ENTSOG Tariff NC - Implementation Document 2nd Edition

Payable Price

ARTICLE 24

PAYABLE PRICE: TWO APPROACHES

Responsibility: fixed payable price approach for existing capacity under a price cap regime is subject to consultation per Article 26(1) by TSO/NRA, as NRA decides; subject to decision by NRA The difference between the fixed and the floating payable price approaches is the degree of ‘knowledge’ with respect to the payable price when contracting the capacity: \\ Under the floating payable price approach, where capacity is bought for a gas year beyond the next, the reserve price is not known. The reserve price will only be known before the annual yearly auction that takes place prior to the respective gas year. Therefore, the clearing price for future gas years will only reflect an indicative reserve price. The actual payable price will only be known upon the publication of the reserve price prior to the gas year. \\ Under the fixed payable price approach, the basis and the evolution of the price is known prior to the annual yearly capacity auctions. That is, the reserve price is known, as is the type of index, even if the actual index value remains uncertain. Similarly, the risk premium is known. For both floating and fixed payable price, the auction premium may differ per contracted yearly capacity product but is set and known for each contracted yearly product at the time of the original auction.

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TAR NC Implementation Document – Second Edition September 2017