NMa revises regulation gas transmission

The Netherlands Competition Authority (NMa) will revise the way in which it regulates tariffs set out for the national operator of the gas transmission network (GTS). This is prompted by today's ruling of the Trade and Industry Appeals Tribunal [College van Beroep voor het Bedrijfsleven/ CBb] on the so-called 'method decision' drawn up by the NMa for the period 2006-2009. This decision includes a price cap (x-factor) stipulating that GTS revenues must show an annual decrease of 4.2 per cent, to be effected by lowering tariffs for instance.

GTS holds a monopoly on gas transmission services in the Netherlands. The NMa fixes GTS tariffs according to a model of revenue regulation. GTS tariffs are thus based on historical costs and a reasonable return. The CBb today ruled that such a method of regulation is not in accordance with legislation.

Because of the GTS monopoly, the NMa – as authorised by the Gas Act – ascertains that end users are not overcharged for gas transmission services. Gert Zijl, Member of the Board with the NMa, comments: 'We will do our utmost to prevent this ruling from delaying procedures in determining the x-factor for 2007. We are dealing with a large sum of money here, for which Dutch consumers will be charged.'

In the weeks ahead, the NMa will further study the ruling and consider measures necessary to protect consumers from being overcharged on transmission costs in 2007 and beyond.