The transformation of Milan's city energy enterprise in a leading national industrial group

Traditionally, in the city of Milan, energy services were supplied by the AEM, the in-house energy enterprise that was established in 1910. While being part of Milan' city administration, the AEM was an example of efficient management and dynamic entrepreneurship in the public sector. Since the beginning of the 1990s, as in other large cities of Northern Italy, changes in the regulatory framework for the provision of local public services, along with opening to competition of the energy sectors, favoured the involvement of private capital in the AEM that went through an accelerated process of corporatization and ultimately privatization. Presently, the AEM, now part of the A2A Group, the largest Italian multi-utility, operates in different network industries, including energy, water and waste. By looking at the A2A case history, this paper seeks to understand to what extent the original objectives of privatisation and liberalisation of local public services and energy markets have been achieved. It explores the underlying reasons of the public ownership and how this materializes in the enterprise's business choices and how this conflicts with commercial interests