The Legislative Decree No. 79 of 16 March 1999 implements Directive 96/92/EC, establishing common rules for Italy’s internal electricity market and initiating its liberalization. The decree defines the legal framework for production, import, export, purchase, and sale of electricity, which become free activities subject to public service obligations, while transmission and dispatching remain state-reserved functions managed by a national transmission operator under concession. Distribution continues under concession until 2030, with future assignments through competitive procedures. The Decree introduces key entities: the transmission system operator, responsible for network management, security, and non-discriminatory access; the “Acquirente Unico,” ensuring supply for captive customers; and the market operator, tasked with organizing economic transactions under transparent and competitive conditions. It sets principles for bilateral contracts, rules for small isolated networks and limits on market concentration. Priority is granted to electricity from renewable sources, nuclear generation, and cogeneration. The Decree also regulates concessions for large hydroelectric derivations, transferring ownership of works to regions upon expiry and establishing procedures for reassignment through public tenders, with provisions for environmental improvements and compensation to local communities.