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TAR NC Implementation Document – Second Edition September 2017
Ex-post approach – how to calculate discounts
If the NRA decides to apply an ex-post discount, it must be equal to three times the
reserve price for daily standard firm capacity products, irrespective of which capacity
product is contracted and actually interrupted. Article 16(4) does not prevent the
NRAs from taking account of the capacity that was actually interrupted and
determining a cap on the reimbursement amount. ENTSOG received feedback from
stakeholders and through ACER that that there should be no cap on the
reimbursement amount and that the formula for calculating the within-day
compensation should be removed from the TAR IDoc as there is no basis for it in the
TAR NC. ENTSOG disagrees on the following grounds. A limitless reimbursement of
three times the reserve price for daily standard capacity products might have a
considerable detrimental effect on the cost recovery of the TSO as well as cross
subsidisation among network users. The amount reimbursed can be attributed to
the TSO (reducing the allowed revenue) or to the regulatory account. In both cases
the NRA will have a strong rationale to put a cap on the amount to be reimbursed
either to safeguard the efficient and safe operation of the system by the TSO or to
limit an increase in tariffs. This possibility is in line with the scope of the TAR NC,
which should not impact on the way the allowed revenue of the TSO is determined
by the NRA.
Article 16(4) refers to the ‘actual interruption occurred’ thus the capacity and
duration of the interruption should be taken into account. A reimbursement for
capacity which has not actually been interrupted is in contrast with the principle of
cost-reflectivity. For example, in an extreme case the TSO would have to compensate
a network user three times a whole day, even if the actual interruption was only one
hour, and the network user can continue to use the capacity for the remainder of the
day.
Based on ENTSOG assumptions, two formulas (the first one applicable for daily
interruptions and the second one applicable for the within-day interruptions) have
been developed for calculating the ex-post compensation taking account of the
amount of interrupted capacity and duration of the interruption. Please see Annex N
for the formulas and examples.
Please see Annex N for an example of how to calculate ex-post compensation.