Consultation published on seasonal multiplier factors for gas

31 January 2019

Gas flame

Today the Utility Regulator publishes a consultation setting out our proposals for the seasonal multiplier factors to be applied to entry capacity charges for gas transmission from 1 October 2019. These align with the factors proposed by the Commission for Regulation of Utilities (CRU).

Seasonal multipliers factors apply to non-annual entry capacity products, for example monthly or daily capacity bookings, by applying a multiplier which either increases or decreases the relevant proportion of the annual tariff. The factors reflect the seasonality of gas flows during the year and are set to incentivise suppliers to make more use of the network in the summer and shift demand away from the winter peak. The tariff for a non-annual capacity product is calculated by multiplying the annual tariff by the appropriate seasonal multiplier. These have been included in the gas transmission charging regime since October 2015.

The consultation meets three separate requirements from the EU Regulation on establishing a network code on harmonised transmission tariff structures for gas. Firstly, we are now required to consult annually on the seasonal multiplier factors to be applied to entry capacity charges. We are proposing to reduce these slightly from current levels to meet the lower allowed limits. Secondly, we have a similar requirement to hold an annual consultation on discounts to capacity charges for interruption and storage. As there is no forecast interruption or storage in the NI gas transmission network, no discounts are proposed. Finally, we meet the requirement to consult on whether the postalised regime for transmission charging meets the requirements of an inter-TSO compensation mechanism. We are seeking the views of interested parties to these three separate areas.

Changes to the seasonal multiplier factors could lead to minor changes in how gas transmission revenue is recovered, which are unlikely to have any impact on customer tariffs.