the big picture in the eu managing conflicting objectives in tariff design tom maes, vice-chair ceer...
TRANSCRIPT
The big picture in the EUManaging conflicting objectives in tariff design
Tom Maes, Vice-Chair CEER Gas Working Group
Understanding the impact of regulatory incentives4th Workshop of Eastern Partnership, Moldova, 26-27 March 2015
Presentation outline
Unbundling and regulation
Regulatory regimes
From revenues to tariffs
Objectives and incentives
3
Unbundling and regulation
Production / import Transport Supply
Gas producer /
Power generator
Transmission system
operator
Distribution system
operatorConsumer
Wholesale Retail
Competitive activities Monopolistic activities Competitive activities
4
Defining a regulatory regime
Cost-
plus
• Pass through of system operator’s costs (no incentive)• Fair return on investments (no excessive monopolistic return)
Revenu
e cap
• Only efficiently incurred costs shall be covered (RPI-X)• No volume risk
Price
cap
• System operator is exposed to demand fluctuations• Need for assumptions on the cost drivers per unit sold
RIIO
• Revenue using Incentives to deliver Innovation and Outputs• Quality control needed to assess primary and secondary deliverables
Setting the (allowed) revenues...
REGULATORY ASSET BASE (RAB)
RATE OF RETURNX
= RETURN ON RAB
+
DEPRECIATION
+OPERATING COSTS
(OPEX)
+
OTHER COSTS
ALLOWED REVENUES
Transporting gas has a cost which has to be recovered by regulated tariffs► Only efficiently incurred costs shall be covered
6
Allowed Revenue
Transmission Services Revenue
Cost Allocation
Methodology
Secondary adjustments
Non-standard products
(multipliers)
Publication
Revenue Reconciliation
… to fixing the tariffs
System users shall pay their share of the costs
► Transparency
► Non-discrimination
► Avoidance of cross-subsidies
► Cost reflectivity
7
Balanced incentives
Cost efficiency
Quality
Investments
8
• Publication requirements• Consultation requirements• Minimum notice period for tariff publication
Transparency
• Capacity based pricing• Default rule on entry-exit split• Limited range of multipliers / seasonal factors• Harmonised pricing of non-firm products
Efficient trade & competition
• Harmonised approach to cost allocation – one of 4 methodologies determined by circumstances, counterfactual and cost-allocation test
• Harmonised approach to rescaling, equalisation and benchmarking
Avoidance of cross-subsidies & discrimination
• Harmonised revenue reconciliation• Economic test for incremental/new capacity• Payable price – predictability for all users
Framework for efficient investment
0€
Future EU network code on harmonised gas transmission tariff structures
9
Thanks for your attention!
Thank you for your attention!
10
Tom Maes
+ 32 22 89 76 57
www.energy-regulators.eu
Contact