Today, ACER publishes its report on the Czech gas transmission tariffs directed at the Energetický regulační úřad/Energy Regulatory Office (ERO), the Czech national regulatory authority.

The report assesses whether the proposed reference price methodology complies with the requirements of the EU binding Network Code on Harmonised Transmission Tariff structures. 

What is the proposed tariff methodology about?

The regulator proposes to:

• Adopt a capacity weighted distance methodology as the reference price methodology.
• Adjust the entry-exit split from the current 9-91% to 15-85%. 
• Reduce the discount applied to entry and exit points of storage facilities from 100% to 80%.

What are the key findings? 

After analysing the consultation document, ACER concludes that:

• The proposed methodology largely complies with the requirements of the network code.
• Most required information is provided, with the exception of the calculation and components of the cost allocation assessment. 
• The proposed commodity-based charge generally aligns with Article 4(3) of the tariff network code (which sets the rules for commodity-based tariffs). 

What does ACER recommend? 

ACER recommends that the national regulatory authority (ERO), when adopting its final decision:

• Consults on any benchmarking adjustments, respecting the two-month consultation period set in the tariff network code. If this timeframe cannot be met, ACER recommends that ERO provides the longest possible consultation period, anticipating the opening and closing dates to stakeholders and ACER.
• Justifies the results of the cost allocation assessment, providing an explanation on how the outcomes vary when different assumptions are used. This should help identify the most suitable methodologies for the transmission network.
• Justifies the use of an alternative pricing mechanism for the flow-based charge at interconnection points. For this purpose, ERO should demonstrate that there is a significant risk of volatility in cross-system flows that could impact the cost reflectivity of the flow-based charge.

See all ACER reports on national tariff consultation documents.

Today, ACER releases its report on the Lithuanian gas transmission tariffs directed at the Valstybinė Energetikos Reguliavimo Taryba (VERT), the national regulatory authority (NRA) of Lithuania.

The report assesses the compliance of the proposed reference price methodology (RPM) with the requirements of the Network Code on Harmonised Transmission Tariff structures. 

What is the proposed methodology about?

The Lithuanian regulator proposes to:

• Apply a postage stamp reference price methodology with flexible entry-exit splits, complemented by a 100% discount at entry points for domestic biomethane producers.
• Align entry tariffs with those of the neighbouring FinEstLat (Finland, Estonia and Latvia) zone.
• Simplify the existing tariff structure by abandoning the previously applied system based on multiple asset cost splits and differentiated tariffs.
• Use a flow-based charge (commodity-based tariff) with a fixed tariff level for the entire regulatory period.
• Offer a conditional product with limited allocability (i.e. the product can only be used to ship gas to pre-defined system points) at entry and exit points with non-EU countries.

What are the key findings? 

After analysing the consultation document, ACER concludes that:

• The proposed methodology meets the requirements on transparency, non-discrimination, and volume risk.
• Compliance with the requirements on cost-reflectivity, avoidance of cross-subsidisation, and prevention of cross-border trade distortions cannot be fully assessed, due to several design elements of the methodology.
• While the criteria for setting the flow-based charge are met, further clarification is needed on how the charge will be adjusted and reconciled. 
• Simplifying the tariff structure has made the methodology more understandable for system users.

What does ACER recommend? 

ACER recommends that the national regulator, when adopting its final decision:

• Provides a clear framework for the flow-based charge, preferably by recalculating its level annually.
• Ensures full compliance of non-EU entry and exit points with the network code. 
• Assesses regional networks and allocates their costs in a compliant way, in line with EU rules and ACER’s guidance.

See all ACER reports on national tariff consultation documents. 

Today, ACER releases its report on the Slovakian gas transmission tariffs proposed by Eustream A.S., the Transmission System Operator (TSO) of Slovakia.

The proposed methodology considers the changes in network patterns caused by the 2022 energy crisis. To address these, Eustream proposes:

• Adopting a postage stamp reference price methodology (RPM) with a revenue split of 37.5/62.5 between entry and exit points.
• Using a benchmarking adjustment to lower tariffs and attract additional flows to the network.

What does ACER recommend?

ACER analysed the information provided by Eustream to assess the compliance of the proposed methodology with the requirements of the Network Code on Harmonised Transmission Tariff Structures (NC TAR). Based on this analysis, ACER provides the following recommendations:

• Review the revenue regime applicable to Eustream.
• Apply the benchmarking adjustment only to points of the Slovak network that are in competition with other networks across the EU.
• Clarify how the systematic under-recovery borne by the TSO is managed.
• Assess the split of revenue and capacity between existing contracts (concluded before 6 May 2017 and defined by Article 35 of the NC TAR) and the proposed RPM.
• Review the contracted capacity forecast, which serves as an input to the RPM.
• Justify the level of the proposed risk premium considering the risks faced by the TSO.

What are the next steps?

On 5 June 2024, URSO, the National Regulatory Authority (NRA) of Slovakia, approved Eustream’s tariffs (covering the period from 1 January 2025 to 31 December 2027) after receiving ACER’s preliminary feedback.

ACER invites URSO to consider the recommendations included in this report, either by complementing its motivated decision (published on 5 June 2024) or in the next consultation on the RPM (provided this occurs by 2025).

Access all ACER reports on national tariff consultation documents.

Today, ACER releases its report on the Czech gas transmission tariffs proposed for 2025 by the Energetický regulační úřad (ERO), the National Regulatory Authority (NRA) of the Czech Republic.

Recent changes in the patterns of the European gas imports (resulting from Russia’s invasion of Ukraine) have led to the underutilisation of the Czech natural gas transmission infrastructure. Additionally, future flows into the network face considerable uncertainty due to the termination of the transit contract for gas transportation through Ukraine scheduled by the end of 2025.

To address these issues, ERO proposes to apply:

• A capacity weighted distance methodology as the reference price methodology (RPM).

• Several mechanisms to address this volume risk, including the implementation of a price cap regime and a risk premium. These mechanisms aim at allocating the existing risk to the TSO. The NRA recommends applying these measures until the end of 2025, when greater stability and visibility on gas flows across the EU is expected.

What does ACER recommend?

ACER analysed the information provided by ERO and assessed the compliance of the proposed RPM against the requirements of the Network Code on Harmonised Transmission Tariff Structures (NC TAR), providing the following recommendations:

• Ensure transparency and consistency of the proposed reference price methodology.

• Provide additional information on the risk premium collected by the TSO in 2021 and 2022.

• Provide further details on the revenue reconciliation and revenue sharing mechanisms, proposed by ERO to mitigate the volume risk of the network.

• Monitor and analyse the differences between the flow-based charge applicable to domestic exit points and the one applied to Interconnection Points’ (IPs’) exits.

What are the next steps?

By 19 October 2024, ERO shall adopt a motivated decision on the new tariff methodology to be applied to the Czech transmission network, taking into account ACER’s analysis.

Access the report.

Access all ACER reports on national tariff consultation documents.

ACER releases its report on the Dutch gas transmission tariffs, directed at Autoriteit Consument & Markt (ACM), the National Regulatory Authority (NRA) of the Netherlands. The report provides guidance on addressing the requirements of the Network Code on Harmonised Transmission Tariff structures (NC TAR) when defining the gas transmission reference price methodology (RPM) for the period 2025–2029.

For the new methodology, building on the previous one, ACM proposes to:

• Apply the same postage stamp RPM of the past regulatory period (2020-2024).

• Increase the discount at the storage facilities’ entry and exit points.

• Introduce a discount at Liquified Natural Gas (LNG) facilities’ entry points.

What does ACER say?

ACER identified several elements (required by the NC TAR) that are not adequately addressed in the consultation process established by ACM. Consequently, it is not possible to conduct a complete assessment on whether the methodology resulting from this process complies with the network code.

To address these concerns, ACER recommends ACM to:

• Compare the proposed RPM with the capacity weighted distance methodology, that reflects the current network characteristics and utilisation, and consider these findings when justifying the RPM.

• Publish a representation of the networks' structure, including the relevant infrastructure changes compared to the previous motivated decision.

• Enhance future tariffs predictability by incorporating forecasts of contracted capacity for 2025–2029, along with the methodology and assumptions used for their calculation.

• Include a cost allocation assessment comparing different scenarios (with or without the storage and LNG discounts) for the relevant regulatory period.

• Further justify the reasoning for the proposed discount at LNG entry points, clearly distinguishing the role of the discount as a means to increase security of supply.

What are the next steps?

By 14 July 2024, ACM shall adopt a motivated decision on the new gas tariff methodology to be applied to the Dutch transmission network, taking into account ACER’s recommendations.

Access the report.

Access all ACER reports on national tariff consultation documents.

ACER publishes today its report on the proposed gas transmission tariffs for Portugal. This report assesses the reference price methodology proposed by the Portuguese national regulatory authority, ERSE, and provides a recommendation for its motivated decision on the final methodology to be applied.

What does ACER say?

ACER concludes that ERSE's proposed reference price methodology (RPM) is appropriate for the Portuguese transmission network but finds one issue to address.

The costs allocated using the RPM also take into account regional networks as opposed to just the Portuguese national transmission network. The use of a single methodology allocating the costs of both networks can potentially result in cross-subsidies between the users of both types of infrastructure (i.e. users of the transmission network may bear the costs of regional networks).

While the proposed RPM partially limits cross-subsidisation between the transmission networks and the regional networks, it does not completely prevent this. ACER recommends that the methodology is adjusted so that the costs of regional networks are not allocated to the transmission network.

What are the next steps?

ERSE should take a motivated decision by 4 May 2024 on the methodology to set the tariffs for the coming regulatory period (from 2024 to 2027).

Access the report.

Access all ACER reports on national tariff consultation documents.

ACER publishes today its report on Lithuania’s proposed gas transmission tariffs.

ACER provides recommendations to the Lithuanian national regulatory authority (NRA), VERT, particularly regarding the existing regional networks and the need to enhance transparency on the proposed asset splits.

What is in the report?

ACER assessed the proposed methodology to calculate the gas tariffs, including:

• The treatment of regional networks;
• The tariffs applicable to the transmission service to the Kaliningrad District; and
• The tariffs applicable to the domestic exit to the Achema fertilizer plant.

What are ACER’s main findings?

ACER recommends to the Lithuanian NRA, VERT, to implement improvements:

• On regional networks, ACER recommends that VERT changes the category of regional networks from transmission to distribution.
• On the asset split applicable for the transmission to Kaliningrad, VERT should provide clarity on the criteria used to establish the asset split.
• On the proposed tariff differentiation to the domestic exit point to the Achema fertilizer plant, ACER recommends specifying the criteria on which a consumer, including Achema, could get a different tariff compared to all other regional network exits.

Access the report on the Lithuanian gas tariffs.

Access all ACER reports on national tariff consultation documents.

The EU Agency for the Cooperation of Energy Regulators (ACER) publishes its report on Denmark’s proposed tariffs applicable for filling gas storages and for the emergency gas supply to non-protected consumers.

What is in the report?

ACER assesses the proposed tariffs, which have two components:

• A postage stamp ex-ante tariff used to store gas in Danish storages for non-protected consumers; and
• An ex-post tariff used to charge non-protected consumers for the gas supplied in case of an emergency event.

What are ACER’s main findings?

ACER considers that the proposed tariffs are compliant with the EU Network Code on Gas Transmission Tariffs.

ACER recommends the Danish National Regulatory Authority (NRA), Forsyningstilsynet, to provide greater transparency on the proposed tariffs by describing with greater detail the ex-ante and ex-post components.

Background

ACER provided its preliminary conclusions to the NRA on 28 September 2022. The NRA published its final decision on the proposed tariffs on 30 September 2022. The report published today is the result of complete analysis performed on the compliance of the proposed tariffs.

Access the report on the Danish gas tariffs.

Access all ACER reports on national tariff consultation documents.

The EU Agency for the Cooperation of Energy Regulators (ACER) publishes today its second report on the implementation of the European Union Network Code on Harmonised Transmission Tariff Structures for Gas (NC TAR) for the Austrian transmission system.

The report focuses on the introduction of a commodity tariff, which aims at allocating the costs resulting from the recent increase in energy prices taking place in 2021-22 and forecasted for 2023-24. Transmission system operators’ (TSOs) networks require energy to run compressor stations, and the prices of both electricity and gas have increased, compared to the initial estimates made by the national regulatory authority (NRA) in 2020. As a consequence, the Austrian NRA, E-Control, is consulting on the possibility to introduce a commodity charge by 1 June 2022.

What are ACER’s recommendations?

ACER recommends to E-Control to further justify why the proposed commodity tariffs should be applied before the end of the on-going tariff period, which concludes in 2024. Such changes should take place only exceptionally.

In particular, the NRA should:

• provide additional information on how the increases in energy prices affect TSOs’ capacity to continue operating the network;

• further justify the entry into force date of the proposed commodity tariffs based on the TSOs’ capacity to continue operating the network;

• increase the transparency of TSOs’ tenders for purchasing energy, and ensure that these procedures have taken place in a transparent, competitive and non-discriminatory manner.

ACER further notes that, according to the NC TAR, the same flow-based charge should be set at all entry and/or at all exit points. The proposed flow-based charge is not applied at entry points from storage.

Finally, ACER recommends to the NRA to publish the decisions on the TSOs’ allowed revenue, including the initial decision applicable to the current tariff period and the recently adopted amendments to allocate the increase in energy prices. These decisions contain key information for the calculation of the proposed flow-based charge.

E-Control shall adopt a motivated decision on the application of the proposed commodity tariffs by 14 July 2022, although its publication will most likely happen earlier, given the urgency.

Read more on the report.

Access all ACER reports on national tariff consultation documents.

ACER publishes today its second report on the implementation of the European Union Network Code on Harmonised Transmission Tariff Structures for Gas (NC TAR) for the Danish transmission system.

ACER concludes that the Danish transmission system operator (TSO), Energinet, does not sufficiently demonstrate the compliance of the proposed reference price methodology (RPM) with the requirements of the NC TAR.

What are ACER’s recommendations?

ACER recommends the national regulatory authority (NRA) to further assess the compliance of the proposed RPM with the NC TAR requirements on cost-reflectivity and cross-subsidisation.

The NRA should additionally provide further transparency on a proposed non-transmission emergency supply service and should revise the compliance of the proposed discount to capacity contracted on long-term basis.

ACER also provides additional guidelines on the on-going discussion to merge an upstream pipeline with the Danish transmission network.

In particular, the Report refers to the revenue regulation applicable to transmission assets and to the NC TAR requirements to allocate these costs to the transmission network’s users. 

The Danish NRA shall take a motivated decision on the RPM by 14 May 2022.

Access the report and find out more on the other national tariff consultation documents.