Regulatory developments

Regulatory developments

The Netherlands

In its method decision for GTS, the Dutch regulatory authority, ACM, sets out the regulatory framework that determines the permitted revenues for GTS and the manner in which GTS is allowed to recoup its efficient costs during a certain regulatory period. These rules determine the level of our tariffs.

On 24 February ACM published the method decision and x-factor decision for GTS. The method decision sets out the regulatory framework that determines the permitted revenues for GTS in the period 2017–2021. The x-factor decision establishes the annual efficiency discount that GTS must apply to its tariffs. As a result of the method decision, GTS’s tariffs will be lowered. Over the next five years, the annual permitted revenues will gradually decrease by a total of € 200 million. The method decision has led to an impairment of the GTS network of € 450 million.

The method decision was established after a process in which ACM, GTS and various representative bodies of energy producers and large corporate energy consumers discussed their views and positions. This has led to an agreement between all parties on the main elements of the method decision. As a result, all parties concerned agreed to forego their right to appeal against these elements of the decision. As a result, for the coming five years, the agreement offers clarity for GTS customers with regard to the tariffs and for GTS with regard to its permitted revenues. Besides certainty, the agreement offers all parties concerned the necessary scope to focus on the challenges of tomorrow’s energy supply.

On the basis of the method decision, GTS will shortly develop a tariff proposal. The new tariffs are expected to come into effect on 1 July 2017. Until then, the tariffs of 2016 will continue to apply. The tariff proposal for 2017 will take into account the revenues GTS will receive in the first half of the year.

Germany

In June 2016, the German regulatory authority, BNetzA, published its decision on the cost allocation between network operators (Transmission System Operators or TSOs). This decision ensures that the entry tariffs of all TSOs operating within the same market area are the same, as a result of which bookings are expected to stabilise. The tariff system will become effective on 1 January 2018. However, three TSOs and one shipper have appealed against the decision at the Higher Regional Court (‘Oberlandesgericht’) in Düsseldorf, Germany.

In 2014, BNetzA assessed the effects of revenue regulation and recommended that the overall regulatory framework be kept stable. This led to a new incentive scheme, with a new system for the capital cost allowance for Distribution System Operators (DSOs). For the TSOs, the new scheme only leads to minor changes.

At the end of the second quarter of 2016, Gasunie Deutschland submitted a cost estimate for 2018–2022 to BNetzA with regard to its gas transport network. The next efficiency benchmark will be based on approved costs. The entire process for establishing the permitted revenues for the period 2018–2022 should be completed by the end of 2017.