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What does the royal decree-law say about the new competencies of the CNMC in the field of energy?

FEBRUARY 13, 2019

Every year, the electricity and gas companies are remunerated for their generation, transmission and distribution activities, which together amount to 10,000 million. To this end, it is necessary to determine the tolls that consumers will have to pay to cover these costs.

The Congress of Deputies has validated the ROYAL DECREE-LAW ON URGENT MEASURES TO ADAPT THE COMPETENCIES OF THE CNMC to the requirements of Community law. This standard gives CNMC new powers in the economic field, in terms of access and connection, supervision of organised markets and investment plans, inspection and sanctions, as detailed below.
        * ECONOMIC METHOD: Approve the toll methodology, toll values, transport and distribution remuneration parameters (minus -in the case of natural gas- in relation to underground storage) and the annual remuneration for these activities.

Likewise, the CNMC is empowered to approve the remuneration (and the corresponding methodology) of the Electricity System Operator and the Technical Manager of the Gas System. The methodologies must ensure that the impact of their application on consumers and other actors in the electricity and gas systems is gradual.

On a transitional basis, it is noted that:

– The approval of tolls will be done by the CNMC once the CNMC approves its methodologies (which will not apply before 1 January 2020).

– The methodologies for tariffs will be applicable after the end of the first regulatory period foreseen respectively for gas and electricity.

– The remuneration will be set by the CNMC as from 1 January 2020.

        * ACCESS AND CONNECTION: The CNMC is responsible for approving, by means of a circular, the methodology and conditions for access and connection; this will include economic criteria, criteria for evaluating capacity, reasons for refusal, the content of applications, permits, and contracts, as well as obligations for publicity and transparency of the relevant information for access and connection. It is expected that the remaining aspects of access and connection regulation will remain within the regulatory regulation approved by the Government.

* ORGANIZED MARKETS: The CNMC shall approve the rules of organized markets in those aspects which, in accordance with European regulations, correspond to the national regulatory authority. In the case of natural gas, it means approving the technical management standards relating to the balance calculation procedure, the system of programming and nominations, shrinkage and self-consumption, and the procedure for management and use of international interconnections, leaving other aspects to the Ministry’s competence (mechanisms to guarantee the necessary level of supply, replacement plans, measurement requirements and control of entries and exits from the national system). The rules approved by the CNMC will be published in the BOE.
        * INVESTMENT PLANS: The role of CNMC in relation to the supervision of investment plans of transmission system operators is clarified. In particular, include the results of the CNMC supervision in the annual report submitted to ACER; a report to the transmission system operator’s proposal at the start of the planning procedure and a report to the Ministry at the final planning hearing procedure.
        * INSPECTION: The CNMC may inspect, through the Directorate of Energy, all matters in which it has competence.
        * SANCTIONS: The CNMC is given new powers to sanction offending types that were foreseen in the electricity and hydrocarbon (combustible gas) sector legislation: among others, non-compliance with obligations relating to the toll system, misrepresentation of information in order to cause the right to transport and distribution retribution, lack of adequate maintenance of facilities, non-compliance with confidentiality obligations, or unjustified interruption or suspension of supply. Likewise, in the area of combustible gases, the CNMC is given the power to sanction infringements in the area of measurement.

In addition, it is envisaged that CNMC will continue to carry out on a temporary basis the functions provided for in the eighth additional provision of Law 3/2013 of 4 June, pending transfer to the Ministry.

AND HOW WILL THE CNMC EXERCISE THESE COMPETENCIES?

By means of the approval of 13 circulars that we detail you here:

* Circular establishing the methodology for calculating the financial remuneration rate for electricity transmission and distribution and natural gas regasification, transmission and distribution activities.
* Circular establishing the remuneration methodology for the technical manager of the gas system.
* Circular establishing the remuneration methodology for the electricity system operator.
* Circular, establishing the methodology for calculating electricity transport and distribution tolls.
* Circular establishing the methodology for the calculation of tolls for regasification, transport and distribution of natural gas.
* Circular establishing the methodology for calculating the remuneration of the electricity transmission activity.
* Circular establishing the methodology for calculating the remuneration of the electricity distribution activity.
* Circular establishing the remuneration methodology for regulated natural gas transport and regasification activities.
* Circular establishing the remuneration methodology for the regulated natural gas distribution activity.
* Circular establishing natural gas balancing rules.
* Circular establishing the mechanisms for access and capacity allocation to be applied in the natural gas system.
* Circular establishing the methodology relating to the operation of the wholesale electricity production market.

* Circular establishing the methodology and conditions for access and connection to the transmission and distribution networks of electricity production facilities.

The CNMC will submit all these circulars to the Public Hearing process before the summer so that the new regulation can enter into force next year.

Source:

https://blog.cnmc.es/2019/02/13/que-dice-el-real-decreto-ley-sobre-las-nuevas-competencias-de-la-cnmc-en-materia-de-energia/

https://www.boe.es/boe/dias/2019/01/12/pdfs/BOE-A-2019-315.pdf

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