Investments Evaluation in Electricity and Natural Gas Transmission Infrastructure Projects

The methodology is prepared and published in pursuance of Art.13, Para.6 of Regulation (ЕС) № 347/2013 of the European Parliament and the Council, regarding the criteria used to evaluate the investments in electricity and natural gas transmission infrastructure projects, and the higher risks incurred by them.

Network operators annually draft and consult with all stakeholders until 30 April a ten-year plan that shows market participants the main transmission infrastructure envisaged for construction, expansion, reconstruction and modernization over the next 10 years. The plan contains all the investments already decided and identifies new investments to be made over the next three years, as well as provides for an implementation schedule. The methodology defines the criteria with which the proposed investments shall comply in order to be approved by EWRC. The investment costs are recovered through the prices in accordance with the regulations.

Risk mitigation measures in the electricity and natural gas regulatory framework are limited to application of the existing rules for price regulation in both sectors, the inclusion in the tariffs of the costs directly linked to the realization of the investments and determining of the respective return on capital.

In cases when a project promoter incurs higher risks for the development, construction, operation or maintenance of projects of common interest, compared to the normal risks faced by comparable infrastructure projects, EWRC identifies and evaluates the risks from a regulatory perspective, including the nature of the specific risk and the measures taken for its mitigation. Higher risk of the projects of common interest, which is not offset, could be covered by risk components in rate of return on capital invested or by additional incentives, as EWRC evaluates the potential impact of a risk on a project promoter as part of the overall regulatory framework.