ENTSOG Tariff NC - Implementation Document 2nd Edition

ARTICLE 20

RECONCILIATION OF REGULATORY ACCOUNT

Responsibility: subject to NRA decision

Reconciliation via a reference price methodology As explained above, the TSO must determine annually for the last completed tariff period the difference between the allowed transmission services revenue and the transmission services revenue actually collected by the TSO. The TSO must log all of the positive or negative deviation onto the regulatory account, or just a portion in the presence of incentive schemes or a decision by the NRA to use the auction premium to reduce physical congestion. After logging some/all of the under-/over-recovery onto the regulatory account, the reconciliation entails an adjustment to the future allowed revenue. The ‘adjusted’ transmission services revenue then becomes an input to the applied RPM affecting the level of transmission tariffs applicable for future tariff periods. An under-recov- ery raises transmission tariffs while an over-recovery reduces them subject to the principle of avoiding ‘significant differences between transmission tariffs in consec- utive tariff periods’ . The word ‘future’ above is general, since the reconciliation takes place over ‘revenue reconciliation period’ which may not necessarily coincide with a given tariff or regu- latory period. The NRA must decide upon the appropriate reconciliation period. An under-recovery in tariff period 1 does not necessarily imply an increase to the tariff immediately or solely for tariff period 2, as the NRA’s selected reconciliation period may be longer than a tariff period, spreading the under-recovery over several tariff periods.

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TAR NC Implementation Document – Second Edition September 2017