Energy Community releases Policy Guidelines on distribution network tariffs

The Energy Community Secretariat issued Policy Guidelines on the distribution network tariffs with aim to provide guidance to regulatory authorities, but also the regulated industry, as regards to validated best practises in implementing the core principles in distribution tariff setting.

The Policy Guidelines underlines predictability, transparency, respecting the economic environment and regulation method as core principles of tariff regulation. The document also brings recommendations on Required revenues for network, Incentive regulation, Costs allocation and design of the network tariffs, and Distributed energy resources.

According to the Energy Community acquis communautaire, distribution network tariff setting is a key competence of national regulatory authorities. The Third Energy Package, integrated in the acquis by decision of the Energy Community Ministerial Council, additionally requires regulated tariffs or the methodologies for their calculation to ensure that system operators are granted appropriate short- and long-term incentives to increase efficiency, foster market integration as well as security of supply and support related research activities.

“The objective of the Guidelines is to improve the predictability of the legal and regulatory environment for network operators, ensuring fairness, consistency and coherence of the overall framework, providing incentives to increase efficiency and removing any reasonable concerns of distribution system operators (DSO),” the Secretariat noted.

As stated by the Secretariat, the Policy Guidelines were drafted on the basis of a study Technical Assistance to Develop Policy Guidelines for the Distribution Network Tariffs and widely discussed with the Regulators and Energy Community Distribution System Operators in electricity and gas platforms (ECDSO-E and ECDSO-G).