ENTSOG Tariff NC - Implementation Document 2nd Edition

Rescaling The primary use of rescaling is to ensure the recovery of allowed revenue while respecting the entry-exit split. Rescaling can entail multiplying reference prices by a certain value, or adding/sub- tracting a certain value. The choice depends on the RPM used. \\ Multiplication can calibrate desired locational signals up or down, maintaining their percentage differences, while permitting an adjustment of expected revenue to match the allowed transmission services revenue. \\ Addition ensures the recovery of allowed revenue and can avoid zero or nega- tive reference prices. A simple example illustrates the differences between the two approaches and their relative merits. Assume that reference prices post RPM are €1, 2 and 3 for IP1, IP2 and IP3 respectively, but that they would only recover €50 while the TSO’s allowed revenue are €100: \\ Multiply all reference prices by 2, to produce reference prices of 2, 4 and 6. Advantage: the relative percentage differences between the reference prices remain the same. Drawback: cannot address the issue of negative or zero reference prices. \\ Add the same amount of 2 EUR to each IP, producing reference prices of 3, 4 and 5 EUR. Drawback: the new set changes the percentage difference in refer- ence prices. IP3’s reference price exceed IP2’s by 50% prior to addition, as 3 is 50% more than 2. After addition, IP3’s reference price costs only 25% more: 5 compared to 4. Advantage: can address the issue of negative or zero refer- ence prices after the application of RPM. If we modify the IP1 tariff in this example to –1 prior to addition, then the +2 EUR adjustment would bring it to +1 EUR. Rescaling and discounts at points with storage facilities Article 9 sets out the cases for application of discounts at: (1) entry-points- from/exit-points to storage facilities; (2) at entry-points-from LNG facilities; and (3) entry-points-from/exit-points to infrastructure developed with the purpose of ending isolation of MSs in respect of their gas transmission systems. ENTSOG received stakeholder feedback that storage discounts must not be affected by the application of rescaling adjustment to RPM. ENTSOG also received feedback through ACER that according to Article 6(4)(c), the rescaling adjustment to RPM must be applied to ‘all entry points’, or ‘all exit points’, or both, and thus, the entry-points-from/exit-points to storage facilities must not be excluded from the application of such adjustments. ENTSOG agrees with feedback received through ACER and recognises that, where applied, the rescaling adjustment to RPM must concern all entry points on the system, or all exit points on the system, or both. Such an adjustment will result in exactly the same discount at entry-points-from/exit-points to storage facilities as before the application of this adjustment. In any case, ENTSOG highlights that Article 9 outlines that it is the capacity-based transmission tariffs that are subject to storage discounts and not the reference prices  1) .

 1) See also Annex D for the process of CWD application where the storage discounts are also taken into account.

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