ERGEG Paper on Tariff Principles: A Comment
23 January 2008
By Graham Shuttleworth
On 22 November 2007, the European Regulators' Group for Electricity and Gas (ERGEG) issued a public consultation paper on "Principles for Calculating Tariffs for Access to Gas Transmission Networks." In response, Gas Transport Services (GTS), the national network operator for gas transmission pipelines in the Netherlands, asked NERA Director Graham Shuttleworth to review and comment on the ERGEG paper. In his final report, Mr. Shuttleworth notes that the key problem with the ERGEG paper is that it lacks any credible and long-lasting statement of regulatory principles. Instead, it describes (imperfectly) a number of specific regulatory methods. Mr. Shuttleworth contends that although these methods may have been used to regulate gas transmission networks at particular times, and may be suitable in particular conditions, the methods the ERGEG paper describes are not so stable or robust that their use should become a binding commitment on national energy regulators. In Mr. Shuttleworth's report, he provides general regulatory principles that are applicable at all times and can therefore guide the choice of regulatory methods in the future.
