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ACM studies reveal: GTS incurs more costs than necessary

The revenues of GTS, the Dutch transmission system operator (TSO) for natural gas, will be gradually reduced over the next five years. This is one of the conclusions of the Netherlands Authority for Consumers and Markets (ACM) in its draft method decision on static efficiency of GTS for the period of 2017-2021. This draft method decision was made available for consultation today.

The revenues of GTS and the tariffs that follow from them must be in line with the necessary costs that the company must incur in order to be able to carry out its tasks, thereby making sure that users of natural gas do not pay more than necessary. In order to determine whether this is the case, ACM, for the first time ever, was able to compare the ‘cost efficiency’ of GTS with those of other, comparable European TSOs for natural gas in two so-called benchmark studies. These studies revealed that, if the best performing TSO has a productivity level of 100%, GTS’ productivity level is somewhere between 66% and 91%. ACM therefore comes to the conclusion that GTS incurs more costs than necessary.

Consultation

The draft method decision on static efficiency has been made available for consultation for six weeks. The final decision is expected to be released in September 2016, at which point it will also be clear what the tariffs of GTS will be.