ENTSOG Tariff NC - Implementation Document 2nd Edition

Miscellaneous

METHODOLOGIES AND PARAMETERS USED TO DETERMINE THE ALLOWED/TARGET REVENUE

ARTICLE 34

Responsibility: NRA’s submits information to ACER; ACER produces report

The allowed/target revenue is a basic element of tariff design. ACER must produce a report on methodologies and parameters to determine the allowed/target revenue, for publication within two years after the TAR NC enters into force. The TAR NC obligates the NRAs to submit to ACER the information on methodologies and param- eters to determine TSOs’ allowed/target revenues. ACER must set in advance the process for gathering such information. The minimum content of such a report is the information set out in Article 30(1)(b)(iii) of the TAR NC, which includes: (1) types of assets included in the regulated asset base and their aggregated value; (2) cost of capital and its calculation methodology; (3) capital expenditures, including methodologies to determine the initial value of the assets, methodologies to re-evaluate assets, explanations of the evolution of the value of the assets and depreciation periods and amounts per asset type; (4) operational expenditures; (5) incentive mechanisms and efficiency targets; and (6) inflation indices.

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