ACER has published a Recommendation on incentives for projects of common interest and on a common methodology for risk evaluation.
ACER assessed national practices regarding risk evaluation and noted that in the large majority of Member States (23 for electricity, 24 for gas) the allowed cost of capital for regulated infrastructure is determined on the basis of the capital asset pricing model. This approach focuses on the identification of the level of systematic risk for the overall transmission activity. It is consistent with the hypothesis that different projects belonging to the transmission activity have the level of systematic risk of the overall transmission activity and that the non-systematic (diversifiable) risk can be eliminated or significantly reduced by the TSO or project promoter through diversification.
ACER recommended to NRAs a 7-step common risk evaluation methodology, which should consider the distinctive features of and the measures taken in the different national regulatory systems, in order to assess to what extent the risk for the project promoters is higher than the risk of a comparable project. Indeed, the available measures for mitigating the risk faced by project promoters may be different across Member States. In particular, ACER considered that project risks can be subsumed under five categories of risks from the perspective of project promoters: the risk of cost overruns, the risk of time overruns, the risk of stranded assets, risks related to the identification of efficiently incurred costs and liquidity risks.
Next, ACER assessed national practices regarding risk mitigation regulatory measures (rules for anticipatory investment, rules for recognition of efficiently incurred costs before commissioning of the project and other regulatory measures) and monetary reward or penalty schemes, which typically consist of rules for providing additional return on the capital invested.
As general principle, the risk-related incentives should be commensurate with the PCI’s specific risk level as borne by the project promoters, while NRAs may also grant incentives, where appropriate, to all infrastructure projects (for example benefit-related incentives that are independent of the risk profile of a project). Furthermore, ACER took the view that NRAs should be free to decide on the combination of regulatory measures and monetary reward/penalty schemes, while consistency between the national regulatory frameworks may be important for cross-border PCIs. The Agency also considered that the existing national frameworks already offer a wide span of regulatory measures that protect project promoters from many risks. On this basis, ACER provided its recommendation to NRAs for particular risk mitigation measures. For more details, please see the ACER Recommendation.