ENTSOG Tariff NC - Implementation Document 2nd Edition

Revenue Reconciliation

REGULATORY ACCOUNT

ARTICLE 19(1), (2), (4)

Responsibility: the attribution of under-/over-recovery to the regulatory account is subject to NRA decision

Characteristics of the regulatory account A regulatory account records the difference between the TSO’s allowed revenues and the revenues actually obtained during the same time period. The regulatory account will be reconciled by forwarding the resulting balance to the transmission services revenue being part of the allowed revenue for the next relevant time period. The concept of ‘revenue reconciliation period’ is explained below. The TAR NC requires each TSO functioning under a non-price cap regime to have one regulatory account recording the information on under-/over-recovery. The NRA can decide to require aggregated information, or information differentiated by source/aim showing the gap for each item. Other information in the regulatory account As described above, the regulatory account reports the difference between the allowed and the actual revenues. In addition the NRA can require the regulatory account to also include ‘other information’ as set out in Article 19(1), as the param- eters set at the beginning of the regulatory period may be subject to change. Depending on the applicable regulatory regime, examples are: \\ Parameters entering into the definition of the weighted average cost of capital (WACC): risk free rate and/or debt/equity ratio (e. g. Austria, Belgium, Great Britain, Ireland, Lithuania, Romania); \\ Operational expenditures (OPEX): depending on the possible incentive mechanisms or efficiency targets in place, or not, the difference between the forecasted OPEX used for the tariff set-up and the actual OPEX can go fully or partially into the regulatory account (e. g. Belgium, Great Britain, Greece, Ireland, Lithuania, Romania); \\ Variable costs such as energy (e.g. Austria, Belgium, Bulgaria, theCzech Republic, France, Germany, Great Britain, Ireland, Lithuania, the Netherlands, Romania); \\ CO ² certificate costs (e. g. Austria, Belgium, Bulgaria, France, Germany, Great Britain, Ireland, Romania); \\ Inflation indices: differences between forecasted values and actual values (e. g. Belgium, Bulgaria, France, Great Britain, Ireland, Lithuania, Romania); \\ Capital expenditures (CAPEX): in case the budgeted value of the foreseen investments differ from the actual values (e.g. Austria, Belgium, Bulgaria, the Czech Republic, France, Germany, Great Britain, Greece, Ireland, Lithuania, Romania); \\ Depreciations: difference in depreciation amounts between forecasted and actual values (e. g. Austria, Belgium, Bulgaria, the Czech Republic, France, Great Britain, Greece, Ireland, Lithuania, Romania); \\ Interest rate: difference between forecasted and actual rates on the amount of the regulatory account (e. g. Belgium).

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