ENTSOG Tariff NC - Implementation Document 2nd Edition

General Requirements

REFERENCE PRICE METHODOLOGY APPLICATION

ARTICLE 6

Responsibility: subject to consultation per Article 26(1) by TSO/NRA, as NRA decides; subject to decision by NRA

Figure 13 shows that the RPM does not apply to all the TSO’s allowed/target revenue but only to the portion related to the provision of transmission services, and only to those services involving capacity-based transmission tariffs. Chapter I explained that a ‘reference price’ derived through the RPM does not constitute a capacity-based transmission tariff but is only a ‘reference’ for setting such tariffs   1) . The TAR NC does not detail any possible RPM except for the CWD counterfactual. Apart from discounts at certain points, described further below in this Chapter  2) , Article 6 allows for three kinds of adjustments to the RPM: benchmarking, equalisa- tion and rescaling. \\ Benchmarking implies that the NRA adjusts the reference price at an entry or exit point so that the resulting values meet the competitive level of reference prices. \\ Under equalisation, the TSO or NRA to apply the RPM sets the same reference price at some or all points of a group sharing the same set of characteristics, such as LNG points. \\ Rescaling involves the adjustment of the reference price at some or all entry and/or exit points, through the application of a constant that can be multiplica- tive or positive/negative additive.

Transmission services revenue (only capacity)

Reference price methodology (RPM)

RPM + a combination of adjustments Ú RPM with adjustments \\ Article 9 discounts (storage, LNG and/or ‘isolation’) \\ Benchmarking \\ Equalisation \\ Rescaling

No adjustment Ú RPM as is

Figure 13: Possible components of a RPM

 1) See Chapter 1 ‘General Provisions’, Section ‘Article 3 – definitions’.  2) See Article 9 – discounts at entry-points-from/exit-points-to storage facilities and infrastructure ending the isolation, and at entry-points-from LNG facilities.

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TAR NC Implementation Document – Second Edition September 2017