GTS’s reaction to final method decision and x-factor decision by ACM
National gas network operator Gasunie Transport Services (GTS) has taken note of the final method decision and x-factor decision published today by the Dutch Authority for Consumers & Markets (ACM). In the method decision, the regulator determines the regulatory framework for the national gas transport network in the Netherlands for the years 2014-2016. The x-factor decision determines the annual productivity growth factor (to promote efficient operations) that GTS must apply to its tariffs. .
In its initial reaction, GTS feels that it is good that the design and structure of the method decision is consistent with earlier decisions and with the draft decision. This is beneficial to the predictability and stability of the regulatory framework. By introducing a system of revenue capping, the method decision will also present a robust framework towards rapidly changing European rules concerning the provision of services by national network operators.
Furthermore, GTS is disappointed that the regulator ACM has not recognised contributions from GTS with regard to a number of choices in the draft decision. The most striking example of this is the WACC (Weighted Average Cost of Capital). The way in which the WACC has been calculated does not recognise all capital costs comprehensively. GTS considers a properly determined return on cost of capital to be essential for safeguarding the quality of the provision of services also in the longer-term.
GTS is currently studying the final method decision and x-factor decision. GTS will shortly submit its tariffs for 2014 on the basis of these decisions.