The territory of Italy is divided into 177 distribution areas each of them will be auctioned. The regulation of these tenders requires to integrate the economic and technical offers with specific social cost-benefit analyses (CBA) proving the benefits of the different proposed investments in natural gas distribution facilities. This paper proposes an original method to carry out such a social cost-benefit analysis taking into account the different typologies of investments and namely projects to connect new customers, projects to increase security of supply, projects to improve service quality and finally investments to reduce the risk of severe accidents. An overall formula is also proposed in order to account for the possible combinations of the projects mentioned above.
Keywords: Natural gas distribution, cost-benefit analysis
Jel Code: Q4, Q5, H23, H43