NMa: GTS Must Offer Flexibility Services

The Office of Energy Regulation (DTe), the part of the Netherlands Competition Authority (NMa) which regulates the energy market, today published a draft decision in which it concludes that Gasunie Trade & Supply has a dominant position on a large part of the market for flexibility services. In accordance with the Gas Act, in this case the national operator of the gas transmission network (GTS) must offer flexibility services.

The method decision explains how GTS will structure the supply of these services, so that the services are offered at fair prices and conditions and the operation of market forces is stimulated. Flexibility services enable supplies of gas to absorb predictable and unpredictable fluctuations in gas offtake, for instance when strong temperature differences occur.

At the end of 2004, NMa started an investigation into the position of Gasunie Trade & Supply on the market for flexibility services. This research was carried out by the research firm, Frontier Economics. In March 2005, this firm published a report, the most important conclusion of which was that Gasunie Trade & Supply had a dominant position on the market for flexibility services. On the basis of the report presented by Frontier Economics and the responses of market parties, NMa sees sufficient cause to conclude in this draft decision that Gasunie Trade & Supply has a dominant position on the market flexibility services for low-calorific gas (L-gas used by households) and in a number of market segments for high-calorific gas (H-gas for industry). The method of regulation will apply in the period 2006 up to and including 2008 to the services in which Gasunie Trade & Supply has a dominant position.

NMa asks market parties expressly to respond to this draft decision. NMa aims to ensure that this method will have a positive effect on competition as early as 2006. NMa therefore wishes to approve the final method decision as soon as possible after the response period closes on 26 October 2005. NMa requests interested parties to respond as soon as possible to the draft decision.

The draft decision is obtainable from NMa's and DTe's websites (www.acm.nl).