ACM publishes draft method decisions for TSOs and DSOs

The Netherlands Authority for Consumers and Markets (ACM) today published the draft method decisions for the transmission system operators (TSOs) and the distribution system operators (DSOs) in the Netherlands for the next years (2017-2021).

The purpose of these decisions is to lay down the calculation method that will be used to determine what the annual revenues of the operators can be, and what tariffs they are allowed to charge their customers (businesses and consumers). For the first time ever, the regulatory period has been set at five years. Having a longer period offers operators and their customers more certainty about the tariff levels.

With these method decisions, ACM stimulates operators to work more efficiently, while also giving them enough room to make investments. This will help realize reasonable consumer prices for electricity and natural gas. Security of supply is critical in that context. Henk Don, Member of the Board of ACM, explains: “Operators must be sufficiently able to make investments in the interest of consumers so that security of supply can also be guaranteed in the long run. At the same time, operators should charge consumers reasonable prices. In these draft decisions, we have been able to strike the right balance.”

In the method decisions, sustainability also plays a major role next to affordability and reliability. The method decisions contribute to an efficient energy transition towards more sustainable models. They are based on costs that operators are already incurring in connection with the energy transition. At the same time, they offer room to make investments over the next few years.

ACM regulates the network revenues because operators do not have any competitors. Network tariffs take up, on average, a fifth of the energy bills of consumers. Consumers thus help cover the costs for management, maintenance, and replacement of cables and pipes that together make up the energy network. By regulating the tariffs, ACM makes sure that consumers do not end up paying too much for the costs of network management.

Relevant interested parties (interest groups representing businesses and/or consumers) have six weeks, starting from the publication date, to respond to the draft method decisions. ACM will then assess the opinions that it has received. It will make changes to the method decisions if necessary. The method decisions are expected to be finalized in September 2016.

The draft method decisions (in Dutch) can be found below.