ENTSOG Tariff NC - Implementation Document 2nd Edition

FLOATING PAYABLE PRICE A TSO is regulated under the price cap regime. The tariff period matches the gas year. Only floating payable price is applied. In June (30 days before the July auction), the TSO publishes binding tariffs for the yearly standard capacity products for the upcoming gas year from October Y to September Y+1. In the July auction for gas year 1, Network User 3 buys yearly standard capacity product over 10 consecutive years, starting from gas year 1. The payable price for capacity in gas year 1 is the reserve price for yearly standard capacity product published in the price decision valid in gas year 1. For capacity in gas year 2, the payable price is the reserve price for yearly standard capacity product published in the price decision valid in gas year 2 and so on. Further, the auction premium, if any, is added on top. (Please see table 61, Network User 3) In the July auction for gas year 2, Network User 4 buys yearly standard capacity product over 9 consecutive years, starting from gas year 2. The payable price for capacity in gas year 2 is the reserve price for yearly standard capacity product published in the price decision valid in gas year 2. For capacity in gas year 3, the payable price is the reserve price for yearly standard capacity product published in the price decision valid in gas year 3 and so on. Further, the auction premium, if any, is added on top. (Please see table 62, Network User 4) The floating payable price in each year is calculated according to the formula set in Article 24 (a) of TAR NC.

P flo

= P r,flo

+ AP

Where: P flo

is the floating payable price;

P r,flo

is the reserve price for a standard capacity product applicable at the time when this product may be used;

AP

is the auction premium, if any.

In tables 61 and 62, P cl is the clearing price. Conclusion: under the floating payable price approach, where capacity is bought for a gas year beyond the next, the reserve price will only be known before the yearly capacity auction that takes place prior to the respective gas year. The clearing price for future gas years only reflects an indicative reserve price. As can be seen from the tables below, the floating payable price for both Network User 3 and 4 will be the same for corresponding years, even though Network User 2 bought its standard capacity a year later.

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TAR NC Implementation Document – Second Edition September 2017