Natural Gas Markets and Economic Regulation Committee

Background

The newly established arrangement of ERRA working bodies determines a creation of the Natural Gas Markets and Economic Regulation Committee (NG COM), that will be one of three principal Committees within ERRA framework.

The purpose of the scope of work is for the delegated Committee Members to get acquainted with the general orientation of the Committee workstreams. At the same time, it serves as the basis for the selection of sub-topics to be defined by the Committee Chair when finalizing the 2-year workplan.

The proposed scope of work of the new Committee is as follows:

  1. Economic regulation of transmission & distribution networks: regulatory models and approaches; capital expenditure review and assessment; parametric and non-parametric methods in assessing efficiency of regulated infrastructure.
    The primary element of the NG COM workstream will be to exchange best practice on the economic regulation of gas networks. The Committee will analyze inter alia, regulatory models in place and approaches towards tariffs’ review and setting (with a special focus on its core elements such as revenue setting, capital expenditure review and assessment etc.). Relevant benchmarks can be analyzed in this respect as well (e.g. EU TAR NC). Separate discussions will be devoted to efficiency of regulated infrastructure.

  2. Security, quality and reliability of supply; infrastructure development and investment incentives; smart systems.
    The Committee will analyze approaches towards safeguarding and maximizing the security of natural gas supply. The topics will look at the matter from diversification, infrastructure development and new technology deployment perspectives.

  3. Retail competition: How to do; unbundling regimes.
    The Committee will analyze approaches towards natural gas systems’ unbundling regimes and gradual implementation of retail competition mechanisms. The discussions will be enhanced by case studies and benchmarks in order to exchange observations among regulators that are in the process of liberalizing their sectors, as well as to facilitate such processes to emerging gas regulators.

  4. Cross-border trade and regional market integration aspects.
    This workstream will focus on how is the cross-border cooperation established how exactly do gas markets integrate. Relevant benchmarks will be drawn in order to analyze the proposed tools for increasing the efficiency of trade, eliminating bottlenecks etc., such as the EU network codes and guidelines (e.g. CAM NC, BAL NC, INT NC,).

  5. LNG and CNG: policies, regulatory models and approaches.
    This item will investigate the rising importance of natural gas formats that are alternative to pipeline. LNG and CNG supply and their potential to substitute traditional pipeline operations will be analyzed from the technical (infrastructure, liquefaction and regasification, CNG and other formats) and regulatory (e.g. tariffication) perspectives.

  6. Licensing procedure of market activities, the regulatory approaches to applications for licenses.
    This workstream will focus on sharing best practices regarding licensing policies and procedures of license granting.

  7. Organized wholesale markets and derivatives: design and functioning; aspects of transparency; market monitoring and reporting schemes; exchanges and balancing.
    This scope element will investigate the virtues of interconnected, liquid gas markets from the market-operations perspective. Based on case studies from liberalized gas regimes, the regulators will increase their knowledge about trading, reporting or balancing in order to better monitor their respective systems and be able to detect market position abuse or misconduct.

 


Materials