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TAR NC Implementation Document – Second Edition September 2017
RECONCILIATION OF REGULATORY ACCOUNT
Responsibility: subject to NRA decision
Reconciliation via a reference price methodology
As explained above, the TSO must determine annually for the last completed tariff
period the difference between the allowed transmission services revenue and the
transmission services revenue actually collected by the TSO. The TSO must log all
of the positive or negative deviation onto the regulatory account, or just a portion in
the presence of incentive schemes or a decision by the NRA to use the auction
premium to reduce physical congestion.
After logging some/all of the under-/over-recovery onto the regulatory account, the
reconciliation entails an adjustment to the future allowed revenue. The ‘adjusted’
transmission services revenue then becomes an input to the applied RPM affecting
the level of transmission tariffs applicable for future tariff periods. An under-recov-
ery raises transmission tariffs while an over-recovery reduces them subject to the
principle of avoiding
‘significant differences between transmission tariffs in consec-
utive tariff periods’
.
The word ‘future’ above is general, since the reconciliation takes place over ‘revenue
reconciliation period’ which may not necessarily coincide with a given tariff or regu-
latory period. The NRA must decide upon the appropriate reconciliation period. An
under-recovery in tariff period 1 does not necessarily imply an increase to the tariff
immediately or solely for tariff period 2, as the NRA’s selected reconciliation period
may be longer than a tariff period, spreading the under-recovery over several tariff
periods.
ARTICLE 20