The Energy Community Secretariat undertook a review of the amendments to the gas transmission tariff methodology published for consultation by the national energy regulatory authority of Ukraine, NEURC. The Secretariat broadly welcomes the proposal as another step towards increasing transparency of tariff setting, whilst reinforcing non-discrimination among system users. The great majority of proposed changes relate to tariff design and, more specifically, the number of entry and exit points and mechanisms for allocation of allowed revenue to these points.
Having in mind the diversified transportation routes that can bring natural gas to Europe and the central role of Ukraine in this context, the Energy Community Secretariat advises NEURC to consider implementation of benchmarking methods in the process of tariff determination, at the same time keeping transparency, non-discrimination and cost-reflectivity as the main principles of tariff setting.
At the same time, the Energy Community Secretariat underlines the need to respect the role of NEURC as an independent regulatory body in charge of designing the transmission tariff methodology. The Secretariat welcomes the interest of Ukraine’s stakeholders in the tariff methodology reform process as a necessary and inseparable contribution to reflecting market conditions. The discussion thereto should be streamlined to enable the most effective solution, which has the highest social welfare and is compliant with the gas acquis. Still, it has to be clear that the final decision-making power remains with NEURC and is not to be influenced by regulated companies.