Richard Melson
October 2006
Energy Regulation
NERA Economic Consulting
One Front Street
"Sepetys, Kristina" Kristina.Sepetys@NERA.com
http://www.nera.com NERA's Global Energy Regulation NewsletterTuesday, October 17, 2006
Dear Colleague:
The wide variety of stories this month offers some interesting comparisons.
Some of this month’s decisions contradict conventional views of national regulatory styles. In the UK, Ofgem completed what amounts to a "prudency review" of special costs incurred under the grid company’s incentive scheme. Ofgem also extended price controls on gas distribution for one year. Neither decision fits with Britain’s image as the home of long-term, light-handed price caps, but both decisions show how the system adapts to new conditions. Similarly, in New Zealand, which has so far avoided most formal regulatory controls, Unison Networks agreed what amounts to a price cap, in order to avoid the Commerce Commission taking even more drastic measures. In the Netherlands, the Council of the NMa published the new X-factors for electricity transmission (1.4%) and distribution (1.1%) networks.
Regulatory bodies in Belgium (national and regional levels), in France and at the European Commission have all been discussing the Suez-GDF merger, with Belgian agencies focusing in particular on opening up access to networks, as well as reducing the consolidation caused by the merger. On the other hand, the European Commission has decided that the Spanish energy regulator breached EU merger regulations when it imposed special conditions on E.ON’s proposed takeover of Endesa.
The Spanish government amended legislation to appoint four companies as suppliers-of-last-resort, responsible for offering a default tariff to gas retail customers under competition. In the US, Illinois completed a successful auction to procure electric supplier-of-last-resort services from the competitive market – a procedure for which NERA merits an honorable mention as the organizer.
Some US gas companies were able to apply for price reductions, as gas prices fell. Meanwhile, other companies left with high cost gas were still applying for price increases.
Finally, the Texan energy regulator produced evidence that an (unnamed) company manipulated market prices by withholding supplies, which brings a full-scale investigation one step closer.
If you find the GERN useful, you may want to visit NERA's website at
www.nera.com, where you can find not only the GERN and Energy Regulation Briefs, but also a number of other reports and publications. If you would like to know more about the events reported in this newsletter, or to request a copy of our Energy Regulation Briefs, feel free to contact us. These bulletins are transmitted free of charge to any email address, upon request. To add a name, or unsubscribe, please contact kristina.sepetys@nera.com. Please type "Newsletter" in the subject heading and include your name, title, organization, postal and email address.Kind regards,
Kristina Sepetys
NERA Economic Consulting
To unsubscribe: If you have received this message in error or wish to be removed from our distribution list at any time, just reply to this e-mail and type the word "unsubscribe" in the subject line.
These documents can only be read using Adobe Acrobat (*.pdf format), if you do not have a copy of the Adobe Acrobat reader then a shareware version can be downloaded from:
http://www.adobe.com/prodindex/acrobat/readstep.html.NL_Global_Energy_Regulation_Newsletter_EN217_Issue88-FINAL.pdf
NERA GERN September 2006
Attachment: NL_Global_Energy_Regulation_Newsletter_EN217_Issue88-FINAL.pdf (0.21 MB)Sepetys, Kristina Kristina.Sepetys@NERA.com
Tuesday, October 17, 2006