2. Background and Process
Legal requirements on transmission tariffs
De-coupled entry-exit systems
No distinction between domestic transport and transit
Qualitative requirements (Commission Staff Working Document)
KEMA Study 2009
Evaluation of existing differences in the methodologies for gas transmission network tariffs in Europe - Identification of barriers to cross-border trade
17th Madrid Forum invited ERGEG to start preparatory work on the framework guideline on tariffs
Preparatory work and analysis of national charging systems by ERGEG since November 2010
5 bilateral meetings with ENTSOG
Scoping discussion with the EC
19th Madrid Forum: EC announced that work could be pursued in the context of Commission Guidelines

3. Main legal requirements
Article 41, Gas Directive (2009/73/EC)
The NRA shall ensure that TSOs are granted appropriate incentive, over both the short and long term, to increase efficiencies, foster market integration and security of supply and support the related research activities.
Article 13, Gas Regulation (EC) 715/2009: Transmission tariffs or methodologies
Shall facilitate efficient gas trade and competition, while at the same time avoiding cross-subsidies between network users and providing incentives for investment
Reflect the actual costs incurred
Tariffs may also be determined through market-based arrangements, such as auctions, provided that such arrangements and the revenues arising from them are approved by the NRA.

4. Identification of problems
Tariffs can act as barriers to efficient gas trade and competition
Premium on short-term capacity products allocated with a short lead time may frustrate arbitrage flows and price convergence
Need to assess the relation between prices for short term and long term capacity products and the risks associated to optimization strategies by shippers
Pricing of interruptible and non-physical backhaul capacity
Need to find a proper balance between facilitating short term gas trading and providing long term signals for covering costs and promoting efficient investments
Cross subsidies between cross-border and domestic network usage
Cross subsidies within a market and
Cross subsidies between two adjacent markets
 Cost-reflectivity as a background principle

5. Identification of objectives
Objective 1: Harmonized transmission tariff structures shall facilitate efficient gas trade and competition
Objective 2: Harmonized transmission tariff structures shall avoid undue discrimination between cross-border and domestic network usage
Objective 3: Harmonized transmission tariff structures shall guarantee recovery of allowed revenues associated to cross-border interconnection points
Objective 4: Harmonized transmission tariff structures shall provide incentives for new and efficient investments  relation with the Energy Infrastructure Package
 Work on the Gas Target Model, FG CAM and Balancing to be taken into account in the Tariff FG development process.

6. Cross-border interconnection points
Proposed scope
Cross-border interconnection points
IPs between two or more Member States as well as IPs between adjacent entry-exit-systems within the same Member State
IPs to LNG and storage facilities may be included, if relevant for market integration and the contribution to non-discrimination, effective competition and the efficient functioning of the market
Contribute to recovering the allowed revenues (associated to interconnection points)
However, detailed rules for the determination of costs (or allowed revenues) are not within the scope

7. Discussions on the Initial Impact Assessment
Define a cost allocation methodology
Avoid undue discrimination between cross-border and domestic network usage
Mitigate the risk of pancaking
Recovery of allowed revenues
Deal with over-recovery and under-recovery of allowed revenues
Setting of reserve prices
For short term products  effects on TSOs ability to recover allowed revenues
For interruptible and backhaul capacity
Split of auction revenues between TSOs for bundled capacity products

8. Thank You!