DTe: New Tariffs for the Transmission of Electricity

The Office for Energy Regulation (DTe) has set maximum tariffs for electricity grid managers for the second half of 2003. The level of these tariffs is set on the basis of the price cap(the so-called x factor) determined in June 2003.

On the basis of the new x factor, the electricity grid managers charged buyers too much in the years 2001, 2002 and the first half of 2003. If a grid manager charges tariffs that are too high in previous years, this is compensated in the tariffs for the second half of 2003. DTe offers grid managers who have charged tariffs that are too low the possibility of obtaining compensation for these tariffs in the second half of 2003 and partially in 2004. This spreads the effect of the tariff increase for the end user.

The price cap is 3.2 percent per annum for all companies and applies to the period from 2001 up to and including 2003 (the first regulatory period). By means of this efficiency incentive, the regulator aims to ensure that the transmission companies, which by nature are monopolies in their areas, operate more efficiently and lower their tariffs every year. At the end of 2003, buyers will have saved an average of EUR 45 on the cost of electricity as a result of the price cap in the period from 2001 up to and including 2003.