ENTSOG Tariff NC - Implementation Document 2nd Edition

Ex-post approach – how to calculate discounts If the NRA decides to apply an ex-post discount, it must be equal to three times the reserve price for daily standard firm capacity products, irrespective of which capacity product is contracted and actually interrupted. Article 16(4) does not prevent the NRAs from taking account of the capacity that was actually interrupted and determining a cap on the reimbursement amount. ENTSOG received feedback from stakeholders and through ACER that that there should be no cap on the reimbursement amount and that the formula for calculating the within-day compensation should be removed from the TAR IDoc as there is no basis for it in the TAR NC. ENTSOG disagrees on the following grounds. A limitless reimbursement of three times the reserve price for daily standard capacity products might have a considerable detrimental effect on the cost recovery of the TSO as well as cross subsidisation among network users. The amount reimbursed can be attributed to the TSO (reducing the allowed revenue) or to the regulatory account. In both cases the NRA will have a strong rationale to put a cap on the amount to be reimbursed either to safeguard the efficient and safe operation of the system by the TSO or to limit an increase in tariffs. This possibility is in line with the scope of the TAR NC, which should not impact on the way the allowed revenue of the TSO is determined by the NRA. Article 16(4) refers to the ‘actual interruption occurred’ thus the capacity and duration of the interruption should be taken into account. A reimbursement for capacity which has not actually been interrupted is in contrast with the principle of cost-reflectivity. For example, in an extreme case the TSO would have to compensate a network user three times a whole day, even if the actual interruption was only one hour, and the network user can continue to use the capacity for the remainder of the day. Based on ENTSOG assumptions, two formulas (the first one applicable for daily interruptions and the second one applicable for the within-day interruptions) have been developed for calculating the ex-post compensation taking account of the amount of interrupted capacity and duration of the interruption. Please see Annex N for the formulas and examples. Please see Annex N for an example of how to calculate ex-post compensation.

88 |

TAR NC Implementation Document – Second Edition September 2017