ENTSOG Tariff NC - Implementation Document 2nd Edition

ARTICLE 7 CHOICE OF A REFERENCE PRICE METHODOLOGY

Responsibility: subject to consultation per Article 26(1) by TSO/NRA, as NRA decides; subject to decision by NRA; ACER analysis of the consultation docu- ment for Article 7

Enable reproductivity of tariff calculation and prevision of future tariffs

Ensure reference prices do not distort cross-border trade

Take account of actual costs of using the transmission network

Ensure significant volume risk is not shifted from

Ensure non-discrimination and prevent undue cross-subsidisation (incl. regarding c/a/a)

cross-system to intra-system use

Figure 15: Principles for the choice of a RPM

TSOs/NRAs have to ensure compliance with five principles when evaluating a cer- tain RPM: \\ Reproducibility: network users should know the methodology to derive tariffs, should be able to reproduce the tariff calculations and should have the ability to forecast tariff developments over time. \\ Cost-reflectivity: tariffs should reflect the costs incurred by the TSO. \\ Non-discrimination: means that to the extent possible, TSOs/NRAs, depend- ing on the entity conducting the final consultation per Article 26(1), should avoid cross-subsidies where some network users pay for others. The assess- ments set out for the CAA test the satisfaction of this principle. ENTSOG received stakeholder feedback highlighting that, whilst the CAA tests the satis- faction of the cost-reflectivity principle, this is not an exclusive test of whether the RPM ‘ensures non-discrimination’. CAA checks the non-discrimination only between the two predefined groups of network users, and there could be other means to check non-discrimination between other groups of network users. ENTSOG agrees with this clarification. \\ Volume risk management: one group such as intra-system network users should not face tariff hikes to compensate for the diminishing use of the network by another group such as cross-system network users. In Czech Republic, the ‘asset allocation methodology’ is applied to hedge against such volume risk: this RPM is based on the distribution of assets between two groups of assets, one operated by a price cap regime to supply cross-system use, the other operated by a non-price cap regime to supply intra-system use. This approach notably ensures that intra-system use does not have to make up for insufficient volumes flowed for cross-system use. \\ Non-distortion of cross-border trade through reference prices implies that reference prices derived in accordance with RPM should ensure non-distorted economic signals for cross-border trade.

60 |

TAR NC Implementation Document – Second Edition September 2017