ENTSOG Tariff NC - Implementation Document 2nd Edition

ARTICLE 12(3)

BINDING RESERVE PRICES

Responsibility: update of the reserve prices within the tariff period is subject to NRA decision

Default date for annual yearly capacity auctions As of 2018, the Amended CAM NC sets the default date of the annual yearly capacity auction as the first Monday of July, and not the first Monday of March  1) . Rescheduling from March to July should provide more time to gather the accurate information needed for calculations required for publication. ENTSOG believes that the timing of 30 days before the annual yearly auctions strikes an appropriate balance between: \\ Allowing network users enough time to plan their booking strategies; \\ Providing enough time to enable tariff calculations that are as accurate as possible, and that can consider forecast contracted capacity in conjunction with estimates of under-/over-recovery from previous years. Detrimental effect on revenue and cash flow The TAR NC requires tariff calculations to set binding tariffs for IPs, and for non-IPs where the CAM NC applies, prior to the annual yearly capacity auctions. Compared to the current scenarios, transmission tariffs for IPs will be calculated a few months in advance. Accelerating the calculation of tariffs will reduce their accuracy, exposing the TSO to greater uncertainty regarding revenue recovery. In the recitals, the TAR NC expresses the desire to minimise TSO exposure: ‘In order to promote stabil- ity of transmission tariffs for network users, to foster financial stability and to avoid detrimental effects on the revenue and cash flow positions of transmission system operators, principles for revenue reconciliation should be set out.’ The sentence covers TSOs functioning under all types of regulatory regimes, including price cap and non-price cap regimes. Binding reserve prices ‘for the subsequent gas year’ for floating payable price approach Under the floating payable price approach, the TAR NC foresees that the reserve prices published in June for the annual yearly capacity auctions in July must be binding for ‘the subsequent gas year’, meaning the gas year beginning in October of the same calendar year as when the auction takes place. Further to stakeholder feedback, ENTSOG notes that for the cases where the tariff period does not coincide with the gas year, this TAR NC rule may result in binding reserve prices further than the end of this gas year, i. e. until the end of the second tariff period starting within such a gas year.

 1) See Article 11(4) of the Amended CAM NC.

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TAR NC Implementation Document – Second Edition September 2017