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TAR NC Implementation Document – Second Edition September 2017
Reference prices and capacity-based transmission tariffs
Applying the RPM results in reference prices for each entry and each exit point of
the system. As defined in the TAR NC, a reference price is effectively a price for a
firm capacity product with one year duration. It is intentionally not tied to the ‘yearly
standard capacity product’ in the CAM NC, so it applies not only to IPs but also to
non-IPs where the CAM NC does not apply.
Figure 7 explains how a given capacity-based transmission tariff derives from a
reference price. The ‘reference price’ does not constitute a capacity-based trans
mission tariff but is only a ‘reference’ for setting such tariffs. Figure 7 distinguishes
between the points where the CAM NC and the associated auctions apply, and the
points where they do not. The first category includes not only IPs but also non-IPs
where the NRA has decided to apply the CAM NC. All other points on the transmis-
sion network fall into the second category.
As for the first category, reserve prices are set on the basis of reference prices. The
CAM NC defines ‘reserve price’ as the eligible floor price in an auction. Reserve
prices are set on the basis of reference prices. Such reserve prices are the capaci-
ty-based transmission tariffs for standard capacity products established by Article 9
of the CAM NC: yearly, quarterly, monthly, daily and within-day. The CAM NC estab-
lishes specific start and end dates for the duration of such products. The TAR NC
sets out the way to set the reserve prices for such products:
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Yearly standard capacity products:
the reserve prices for firm products are
equal to the reference prices; the reserve prices for interruptible products
involve the application of a discount to the reserve prices for firm products.
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The other four standard capacity products:
the reserve prices for firm products
are equal to a given proportion of the reference price for a firm yearly product,
on top of which a multiplier applies, and potentially a seasonal factor; the
reserve prices for interruptible products involve the application of a discount to
the reserve prices for firm products.
As for the second category, the TAR NC is silent on the use of the derived reference
prices to calculate prices for capacity products. However, the tariff principles in the
Gas Regulation still apply.