Transcript Diapositive 1

The big picture in the EU
Managing conflicting objectives in tariff design
Tom Maes, Vice-Chair CEER Gas Working Group
Understanding the impact of regulatory incentives
4th Workshop of Eastern Partnership, Moldova, 26-27 March 2015
Presentation outline
From
revenues to
tariffs
Regulatory
regimes
Unbundling
and
regulation
Objectives
and
incentives
Unbundling and regulation
Production /
import
Transport
Wholesale
Gas producer /
Power generator
Competitive activities
Transmission
system
operator
Supply
Retail
Distribution
system
operator
Monopolistic activities
Consumer
Competitive activities
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Defining a regulatory regime
Cost-plus
Revenue
cap
Price cap
RIIO
• Pass through of system operator’s costs (no incentive)
• Fair return on investments (no excessive monopolistic return)
• Only efficiently incurred costs shall be covered (RPI-X)
• No volume risk
• System operator is exposed to demand fluctuations
• Need for assumptions on the cost drivers per unit sold
• Revenue using Incentives to deliver Innovation and Outputs
• Quality control needed to assess primary and secondary deliverables
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Setting the (allowed) revenues...
REGULATORY ASSET BASE
(RAB)
X
RATE OF RETURN
=
RETURN ON RAB
+
DEPRECIATION
+
ALLOWED
REVENUES
OPERATING COSTS
(OPEX)
+
OTHER COSTS
Transporting gas has a cost which has to be recovered by regulated tariffs
► Only efficiently incurred costs shall be covered
… to fixing the tariffs
Allowed
Revenue
Transmission
Services
Revenue
Revenue
Reconciliation
System users shall pay
their share of the costs
Publication
► Transparency
► Non-discrimination
► Avoidance of crosssubsidies
► Cost reflectivity
Nonstandard
products
(multipliers)
Cost
Allocation
Methodology
Secondary
adjustments
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Balanced incentives
Investments
Quality
Cost efficiency
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Future EU network code on harmonised
gas transmission tariff structures
Transparency
• Publication requirements
• Consultation requirements
• Minimum notice period for tariff publication
Efficient trade & competition
• Capacity based pricing
• Default rule on entry-exit split
• Limited range of multipliers / seasonal factors
• Harmonised pricing of non-firm products
Avoidance of cross-subsidies & discrimination
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€
• Harmonised approach to cost allocation – one of 4 methodologies determined by circumstances,
counterfactual and cost-allocation test
• Harmonised approach to rescaling, equalisation and benchmarking
Framework for efficient investment
• Harmonised revenue reconciliation
• Economic test for incremental/new capacity
• Payable price – predictability for all users
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Thank you
for your attention!
Thanks for your attention!
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Contact
Tom Maes

+ 32 22 89 76 57

[email protected]

www.energy-regulators.eu
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