ACM allows for more variation in tariffs per customer for gas transmission services by GTS

From 2014, the tariffs of Dutch transmission system operator for natural gas Gasunie Transport Services (GTS) will be structured differently. As a result, the changes to the tariffs may vary widely for each of GTS’ customers, but, in most cases, tariffs will increase. This is the conclusion of the tariff decision that the Netherlands Authority for Consumers and Markets (ACM) published today.  Consumers and businesses are not charged the transmission costs of GTS directly, but ACM expects that the effects of the new tariffs will be passed on to them through the tariffs of the gas suppliers.

Settlement-based discount scheme expires

Between 2006 and 2011, GTS’ revenues were too high. GTS thus had to settle those surplus revenues with discounts in 2012 en 2013. The 2012 and 2013 tariffs were therefore lower than normal. This discount scheme will expire in 2014. That is one of the main reasons behind the tariff increases in 2014. Another reason is expansion investments, which are to ensure that gas transmission in the future will continue to be secure and safe.

Amendment also affects tariff structure

The tariffs of GTS change because of, in particular, an amendment to the law, and a discount scheme. As a result of said amendment, GTS will have a new duty starting in 2014: the management of existing connections. The costs thereof used to be a component of the transmission tariffs. From now on, only customers that actually use this service will be paying for them. In addition, a discount rate of 25 percent will apply to the tariff for transmission to and from gas storage facilities. This discount is settled with other customers, which means that their tariffs for the transmission service will increase.

From two to five items

Until now, GTS has used two tariffs: one tariff for transmission and balancing duties, and another tariff for quality conversion. Irrespective of actual usage, all customers are charged these items. From 2014, the tariff structure will  be based on five items: transmission duties, balancing duties, quality conversion, costs for the existing connection, and costs for new connection points. The tariffs are therefore more customized than before, meaning that customers only pay for what they actually use.

No unnecessarily high tariffs

Since ACM sets the gas transmission tariffs every year, it is not possible for GTS to charge unnecessarily high tariffs. The tariff decisions for the transmission system operator for electricity TenneT and the regional network operators, as well as the tariff decisions for GTS naturally follow from the method decisions, which ACM set in October 2013 for the regulatory period of 2014-2016.

Objections and appeals

GTS and other interested parties have the opportunity to file objections and appeals against these tariff decisions. If objections were to be filed against these tariff decisions, the new tariffs would nevertheless come into effect on January 1, 2014. If an objection were to be allowed, any underpayments or overpayments would be settled with future tariffs.