CHAPTER IV U.K. RECONCILIATION OF REVENUE

Article 17 U.K. General provisions

1. Where and to the extent that the transmission system operator functions under a non-price cap regime, the following principles shall apply:

(a) the under- or over-recovery of the transmission services revenue shall be minimised having due regard to necessary investments;

(b) the level of transmission tariffs shall ensure that the transmission services revenue is recovered by the transmission system operator in a timely manner;

(c) significant differences between the levels of transmission tariffs applicable for two consecutive tariff periods shall be avoided to the extent possible.

2. Where and to the extent that the transmission system operator functions under a price cap regime or applies a fixed payable price approach set out in Article 24(b), no revenue reconciliation shall occur and all risks related to under- or over-recovery shall be covered exclusively by the risk premium. In such case Articles 18, 19(1) to (4) and 20 shall not apply.

3. Subject to the requirements of periodic consultations pursuant to Article 26 and subject to approval [F1 by the national regulatory authority], non-transmission services revenue may be reconciled as set out in this Chapter, mutatis mutandis.

Textual Amendments

F1 Words in Art. 17(3) substituted (31.12.2020) by S.I. 2019/531, Sch. 5 para. 5G (as inserted by The Gas Tariffs Code (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/1393), reg. 1(2), Sch. para. 3); 2020 c. 1, Sch. 5 para. 1(1)

Article 18 U.K. Under- and over-recovery

1. The under- or over-recovery of the transmission services revenue shall be equal to:

• R_A – R

Where:

• R_A is the actually obtained revenue related to the provision of transmission services;

• R is the transmission services revenue.

The values of R_A and R shall be attributed to the same tariff period and, where an effective inter-transmission system operator compensation mechanism referred to in Article 10(3) is established, shall take such mechanism into account.

2. Where the difference calculated in accordance with paragraph 1 is positive, it shall indicate an over-recovery of the transmission services revenue. Where such difference is negative, it shall indicate an under-recovery of the transmission services revenue.

Article 19 U.K. Regulatory account

1. The regulatory account shall indicate the information referred to in Article 18(1) for a given tariff period and may include other information, such as the difference between the anticipated and the actual cost components.

2. The transmission system operator's under- or over-recovered transmission services revenue shall be attributed to the regulatory account, unless other rules have been enacted [F2 by the national regulatory authority].

3. Where incentive mechanisms for capacity sales are implemented, subject to a decision [F2 by the national regulatory authority], only a part of the transmission system operator's under- or over-recovery shall be attributed to the regulatory account. In such case, the residual part thereof shall be kept or paid, as relevant, by the transmission system operator.

4. Each transmission system operator shall use one regulatory account.

5. Subject to a decision [F2 by the national regulatory authority], the earned auction premium, if any, may be attributed to a specific account separate from the regulatory account referred to in paragraph 4. The national regulatory authority may decide to use this auction premium for reducing physical congestion or, where the transmission system operator functions only under a non-price cap regime, to decrease the transmission tariffs for the next tariff period(s) as set out in Article 20.

Textual Amendments

F2 Words in Art. 19 substituted (31.12.2020) by S.I. 2019/531, Sch. 5 para. 5H (as inserted by The Gas Tariffs Code (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/1393), reg. 1(2), Sch. para. 3); 2020 c. 1, Sch. 5 para. 1(1)

Article 20 U.K. Reconciliation of regulatory account

1. The full or partial reconciliation of the regulatory account shall be carried out in accordance with the applied reference price methodology and, in addition, by using the charge referred to in Article 4(3)(b), if applied.

2. The reconciliation of the regulatory account shall be carried out pursuant to the rules enacted [F3 by the national regulatory authority] over a given reconciliation period, meaning the time period over which the regulatory account referred to in Article 19 shall be reconciled.

3. The regulatory account shall be reconciled with the aim of reimbursing to the transmission system operator the under-recovery and of returning to the network users the over-recovery.

Textual Amendments

F3 Words in Art. 20(2) substituted (31.12.2020) by S.I. 2019/531, Sch. 5 para. 5I (as inserted by The Gas Tariffs Code (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/1393), reg. 1(2), Sch. para. 3); 2020 c. 1, Sch. 5 para. 1(1)