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Legal Alerts

Amendment to Natural Gas Tariff Regulation

Legal Alerts
Energy, Mining & Infrastructure

Recent Development

The Energy Market Regulatory Authority (“EMRA“) amended the Natural Gas Tariff Regulation (“Regulation“). The amendment was published in the Official Gazette No. 30548 dated September 27, 2018 (“Amendment“) and entered into force on the same date.

What’s New?

The current practices as to the tariff revisions set out under the procedures and principles issued by the EMRA, including the Procedure and Principles of Tariff Calculation for Natural Gas Distribution Companies, have been incorporated to the Regulation. In line with the Amendment, EMRA is now authorized to make swift and effective decisions to address significant changes in market conditions and to extend the effects of these changes over several tariff application periods.

In line with the Amendment:

  1. In the event significant changes occur regarding the parameters constituting the basis of tariffs, the EMRA is authorized to introduce tariff revisions, ex officio or by the request of the relevant legal entities;
  2. The EMRA’s revisions may be applicable immediately as to the ongoing tariff application period as well as the future tariff application periods.

At present, the parameters that constitute the basis of the tariffs include operation costs, net investment amount, consumption amount and assets of the legal entity among which operation costs are closely tied to the natural gas import prices.

The Amendment has elevated the EMRA’s established tariff revision practice as well as the procedure and principle rules to the level of Regulation.