1. Regulation and Gas Market Opening in Slovakia
Ján Klepáč, Vice-Chairman of the Regulatory Council and Regulatory Office for Network Industries ÚRSO Bajkalská 27, Bratislava tel.:
Regulation and Gas Market Opening in Slovakia
Úrad pre reguláciu sieťových odvetví

2. SHORT HISTORY OF THE SLOVAK REGULATION IN GAS INDUSTRY
Enactment of the Act No. 276/2001 Coll. of the National Council of the Slovak Republic, June 14, 2001
Network industries: electro-energy, gas industry, heating, water industry
Establishment of ÚRSO, August 1, 2001
Appointment of the Regulatory Council members, October 16, 2001
Conclusion of Chapter 14 – “Energy” – within the framework of access negotiations with the EU
Implementation of Directives 96/92 and 98/30 of the European Parliament and of the Council to Slovak legislation
4 basic regulatory decisions for the gas industry issued by ÚRSO from December 2001 to December 2002
SPP privatisation, March 14, 2002
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3. Regulatory Decision for Gas Industry
Decision 523/01 Coll. concerning the method of maximum price calculation for delivery of natural gas to customers, December 2001
Amended by Decision 650/02 Coll., November 2002
Regulatory method incentive regulation based on profitability limitation
Regulatory formula Mt = CPt + Pt - Kt
Gas market opening from 1/1/2003 eligible customer consumption volume >= 15 mil. cubic meters of NG/year
Decision 746/02 Coll. on extent of regulation for small regulated subjects < 100 mil. cubic meters of NG/year
Úrad pre reguláciu sieťových odvetví

4. Úrad pre reguláciu sieťových odvetví
Separate Decision 0088/2002/03 Concerning the Maximum Price and Tariff Setting for Gas Transmission in Relation to Eligible Customers, issued by ÚRSO for SPP, a.s., December 2002
Calculation for the category Wholesale customers: P = F + H + V
P … price for transmission (SKK)
F … fixed cubic rate for capacity booking (0.67 SKK/cubic meter) x booked capacity per month (cubic meters)
H … annual performance rate ( SKK/(cubic meter/hour)) x maximum booked hourly capacity (cubic meter)
V … variable rate for transmitted capacity in the category Wholesale customers (1.32 SKK/cubic meter)
Note: The principle known as the “post stamp principle” is applied in the whole territory of the Slovak Republic. In the years , there are 45 eligible customers in the Slovak Republic.
Úrad pre reguláciu sieťových odvetví

5. Application of Regulatory Decisions in Gas Industry
Regulated subject SPP, a.s., with 97% share in the market + 50 small gas suppliers
Average maximum price increasing by 32.7% from 1/1/2003 and by 5.2% from 1/1/2004
Eliminated cross subsidies in relation to all customer categories
ÚRSO may only influence by regulation 37.86% of maximum price; the rest makes the purchase price of the natural gas.
Úrad pre reguláciu sieťových odvetví

6. Chart 1 Comparison of average selling gas prices by tariff groups
Úrad pre reguláciu sieťových odvetví

7. Úrad pre reguláciu sieťových odvetví
Chart 2 Illustration of quantity of gas consumption in unit selling price
Úrad pre reguláciu sieťových odvetví

8. GAS MARKET OPENING ISSUES AND POSSIBLE SOLUTIONS
Single monopoly source of natural gas and low own production
HUB Baumgarten gas line Nabucco
Existence of long-term contracts for gas supply
Apparently shall continue
Validity of so-called “Destination Clause” required by Gazprom
Energy dialogue EU – Russian Federation
Existence of single vertically integrated company SPP, a.s.
Accounts and managing unbundling later legal unbundling
Missing legislation
Harmonization of Slovak energy legislation with the EU Directives
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9. GAS INDUSTRY CHAIN IN SLOVAKIA – CURRENT STATE
Underground storage Nafta a.s. Gbely, Pozagas a.s. Malacky
Transmission SPP a.s.
Import SPP a.s.
Exploitation and production Nafta a.s. Gbely
Distribution SPP a.s.
Sale SPP a.s.
Customer
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10. BASIC CHART OF THE SLOVAK ENERGY LEGISLATION
Act on Heating
Act on Regulation
Act on Energy
Ministry of Economy
RONI
Gas Market Rules
Operation Rules of Gas Networks
Gas
Trans.
Rules
Techn.
Inter.
Rules
TSO
Order
DSO
Order
SSO
Order
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11. Úrad pre reguláciu sieťových odvetví
NEW LEGISLATION APPLICATION IN THE GAS TRANSMISSION AREA
PRICE SETTING
GAS MARKET RULES
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12. PRICE SETTING - CURRENT STATE
Maximum price for natural gas supply to the customers calculated on the basis of the ÚRSO Decree No. 523/01 Coll. consists of the
commodity price
gas transmission price
gas distribution price
underground gas storage price
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13. TRANSMISSION NETWORK ACCESS TARIFFS
In the transmission contract, there are ensured the following services:
ordered transmission capacity
ancillary services
gas for operating needs
other services
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14. Úrad pre reguláciu sieťových odvetví
Gas Market Rules
Primary linepack reserved for DSO´s physical balancing
Negotiated access to gas storage facilities
Virtual and real access to storage facilities
Single TSO
Single DSO
Entry – exit system in gas transmission
Post – stamp principle in gas distribution
Slovak Republic as a single balancing zone
Daily balancing regime
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15. Úrad pre reguláciu sieťových odvetví
Úrad pre reguláciu sieťových odvetví

16. Úrad pre reguláciu sieťových odvetví
Úrad pre reguláciu sieťových odvetví

17. Regulation and Gas Market Opening in Slovakia
Ján Klepáč, Vice-Chairman of the Regulatory Council and Regulatory Office for Network Industries ÚRSO Bajkalská 27, Bratislava tel.:
Regulation and Gas Market Opening in Slovakia
Úrad pre reguláciu sieťových odvetví