj during thei The naturalorlegalpersonwho purchases electricalenergy exclusively fortheirownuse. Final customer • permanent,inallothercases. • transient, whenitiseliminated through theautomaticsequences ofimmediateopeningandreclosure ofthecircuit immediately takenoffline. Thefaultcanbe: The yieldingofanelectriccomponentoraconditiondanger toper Fault technical characteristics,asspecifiedinAttachments1,2a and2boftheOperator-Owner Standard Agreement. Performed fortherecovery andextensionoftheusefullifeaplant,withoutmodifyingfunctionalconsistency or Extraordinary maintenance the ethicalriskcontrol processes. task mustascertainandpromote continuousimprovement inethicswiththecompanythrough analysisandevaluationof Consists inverifyingtheapplicationofandcompliancewith theCodeofEthics.Thecompanymanagementassignedthis Ethical Auditing the stocksegment. Term usedtoindicatetheshareholders’ equityofacompany;inthecontextassetmanagement, itisusedtorefer to Equity Calculated astheratioofnetprofit tothenumberofacompany’s outstandingordinary shares. PerShare) EPS (Earnings m isthenumberofusersaffected bythei n isthenumberofoutagesinperiodunderobservation; direct andindirect usersaffected bythesameoutage,where: where thesumincludesalloutagesthat occurred intheperiodand/orcalendaryearandarea and,foreachofthese,all Energy NotSuppliedduetooutage,definedbythefollowingformula: Energy NotSupplied(ENS) Intended asthecombinationofDayAheadEnergy Market(DAEM) andtheRealTimeEnergy Market(RTEM). Energy market domestic andindustrialusers,withdifferent levelsofseverity. In caseofcriticalevents,EPSESsetsforththemethodsforselectivelysuspendingsupplyelectricalenergy to Emergency PlanfortheSecurityofElectricitySystem(EPSES) going offline oftheelectricitysystemitselforpartit. Group ofautomaticandmanualprocedures implementedduringcriticaloperatingperiod,inorder toavoidorlimitthe Emergency Plan in asshortatimepossibleand/orenable,emergency conditions, thelocalrunningofplants. Group ofoperationsexecutedfollowinganomaliesorfaultsonplan Emergency intervention load portions,duetofaultsordisturbances. Operational situationofanelectricalgridwhichresults inexceedingoperatinglimitsofgridelementsand/oroutages Emergency conditionofanelectricitysystem if thelengthexceeds15minutes,thisisestimatedbasedonforecast and/orhistoriccapacitypowerdiagram. Pi,j istheaverageconstantvalueoffirst15minutesifdurationinterruptionlessthanorequaltominu i=1 j=1 n m breakers; (P i, j * th T outage; i, j ) th outage; ts, toensure therecovery ofefficiency ofsuchplants sons orthings,whichresults inagridelementbeing th user affected tes; 163 Glossary 164 Sustainability Report 2008 Rated voltagegreater than35kVandlowerorequalto220kV. High voltage(HV) The naturalorlegalpersonwho suppliesorissuppliedbyatransmissiondistribution grid. Grid user The naturalorlegalpersonwhomanagesapowergrid,also withoutowningsaidgrid. Grid operator necessary ancillaryservices,aswellthedecisionstoperform maintenanceanddevelopmentworks. power grid.Saidactivitiesandprocedures includethemanagement ofelectricpowerflows,interconnection devicesand The activitiesandprocedures whichdeterminetheoperations andtheoperationsforecast, underanyconditions,ofa Grid management of theGrid,aswellcomponentsmakingupsuchelements. Circuit infrastructure ofthegrid,represented inasingleline diagramatasufficient levelofdetailtoillustratetheelem Grid Diagram • securityofthenationalelectricitysystem. • thesettlementoffinancialcharges connectedtothevariousservices; • thesupplyofservicesmeasurement andthe aggregation ofmeasurements; • theperformanceofdispatchingservices; • development,management,andmaintenanceoftheGrid; • accesstotheGridanditstechnicalregulation; specifically, theGridCodesetsforthtransparent, non-discriminatoryregulations for: and maintenanceoftheNationalTransmission Grid,aswelldispatchingandmeasurement ofelectricalenergy. More the proceduresThe documentthatgoverns regarding theactivitiesofconnection,management,planning,development Grid Code(Codefortransmission,dispatching,developmentandsecurityofthegrid) social andenvironmental performance. Reporting Framework,inorder tosupportcompanieswhich voluntarilydecidetopublishdataregarding theireconomic, association withtheaimofdevelopmentandglobaldiffusionAn independentinternational oftheSustainability GRI (GlobalReportingInitiative) Unit ofmeasurement equaltoonebillion watts(1,000megawatts). Gigawatt (GW) availability ofasuitablelevelpowerreserves. according toconditionsoftransparency andobjectivity, inorder topromote competitionbetween producers, ensuringthe Joint stockcompanycreated in2000byGRTN, whichisincharge oftheeconomicmanagementelectricitymarket GME) Gestore Mercato Elettrico(EnergyMarketOperator– are identifiedbytheEIRIS,through specificquestionnaires. Financial Timesindexwhichgroups thebestcompaniesmeetingspecificsustainabilityrequirements. Thesecompanies FTSE4Good object: suchasthecompanycanteen,lunchvouchers,carormobiletelephone. Compensation inkind,meaningbenefitswhichdonotconsistthepaymentofmoney, buttheuseofaserviceoran Fringe Benefit polarity tonegativepolarity. Itismeasured inHertz(Hz). current,The numberofoscillationspersecond,inwhichthevaluealternating suchasvoltage,variesfrom positive Frequency energy toeligiblecustomers. Market where producers andwholesalersofelectricalenergy, bothItalianandforeign, competefreely toprovide electrical Free market ents one hour. (Terawatthour, 1,000,000,000kWhs)measure electricalenergy. Theyare equaltoan amountofkWs(andmultiples)over (kilowatthour) anditsmultiples MWh(Megawatthour, 1,000kWhs), GWh (Gigawatthour, 1,000,000kWhs)and TWh kWh (kilowatt) unitofmeasurement ofpower(1kW=1,000J/sec),whichexpresses theamountofenergy perunitoftime. kW (kilovolt=1,000 Volts) unitofmeasurement ofvoltage. kV Unit ofmeasurement thatexpresses thequantityof electricityequalto1,000Watts provided orrequested inonehour. Kilowatthour (kWh) the electricalenergy andgassectors. Independent authoritycreated byLawno.481ofNovember14,1995,whichischarged withregulating andcontrolling Italian AuthorityforElectricityandGas(AEEG) of shares” and“Newlisting”. Indicates aninitialoffer ofshares ofacompanybeinglisted.Itissynonym“PublicOffer forSale”,“Publicsubscriptio IPO (InitialPublicOffering) Legislative Decree no.475ofDecember4,1992. IPDs mustcomplywithDirective EEC686/89andsubsequent modifications,withtheEN345regulations, aswell likely tothreaten hissafetyorhealthintheworkplace,as wellasanycomplementoraccessorydesignedforsuchpurpose. orheldbytheworker,Any equipmentdesignedtobeworn forthepurposeofprotecting himagainstoneormore risks IPD (IndividualProtection Device) • transientinterruptionifithasadurationofnomore thanonesecond. • short-terminterruption,ifithasadurationofmore thanonesecondbutnomore thanthree minutes; • long-terminterruption,ifithasadurationofmore thanthree minutes; less thanoneday. Aninterruptionwithoutnoticemaybeclassified as: All casesofinterruptionwhere users are notnotifiedinadvancethrough suitablemeansandwithadvancenoticeofno Interruption withoutnotice users involvedofthedurationinterruption,usingsuitablemeansandwithadvancenoticenolessthanone day. Interruption generallyduetotheexecutionofplannedinterventionandmanoeuvres onthegrid,preceded bynoticeto Interruption withnotice Condition inwhichthevoltageofterminalsdeliveringelectricalenergy forauserislowerthan1%oftheratedvoltage. Interruption to price-sensitiveinformation(”significantpersons”). subsidiaries, performedbypersonsinpossessionofsignificantcompanydecision-takingpowers,andwhichhaveaccess transparencyGoverns obligationsinrelation tothe market, foroperationsinfinancialinstrumentsofacompanyorits Dealing Internal Connection betweenelectricitygridsrequired forthetransferofelectricity. Interconnection ofelectricitygrid distribution gridsoreventwogenerationplants. currentHigh-voltage powerlineinalternating (AC)ordirect current (DC)whichlinkstodifferent electricaltransmissionor Interconnection line at aminimumofonepoint,withtheinterpositionancillarypowerplant,toNTG. Connection ofallplantsrelevant intermsoftheoperationstransmissionanddispatching,withexistingcircuit continuity Indirect connectiontotheNTG n 165 Glossary 166 Sustainability Report 2008 breakers, repair works are required ongridelementsorplantcomponents. systems, irrespective ofexecution oftheautomaticrapidreclosure orslowreclosure (automaticormanual)ofthecircuit Disturbance inwhich,following theautomaticopeningofcircuit breakers asaresult ofoperationtheprotection Permanent disturbance set forthinAttachment1oftheOperator/OwnerStandard Agreement. State inwhichagridelementmaybeusedunderconditions different tothoseprovided underoperationalconsistencyas Partial availabilityofagridelement Preparation ofplansandschedulesfortheoperationelectricitysystem. Operations planning • plantinspections. • themonitoringofstatusplants; • operationsforgoingoffline andforthesecurityofplants; • emergency assistancefollowingfaultoranomalies; • therunningofplantsinorder tocarryoutTerna’s orders andautonomousdeliveries; decisions regarding theoperationofGrid.Operationincludes: The methodicaluseofpowerplantsandaccessoriesaccording toprocedures codifiedintheimplementationof Operation components, andtherequired securitycriteriaare met(criterionn-1). Situation inwhichthetotalloaddemandissatisfied,stableregime there are noviolationsofoperatinglimitssystem Normal conditionofanelectricitysystem components, buttherequired securitycriteriaare notmet. Situation inwhichthetotalloaddemandissatisfied,stableregime there are noviolationsofoperatinglimitssystem Normal alarmconditionofanelectricitysystem amendments andadditions. Electricity gridfornationaltransmissionassetforthbytheMinisterofIndustryDecree datedJune25,1999andsubsequent National Transmission Grid(NTG) services andinterconnection anddispatchingdeviceslocated intheItalianterritory. The nationalelectricitysystemcomprisesthetotalofproduction plants,transmissionanddistributiongrids,auxiliary National electricitysystem All theactionsthrough whichthecurrent operationalstatusofanelectricitysystemisascertained. Monitoring Unit ofmeasurement equaltoonemillionwatts(1,000kilowatts). Megawatt (MW) Rated voltagegreater than1kVandlowerorequalto35kV. Medium voltage Services Market(BM). is required tobecomposedofseveralmarkets:CongestionResolutionMarket(CRM),Reserves(RM),Balancing The marketforthenegotiationofprocurement ofseveralresources required forthedispatchingservice.Ingeneral,it Market forDispatchingServices(MDS) into accountanydecrease inperformance. Operations andworksforthemaintenanceorrecovery ofefficiency, andsmoothoperationoftheelectricplants,taking Maintenance Diagram whichshowsthepowerdemandonanelectricitygridovertime. Load curve of thesupplytoclient. Group ofremote datatransmission deviceswhichallowsforthemanagementof plants andthecontrol andmeasurement Remote control andtelemetry system • security: capabilitytorespond tosuddendisturbancessuchasshort-circuits orforced lossofcomponentsthe • availability: capabilitytorespond, staticallyandineverymoment,tothecustomers’globaldemandforpower The fulfilmentoftwoconditions: Reliability conditions are carriedout. Situation inwhich,followingtotalorpartialloaddisconnection, theactionsrequired toreturn thesystemtonormal Reinstatement conditionofanelectricitysystem input andwithdrawaldefinedontheDayAheadEnergy Market(DAEM). The siteoftradingbidsforthepurchase andsupply ofelectricalenergy inorder toadjusttheprogrammes ofenergy Real TimeEnergyMarket(RTM) starting from thesymbol"AAA","AA+",toarrive at theworstrating,indicatedby“D”. positively ornegativelyinfluencetheimageofcompanyandasignificantparttrading.Thehighestratingisindicated announced atthemomentofissuingsecurity, butmaybesubsequently modified(upratingordownrating),whichwill specialised ratingagencies.Themostwell-known,onthegloballevel,are Moody’sandStandard &Poor’s.Ratingsare tools forforecasting andcontrolling securitiesmarkets.Ratingsare theriskofinsolvencyinmodern publishedby Letter symbolwhichexpresses thelevelofrisksecurities representing aspecificdebt.Thisisoneofthemostsignificant Rating Value ofthevoltageusedtodesignateoridentifysystem. Rated voltageofthesystem Generation ofelectricalenergy, inanyway. Production Continuity andregularity overtimeofthevoltageandfrequency valuesoftheelectricalenergy supplied. Power supplyquality electrical energy tothelowestvoltageusablebyuser. lines ofagrid,fortransferringtheelectricalenergy betweengridswith different levelsofvoltage,andfortransformingth The partofagridwhichisconcentratedandclosedinspecifiedsite,usedforswitchingelectricalenergy amongthe Power station conditions, followingthegoingoffline oftheelectricitysystemitselforpartit. Group ofautomaticandmanualprocedures whichenablereinstatement oftheelectricitysystemtonormaloperational Power restart plan The activitiescoordinated byTerna inorder torestore anelectricitysystemafterablack-out. Power recovery to satisfytheenergy requirements withrespect toqualityandcontinuityofservice. Definition oftheusageplans,foraspecificperiodtime,availablemeansproduction andtransmission,inorder Planning plan, orsubsequentlyagreed. Maintenance, notofanurgent nature, whichlastsmore thanorequalto5totaldays,scheduledintheannualunavailability Planned maintenance electricity system.Thus,thisaspectspecificallyconsiders transition effects whichare notcovered bythefirstcriterion. the electricitysystem; electrical energy attheconnectionpoints,takingintoaccountplannedandforced goingoffline ofthecomponents e 167 Glossary 168 Sustainability Report 2008 only indirectly affected, suchasthegeneralpublicbearinganinterest inthe protection oftheenvironment. company’s activitiesineconomic terms–suchasshareholders, employees,customersand suppliers–butalsowhen Everyone (individuals,groups, organisations, institutions)interested inthecompany, especiallyifdirectly affected by Stakeholder rights, whilethesecondtypesociallyresponsible companiesare chosenforinvestment(i.e.,thosewithCSRpolicies). of companies(e.g.tobaccoproducers, armsmanufacturers etc.)orcountrieswhichdonotrespect humanrightsorworkers’ choice ofshares isguidedbynegativecriteria(exclusion)orpositive(inclusion):thefirsttypeexcludesspecific Investments whichtakeintoaccountnotonlyeconomicperformance, butalsosocial,environmental andethicalcriteria. The SRI (SociallyResponsibleInvestment) guarantees theapplicationofasinglenationaltariff tothese customers. the supplyofelectricalenergy underconditionsofcontinuity, securityandefficiency oftheservice.TheSingleBuyer A stockcompanyestablishedin2000bytheNationalTransmission Grid Operator(GRTN) toguaranteeCaptiveCustomers Single Buyer supplied. Quality ofthetechnical/commercial servicesprovided tousers,andthequalityofelectricparametersenergy Service qualityofelectricalenergysupply two categories:rotating reserves andcoldreserves. Generally, basedontheoperationalstatusofgroups whichcanmakethereserve available,itcanbeclassifiedinto due tobreakdowns) andunexpectedvariationsintheprogrammes ofexchangewithforeign countries. variations inrequirements, errors intheforecast ofrequirements, unexpectedunavailabilityofgeneration(forexample, Share ofpowerinthegeneration poolwhichmustcovertheimbalancebetweenproduction andload,duetorandom Secondary powerreserve • onthefault,ifactivityfollowsuponexistenceofanomalies. • non-deferrableiftheexecutionofactivity, basedontheowner’s evaluationmustbeperformedimmediatelyandno deferrable maintenance,iftheexecutionofactivitymaybedelayedbyatleastoneweekfrom themomentthatTerna• Occasional routine maintenanceisdividedinto: • occasionaliftheactivityfollowsuponexistenceofanomalies. • conditionalorpredictive iftheactivityfollowsverification ormonitoringofplantfunctionality; • periodicorcyclicaliftheactivityregards regularly causes; scheduledinterventionsindependentofexternal is definedas: to afallinperformance,withoutanymodificationofthenumberorfunctionplantsinvolved.Routinemaintenance Activity carriedoutonplantsorpartsofformaintenancerecovery ofefficiency andcorrect functioning,inrelatio Routine maintenance Index ofreturn oninvestedcapital;itiscalculatedastheratioofEBITandnetaveragecapitalemployedbyacompany. onAverageROACE (Returns CapitalEmployed) and tertiaryreserves. The marketprovided andregulated withintheMarketforDispatchingServices(MDS)procurement ofthesecondary Reserves Market(RM) day, monthandyear. Demand forelectricalenergy tobesatisfiedbythenationalelectricity system.Itshowsavariabletrend throughout the Requirement in theinterconnection pointswiththeNationalTransmission Gridorwithotheroperators. (caused bothbyremote commandsandinterventionsofprotection orbyautomaticequipment),andeventsofblack-out registers, automaticallyandcontinuously, theeventsofopeningandclosure ofcircuit breakers andothercommanddevices The systemusedtoremotely manageandsupervisethehigh-medium-voltagedistributiongrid.Thissystemalso Remote control equipment(withreference totheregistration oftheinterruptionsindistributionelectricalenergy) existence ofafault; more thanoneweekfrom thenotificationofanomalytoTerna, inorder toavoiddangerpersonsorthings,the is notifiedoftheanomaly; types n • duetofault,iftheresult ofthe existenceofafault; • non-deferrable,ifitinvolves occasionalmaintenancewhichcannotbedeferred; • deferrable,ifitinvolvesoccasional maintenancewhichcanbedeferred; Occasional unavailabilitymay be: occasional, ifnotincludedinthe annualplan,butincludedinthequarterlyunavailabilityplan andhasadurationgreater• planned, ifitisincludedintheannualunavailabilityplanorquarterlyplan,andhasaduration ofl • Situation inwhichanelementoftheGridisnotusableby operatorfortransmissionactivities.Unavailabilitymaybe: Unavailability ofagridelement and solditondateY. Thiscalculationconsidersallpaiddividendsreinvested inthe securityatthecouponpaymentdate. of period.ThecalculationTSRprovides theannualrateofreturn foraninvestorwhopurchased asecurityondateX following formula:(Share priceatendofperiod-Share priceatbeginningofperiod+Dividends)/Share priceatbeginning This isthemostcompletemeasurement ofvaluecreated byacompanyforitsshareholders. Itiscalculatedusing the TSR (Total Shareholder Return) current.phase electricfieldusedonthegridinalternating Group ofthree conductors(orgroups ofconductors),eachprepared for thetransportofonephasesthree- Triad stations andtransformingstations. Infrastructures dedicatedtothetransmissionofelectricalenergy, belongingtotheNTG,suchaslines andswitching Transmission plants to thedistributiongridsorusers. High- andvery-high-voltagepowerline,overheadorcable,usedforthetransportofelectricityfrom theproduction plants Transmission line • annualauthorisationofmaintenanceworks. • theplanningandidentificationofdevelopmentactivities; • the unifiedmanagementofGridandparts ofelectricalstationsnotincludedinsaidgrid,butconnectedand The activityoftransportingandtransformingelectricalenergy onthegrid.Transmission activitiesinclude: Transmission activities of deliverytocustomers,distributors,andrecipients ofself-produced energy. Electricity transportandtransformationactivitiesalongtheinter Transmission of voltage. Part ofagridcomposedgroup ofapparatausedfortransferringelectricalenergy betweengridswithdifferent levels Transforming station Electrical machineusedfortheconnectionandtransferofenergy between gridsatdifferent voltagelevels. Transformer in order toacquire themeasurement datafrom themeasurement devices. Infrastructure composedofaphysicalmeansandhardware/software devicesrequired bythePrimaryAcquisitionSystem Telecommunications system interface, forpresenting datatooperatorsinthecontrol centers. Computerised systemforcontrolling production andtransmission,withdataacquisitionfunctionshuman-machine Supervisory Control andDataAcquisitionSystem(SCADA) pulses inproportion tothepower. Energy meterinwhichthecurrent andvoltage,whenappliedtoanelectronic measurement element, produce frequency Static powermeter than orequaltofivedays; it isnotincludedinthequarterlyplanbutmonthlyplan. than fivedays; and CraftsdatedJune25,1999; functional totransmissionactivitiespursuantart.3,comma5,oftheDecree oftheMinisterIndustry, Commerce connected high-andvery-high-voltagegridforthepurposes ess 169 Glossary 170 Sustainability Report 2008 activities inthecountriesofEuropean Community. The naturalorlegalpersonwhichpurchases electricalenergy withoutcarryingoutproduction, transmission,ordistribution Wholesale customer Unit ofmeasurement ofelectricpower. Watt Unit ofmeasurement ofvoltage. Volt Rated voltagewithavaluehigherthan220kV. Very highvoltage(VHV) Coordinated managementofallportionstheNTG. Unified Gridmanagement causes,iftheresultdue toexternal oftheneedsthird partiesoreventswhichcannotbeattributedtotheowner,• such of publicauthorities. as: worksortestsrequested byoperators/ownersofbordering gridsorotheroperators,naturaldisaster, orrequirements

2008

Report 174 Sustainability Report 2008 Report

175 Coordination and Development by Terna S.p.A.

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Published on september 2009 ROMA WE WORK FOR A GRID

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