Baltic Electricity MiniFora

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Baltic Electricity Mini-Fora Transmission
tariffs, connection rules
Meeting in Riga, Latvia 3th July 2006
Klarika Siegel Chief expert Estonian Energy
Market Inspectorate
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• Network tariffs regulated by Electricity Market
  Act (EMA)
• According to the EMA EMI must approve the
  network tariffs

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• By EMA the EMI shall prepare and publish uniform
  methods for the calculation of justified network
  charges specified in clauses 71 (1) 3)-5) of EMA
  based on the weighted average capital cost

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Clauses 71 (1) 3)-5) of EMA

• network charges shall be transparent and in
  compliance with the principle of equal treatment.
• ensuring security of supply and efficiency shall
  be taken into account.
• the size of network charges shall enable network
  operators to perform the obligations arising from
  legislation and the conditions of the activity
  licence and to ensure justified profitability of
  the invested capital.

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• In TSO tariff regulation EMI uses RPI-X
  methodology
• Regulatory period is 3 years
• Now going the 2-nd year of regulation

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For regulatory period (3 y) we approve

• Depreciation (capital expenditure)
• Reasonable profit
• Variable costs (network losses )
• Fixed costs
• Uncontrollable

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Example
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• During the regulatory period will take a place
  only tariff correction by the formula
• Price year1 Correction coefficient x price year0
  

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Correction coefficient

•  Revenue year1
• variable costs uncontrollable costs fixed
  costs0 x (RPI- X) capital expenditure1
  reasonable profit1
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Approved tariffs for TSO
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• Connection principles are regulated by EMA
  through Grid Code

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Grid Code allow

• project based
• average cost based
• calculation of connection fees

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• Our TSO use 100 project based connection fees

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• Thank You !