Decree No. 150 / 2007 Coll.

Decree on the method of regulating prices in energy sectors and price regulation procedures

Valid Order Effective from 01.07.2007
150
DECLARATION
of 19 June 2007
on the way prices are regulated in energy sectors and price regulation procedures
The Energy Regulatory Authority (hereinafter "the Authority ') provides, pursuant to Article 98 (7) of Act No. 458 / 2000 Coll., on the Terms and Conditions of Business and on the Performance of Government Administration in the Energy Sector and on the Amendment of Certain Laws (Energy Act), as amended by Act No. 670 / 2004 Coll., and pursuant to § 12 (3) of Act No. 180 / 2005 Coll., on the Promotion of Electricity from Renewable Energy Sources and on the Amendment of Certain Laws (Act on the Promotion of the Use of Renewable Resources), to implement § 17 (7) (c) of the Energy Act and § 4 (10 of the Act on the Promotion of Renewable Resources:
§ 1
Basic concepts
For the purposes of this decree:
(a) the regulated year of the calendar year for which prices are fixed by the Office;
(b) a regulatory period defined by a period of five consecutive controlled years.
Method of regulation and price formation in electricity
§ 2
(1) The Authority shall regulate electricity transmission prices as set out in Annex 1 to this Regulation.
(2) The Office shall regulate the price of system services as set out in Annex 2 to this Regulation.
(3) The Authority shall regulate the electricity distribution prices of the regional distribution system operator as set out in Annexes 3 and 4 to this Regulation and the electricity distribution prices of the local distribution system operator in accordance with Article 3 (6).
(4) The price for the transmission of electricity and the prices for the distribution of electricity at high voltage and high voltage levels consist of the price for the reserved capacity of the transmission or distribution system and the price for the use of the transmission or distribution system networks.
(5) The price for the distribution of electricity at low voltage level consists of the price for the reserved capacity of the distribution system, determined by the size of the rated current value of the main circuit breaker before the electrometer and the prices for the use of the distribution system.
(6) Prices for electricity distribution include the component related to the cost of electricity transmission and to the distribution of electricity in neighbouring distribution systems at a very high voltage level, the component related to covering part of the cost of the higher voltage levels of the distribution system, the component related to compensation of the contributions to the production of electricity from non-connected power stations (hereinafter referred to as "decentralised production").
(7) The Office regulates the electricity prices of the supplier of the last instance in the manner set out in Annex 5 to this Decree.
(8) The Authority regulates the price to cover the additional costs associated with the promotion of electricity from renewable sources, combined electricity and heat and secondary energy sources in the manner set out in Annex 6 to this Decree. Annex 6 to this Decree also provides for a procedure for compensating for additional costs associated with the promotion of electricity from renewable sources, cogeneration of electricity and heat and secondary energy sources.
(9) The Authority regulates the price for the activities of the electricity market operator as set out in Annex 7 to this Regulation.
(10) The Authority shall determine the level of the contribution for decentralised production. The procedure for compensation for decentralised production allowances is laid down in Annex 8 to this Decree.
(11) The Authority sets purchase prices and green electricity bonuses from renewable energy sources under specific legislation1). The purchase prices and green bonuses are applied over the lifetime of electricity generation. During the lifetime of the electricity generation plant, classified in the relevant category according to the type of renewable resource used and the date of entry into service, the purchase prices shall be increased year-on-year by at least 2% and by a maximum of 4%, with the exception of combustion biomass and biogas production.
§ 3
(1) The method of pricing electricity transmission, system services, distribution of electricity and the activities of the electricity market operator is laid down for a regulatory period using a regulatory formula.
(2) For the regulatory period, the Authority shall determine and notify the licence holder of the parameters of the regulatory formula to the following extent:
(a) the starting value of the authorised costs and the initial value of the depreciation for the licence holder; for electricity distribution activities broken down by voltage levels,
(b) the starting value of the asset base for the licence holder; for electricity distribution activity, broken down by voltage level;
(c) the annual value of the efficiency factor for the licence holder;
(d) the wage escalation factor for the licensed activity;
(e) the percentage of the difference in costs resulting from the difference between the actual amount achieved and the estimated purchase price of the power-generating facility to cover the losses in the transmission system;
(f) the permissible margin of loss margin for electricity transmission activity;
(g) the permissible level of technical loss for the licence holder;
(h) the permitted level of commercial loss for the licence holder;
(i) the reduction coefficient for the licensed activity of permitted commercial losses;
(j) profit for system service activities;
(k) the starting price for the assessment, clearing and settlement by the electricity market operator.
(3) Amendments to the parameters of the regulatory formula referred to in paragraph 2 are only possible during the regulatory period in cases where:
(a) amendments to the legislation directly related to the licensed activity of the licence holder which have a significant impact on the parameters of the regulatory formula;
(b) exceptional changes in the electricity market which are of particular concern;
(c) their determination on the basis of incorrect, incomplete or false evidence or data.
(4) For a regulated year, the Authority shall determine and notify the licence holder of the parameters of the regulatory formula to the following extent:
(a) the rate of return for the licensed activity; the value of the rate of return established with effect for the entire regulatory period is adjusted only in respect of possible changes in the rate of income tax under the special legislation2),
(b) a change in the value of the regulatory base of the assets for the licence holder; for electricity distribution, the change in value is reported broken down by voltage levels;
(c) a change in the value of the TSO's depreciation;
(d) the market opening factor for the electricity distribution licence holders;
(e) investment correction for licence holders for distribution of electricity broken down by voltage levels;
(f) correction factors for the licence holder,
(g) the permitted distribution framework for permitted revenues for the electricity distribution activity;
(h) the pre-values for electricity collection and consumption for the calculation of the prices of the regulated year;
(i) the provisional purchase price of power electricity to cover losses in transmission and distribution systems;
(j) the permitted level of total losses in the transmission system;
(k) the part of the auction proceeds used to reduce the permitted revenues for the electricity transmission activity;
(l) income from other activities linked to the licensed activity; for electricity distribution activity, broken down by voltage level;
(m) the proceeds from the settlement of differences resulting from the settlement of the costs of derogations for the licence holders for the transmission of electricity.
(5) The Authority will notify the specified parameters of the regulatory formula
(a) the transmission system operator shall not later than 7 months before the start of the regulatory period, if the parameters referred to in paragraph 2 are concerned, and not later than 7 months before the start of each regulated year, if the parameters referred to in paragraph 4 are concerned;
(b) the distribution system operator no later than 5 months before the start of the regulatory period, if the parameters referred to in paragraph 2 are concerned, and no later than 5 months before the start of each regulated year, if the parameters referred to in paragraph 4 are concerned, except for the parameter referred to in paragraph 4 (i), which the Authority shall notify no later than 3 months before the start of each regulated year;
(c) to the electricity market operator no later than 5 months before the start of the regulatory period, if the parameters referred to in paragraph 2 are concerned.
(6) The local distribution system operator shall use the electricity distribution prices of the regional distribution system operator to which it is connected. At the request of the local distribution system operator, the Authority shall calculate different electricity distribution prices using the appropriate procedure for setting the electricity distribution prices of the regional distribution system operator. The local distribution system operator shall submit to the Authority the economic and technical data necessary to determine the different electricity distribution prices to the extent determined by the Authority. The different pricing for electricity distribution is applied until the end of the regulatory period in which it was first implemented.
§ 4
(1) The Authority shall notify the electricity market operator by 31 July of the calendar year preceding the regulated year of the calculated price for the activities of the electricity market operator.
(2) The Authority shall notify the transmission system operator by 15 August of the calendar year preceding the regulated year and the regional distribution system operator by 31 August of the calendar year preceding the regulated year of the calculated price for the reserved capacity of the transmission system, the price for the use of transmission system networks and the price for system services, including the other prices required for the calculation.
(3) The Authority will notify the regional distribution system operator by 30 September of the calendar year preceding the regulated year and, at the request of the local distribution system operator, by 15 October of the calendar year preceding the regulated year of the calculated price for the reserved capacity of the regional distribution system, the price for the use of the regional distribution system networks for high and high voltage levels. The Authority shall also notify the regional distribution system operator and, at the request of the local distribution system operator, by 31 October of the calendar year preceding the regulated year of the calculated low voltage electricity distribution price.
(4) The Authority will notify the local distribution system operator, to which it sets different prices for the distribution of electricity, by 15 November of the calendar year preceding the regulated year, the calculated price for the reserved capacity of the local distribution system and the price for the use of the local distribution system networks for high and high voltage levels and prices for the distribution of electricity at low voltage levels.
(5) The Office shall notify the supplier of the last instance by 31 October of the calendar year preceding the regulated year of the calculated electricity price of the supplier of the last instance.
(6) The Office shall fix the prices by 30 November of the calendar year preceding the regulated year, with effect from 1 January of the regulated year.
§ 5
The method of determining the correction factors in electricity is set out in Annex 9 to this Decree.
Method of regulation and pricing in gas
§ 6
(1) The Office shall regulate gas prices as set out in Annex 10 to this Regulation.
(2) The Authority shall regulate the gas distribution prices of the regional distribution system operator in the manner set out in Annex 11 to this Regulation and the price for the distribution of gas by the local distribution system operator pursuant to Article 7 (6).
(3) The Office regulates prices for the supply of last resort by means of a material price adjustment.
§ 7
(1) The method of pricing gas transport and gas distribution is laid down for a regulatory period using a regulatory formula.
(2) For the regulatory period, the Authority shall determine and notify the licence holder of the parameters of the regulatory formula to the following extent:
(a) the starting value of the authorised costs and the initial value of the depreciation for the licence holder;
(b) the starting value of the asset base for the licence holder;
(c) the annual value of the efficiency factor for the licence holder;
(d) the wage escalation factor for the licensed activity;
(e) the coefficient of the sampling points for the holders of the gas distribution licence.
(3) Amendments to the parameters of the regulatory formula referred to in paragraph 2 are only possible during the regulatory period in cases where:
(a) amendments to the legislation directly related to the licensed activity of the licence holder which have a significant impact on the parameters of the regulatory formula;
(b) exceptional changes in the gas market of particular consideration;
(c) their determination on the basis of incorrect, incomplete or false evidence or data.
(4) For a regulated year, the Authority shall determine and notify the licence holder of the parameters of the regulatory formula to the following extent:
(a) the rate of return for the licensed activity; the value of the rate of return established with effect for the entire regulatory period is adjusted only in respect of possible changes in the rate of income tax under the special legislation2),
(b) the market opening factor for licence holders;
(c) a change in the value of the regulatory base of the assets for the licence holder;
(d) a change in the value of the depreciation of the transmission system operator;
(e) investment correction for holders of a gas distribution licence;
(f) correction factors for the licence holder,
(g) the permitted dispersion framework for permitted revenues for the activity of gas distribution by the regional distribution system;
(h) the planned number of the licence holder's gas distribution points;
(i) the planned average purchase price of the gas supply to cover permitted losses in the distribution system for the holder of a gas distribution licence;
(j) the allowed gas purchase price to cover losses and to estimate the permitted gas energy for compression station propulsion in the transmission system;
(k) the quantity of losses allowed in the transmission system;
(l) the permitted amount of gas energy for the propulsion of compression stations in the transmission system;
(m) the allocation coefficients for the holders of a gas licence of the adjusted total sales authorised;
(n) the permitted level of loss in the distribution system for the licence holder;
(o) the planned costs of purchasing distribution services for gas distribution licence holders.
(5) The Authority will notify the specified parameters of the regulatory formula
(a) the transmission system operator no later than 5 months before the start of the regulatory period, where the parameters referred to in paragraph 2 are concerned, and no later than 5 months before the start of each regulated year, where the parameters referred to in paragraph 4 are concerned,
(b) the distribution system operator no later than 5 months before the start of the regulatory period, if the parameters referred to in paragraph 2 are concerned, and no later than 15 September of the calendar year preceding each regulated year, if the parameters referred to in paragraph 4 are concerned.
(6) The local distribution system operator shall use the gas distribution prices of the regional distribution system operator to which the local distribution system is connected directly or through another local distribution system. Where the gas distribution prices referred to in the first sentence do not cover the costs related to the distribution of gas by the local distribution system, at the request of the local distribution system operator, the Authority shall calculate different gas distribution prices for the relevant regulatory period, using the procedure set out in Annex 11 to this Regulation mutatis mutandis to calculate the prices for the regulated year of the regulatory period.
§ 8
(1) The transmission system operator shall submit to the Authority, by 15 August of the calendar year preceding the regulated year at the latest, the data necessary for the determination of the gas price, including the necessary calculations.
(2) The Authority shall notify the transmission system operator of the calculated gas transmission prices by 15 September of the calendar year preceding the regulated year.
(3) The Authority shall notify the regional distribution system operator by 30 September of the calendar year preceding the regulated year of the calculated prices for the distribution of gas by the regional distribution system.
(4) The Authority will notify the local distribution system operator, to which different gas distribution prices have been set in accordance with Article 7 (6), by 30 October of the calendar year preceding the regulated year, the calculated gas distribution prices of the local distribution system.
(5) The Authority will invite the local distribution system operator who has requested that gas distribution prices be set in accordance with Article 7 (6) within 15 calendar days of receipt of the request for the submission of the economic and technical data necessary for the determination of different prices. The supporting documents submitted shall be evaluated by the Office within 30 calendar days of their delivery due to their size and content needed to determine different prices for the specific conditions of the local distribution system. In the following 30 calendar days, the Authority shall notify the local distribution system operator of the calculated gas distribution prices.
(6) The Authority shall fix the prices for the distribution of gas by the local distribution system pursuant to Article 7 (6) no later than the following calendar month after the calendar month in which the different prices were calculated, with effect from the following calendar month after the calendar month in which the prices were fixed.
(7) The Office shall fix the prices by 30 November of the calendar year preceding the regulated year, with effect from 1 January of the regulated year.
§ 9
The method of determining the correction factors in gas is set out in Annex 12 to this Decree.
§ 10
Procedure for determining the prices for the creation of a licence holder and the conversion of existing licence holders in electricity and gas
(1) Where a licence is granted to a legal person without a legal predecessor or a licence is granted to a natural person during a calendar year and the licence holder has not carried out the licensed activity in the previous calendar year, the Office shall apply the provisions of Sections 3 and 4 and the provisions of Sections 7 and 8 to the gas industry, mutatis mutandis, when setting prices in electricity.
(2) Where, during a calendar year, a licence is granted to a legal successor as a result of a merger of 3) two or more licence holders for the same activity, the prices of regulated activities laid down for the licensor's legal predecessor for each of their designated territories shall continue to apply to such licence holders until the end of the calendar year. If, during a calendar year, two or more licence holders are involved in the same activity, the prices of the regulated activities set for the licensee in respect of each of their designated territories shall continue to apply to the licence holder to whom the assets of the existing or existing licence holders are transferred until the end of the calendar year.
(3) If, during a calendar year, the assets of the holder of the licence are transferred to a single member or shareholder (5) who holds or applies for the same activity as the deceased licence holder, the prices of the regulated activities of the licensee shall continue to apply to him until the end of the calendar year. Where, during a calendar year, a division of the licence holder with the setting up of new companies or compounds (6) is made, the prices of the regulated activities of the licence holder shall continue to apply to the legal successor or successors, provided that they hold licences for the same activity as the licensee being acquired, until the end of the calendar year. Where, during a calendar year, a division of the licence holder by the segregation of new companies or by the segregation of compounds is made), the prices of the regulated activities of the licence holder shall continue to apply to the legal successor or successors, provided that they hold licences for the same activity as the licensee being acquired, until the end of the calendar year.
(4) Where, during a calendar year, a transfer or lease of an undertaking or part thereof involving an energy installation serving the performance of a licensed activity is made, the acquirer or lessee of the undertaking or part thereof shall, by the end of the calendar year, pay the price of regulated activities applied by the transferor or or the lessor in the designated territory where the energy installation is located.
(5) Where the effects of the merger or merger referred to in paragraph 2, the transfer of assets to a shareholder or shareholder, the division of the licence holder or the divestment referred to in paragraph 3, or the transfer or lease of an undertaking or part thereof referred to in paragraph 4, take place after 30 November of the calendar year, the Office shall base its determination of the regulated prices for the regulated year on the information provided by the legal predecessors of the licence holder, the distributed companies, the transferee or the lessor the lessee of the undertaking or part thereof, unless it is otherwise provided for in justified cases. The same shall apply where the legal effects of the merger, merger, division, division, transfer of assets to one member or shareholder, or transfer or lease of an undertaking or part thereof under this paragraph, initiated during a calendar year, would not occur until the first day of the regulated year.
§ 11
Method of regulation in heating
(1) The Authority regulates the price of heat energy in a material way. The price decision shall be published by the Office no later than 30 days before the date of its entry into force.
(2) Where, in order to ensure the reliability and security of the supply of heat energy, it is necessary to lay down different conditions for price negotiations for a defined range of suppliers of heat energy, the Authority shall determine such conditions for the negotiation of the price and the range of suppliers of heat energy on the basis of the facts evidenced by the supplier.
§ 12
Cost sharing for cogeneration
The supplier of heat energy shall, when dividing the common costs of the combined production of electricity and heat in the manner set out in Annex 13 to this Decree, act in so far as it does not proceed in another credible and controllable manner.
§ 13
Transitional provision
The duration of the regulatory period, which began on 1 January 2005 and ended on 31 December 2009, according to existing legislation, remains unaffected.
§ 14
Repeal
The following shall be deleted:
1. Decree No. 438 / 2001 Coll.
2. Decree No. 13 / 2003 Coll., amending Decree No. 438 / 2001 Coll., determining the content of economic data and the procedures for regulating prices in energy.
3. Decree No. 575 / 2004 Coll., amending Decree No. 438 / 2001 Coll., laying down the content of economic data and the procedures for regulating energy prices, as amended by Decree No. 13 / 2003 Coll.
§ 15
Efficacy
This decree shall take effect on 1 July 2007.
Chairman:
Ing. Fiøt v. r.

Příloha č. 1

Annex No 1 to Decree No 150 / 2007 Coll.
Procedure for setting electricity transmission prices
The unit price for the annual reserved capacity of the transmission system cperci in CZK / MW is determined by the regulatory formula
cperci = PVpei-PAPPpei-PTPPpei)
where
i is the serial number of the regulated year;
PVpei [CZK] is the value of the allowed revenues of the transmission system operator for the regulated year determined by the relationship
PVpei = PNpei + Olei + Zpei
where
PNpei [CZK] is the allowed costs of the transmission system operator for a regulated year determined by the relationship
PNpei = PNpe0 × 1-Xpei × vizt = l1 + i-lpMI × mit-l + l-pMI × Nt) 100
where
PNpe0 [CZK] is the starting value of the allowed costs of the transmission system operator necessary for the provision of transmission services determined analytically by the Authority,
Xpe [-] is the annual value of the efficiency factor for the electricity transmission activity determined analytically by the Authority,
l is the year preceding the first regulated year of the regulatory period;
pMI [-] is the coefficient of the wage escalation factor for the electricity transfer activity expressing the degree of influence of the wage escalation factor as determined by the Authority analytically,
MIT-1 [-] is the wage escalation factor determined on the basis of the index of average monthly industrial wages reported by the Czech Statistical Office in Table 3106 01-02- 02 for the first - fourth quarter of the year t-1,
NT [-] is the industrial escalation factor determined on the basis of the share of the rolling averages of the basis indices of industrial producers' prices over the last 12 months and the previous 12 months reported by the Czech Statistical Office in the table of indexes of industrial producers' prices for the month of April t; however, if the value of the so determined proportion of the rolling averages is less than 100, the value of 100 shall be used for the purposes of calculating,
Olei [CZK] are depreciation of the long-term tangible and intangible assets of the transmission system operator used to provide transmission services for the regulated year determined by the relationship
Olei = Ole0 + I- 2ZHOpet
where
Opel 0 [CZK] is the starting value of the depreciation of the long-term tangible and intangible assets of the transmission system operator used to provide transmission services, as determined by the Office,
ZHOpet [CZK] is the annual change in the value of the depreciation of the long-term tangible and intangible assets of the transmission system operator in year t; for the first regulated year of the regulatory period, ZHOpet = 0,
Zpei [CZK] is the gain of the transmission system operator for the regulated year determined by the relationship
Zpei = Rabpei × MVpei
where
RABpei [CZK] is the value of the control base of the transmission system operator's assets for the regulated year determined by the relationship
RABpei = RABpe0 + ZAPT = ll + i-2ZHAPet
where
RABpe0 [CZK] is the baseline value of the transmission system operator's control base determined analytically by the Authority,
ZHAPet [CZK] is the annual change in the value of the control base of the transmission system operator's assets in year t; for the first regulated year of the regulatory period, ZHAPet = 0,
MVpei [%] is the rate of return for the electricity transmission activity for the regulated year, which is the weighted average cost of capital determined analytically by the Authority,
PAPPpei [CZK] is part of the proceeds of auctions on cross-border profiles of the transmission network of the Czech Republic for a regulated year, the value of which is determined by the Office,
PTPpei [CZK] is the proceeds from other activities related to the electricity transfer activity determined analytically by the Office,
RRK (PS- VVN) ki [MW] is the annual reserved capacity of the customer's transmission system for the regulated year; the capacity of the transmission system facilities is reserved for direct customers from the transmission system (without export, without transit, without the consumption of pump-operated power stations and without the purchase of category 1 and 2 producers, except for self-producers, to cover consumption at the production site) and for transmission-connected distribution system operators; the reserved capacity for the distribution system operator whose distribution system is connected to the transmission system is determined by the average of the balance sheet balances of the four winter months (November to February) over the last three completed winter periods before the regulated year at the transmission and distribution system interface; for direct demand from the transmission system, the reserved capacity shall be determined on the basis of the maximum demand values of the transmission system over the last completed winter period (November to February) before the regulated year.
The unit price using cpepzi transmission system in CZK / MWh is determined by the relationship
cpepzi = PRNpei + Kpei-2 × Pi-2100 × Pi-l100RPME 2i
where
PRNpei [CZK] are variable costs of the transmission system operator without netting the correction factor for the regulated year determined by the relationship
PRNpei = NCEPei × PZTpei
where
NCEpei [CZK / MWh] is the average purchase price of electricity to cover losses in the transmission system for a regulated year established by the Authority, which also includes costs associated with the derogation resulting from the purchase of electricity from renewable sources under the Renewable Resources Support Act,
PZTpei [MWh] is the allowed amount of transmission loss for the regulated year determined by the relationship
PZTpei = kzPS × RPMezti100
where
kzPS [%] is the allowed rate of transmission loss related to the input flow of electricity to the transmission system without a system transit specified by the Authority;
RPMEzti [MWh] is the flow of electricity at the entry into the transmission system without systemic transit in a regulated year,

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Regulation Information

CitationDecree No. 150 / 2007 Coll., on the method of regulating prices in energy sectors and procedures for regulating prices
Regulation TypeOrder
Author-
CollectionCode of Laws
Date of Promulgation28.06.2007
Effective from01.07.2007
Effective until-
Status Valid
The regulation text is for informational purposes only.
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