NMa Designates GTS As Alternative Supplier of Gas Services

The Netherlands Competition Authority (NMa) has decided to designate the national manager of the gas transmission network (GTS) as the alternative supplier of gas flexibility services as of 1 January 2006. NMa has decided to do so because the largest supplier of flexibility services on this market at present, Gasunie Trade & Supply, has a dominant position. This means that customers are dependent to a considerable extent on Gasunie Trade & Supply for the supply of this essential service.

Gert Zijl, a member of the Board of Directors of NMa: 'As a result, distributors and large buyers of gas will soon have more choice with regard to the procurement of the flexibility services they require. By introducing measures of this sort, NMa aims to promote the operation of market forces because there is still insufficient competition on the gas market," Zijl emphasises. The Office of Energy Regulation (DTe), a part of NMa) will monitor price formation to ensure that the tariffs charged for these services are fair.

Flexibility services are essential to the operation of the gas market because they enable suppliers and large buyers to absorb predictable and unpredictable fluctuations in gas offtake, for instance when sharp differences in temperatures occur. GTS is an independent party with the knowledge and expertise necessary to offer a good alternative on this market. In addition, as a result of this decision, buyers may procure flexibility services separately from their procurement of gas.

At the end of 2004, NMa started an investigation into the position of Gasunie Trade & Supply on the market for flexibility services. Following this investigation and the responses of market parties, in taking its decision NMa saw sufficient cause to conclude that Gasunie Trade & Supply had a dominant position on the market for flexibility services for low-calorific gas (L-gas used by households) and in a number of market segments for high-calorific gas (H-gas used in industry). By law GTS is required to offer flexibility services if Gasunie Trade & Supply has a dominant position. With regard to this task of GTS, NMa has approved the method of regulation which will apply in the period from 2006 up to and including 2008.