FAQ
- 1. Who do you sign a contract with?
- 2. Who ensures supply and service quality?
- 3. How is network access regulated?
- 4. Who is responsible for implementing the ordinances?
- 5. How are network tariffs regulated and approved?
- 6. How does network access work?
- 7. What measures are in place to prevent abuse and price-fixing?
1. Who do you sign a contract with?
The EU directive calls for so-called 'unbundling' - in other words, the legal separation of gas transmission from gas production and sales activities. Therefore, you have two options:
- In most cases, your supplier remains your only point of contact. You conclude a supply contract with that supplier, which also covers gas transmission, including distribution.
- However, you can also opt for two separate contracts: one with your supplier and one with the system operator.
2. Who ensures supply and service quality?
In Germany, the Technical and Scientific Association for Gas and Water (DVGW) is responsible for regulating the quality of natural gas and supply facilities. The association's task is to offer technical and scientific support to the gas and water industries, with particular emphasis on safety, hygiene and the environment. The DVGW is the sister association of the Federal Association of the Gas and Water Industry (Bundesverbandes der deutschen Gas- und Wasserwirtschaft e.V. or BGW) and works on behalf of the government: the government sets general protection and safety objectives and leaves the details up to the DVGW's experts. Hence, the technical regulations are drawn up by experts based on a combination of theory and practice. In carrying out these duties, the DVGW is independent of economic interests and political influence. The regulations are implemented through inclusion in the respective contracts.
Top3. How is network access regulated?
The Energy Industry Act (EnWG) is a framework law. Two of its ordinances apply to the gas industry: the gas network access ordinance (GasNZV) and the gas network tariff ordinance (GasNEV). These are part of the energy law amendment of July 2005. The terms and conditions and tariffs for network access are now laid down in detail in law and statutory ordinances.
Top4. Who is responsible for implementing the ordinances?
There are two phases to the regulation process. The EnWG initially provides for cost-oriented tariff-setting. As part of this, a system operator's tariffs are examined to see whether they are based on the costs that might reasonably be incurred by an efficient system operator of its size. The Federal Agency and regional regulatory bodies check and approve the proposed network tariffs. Alongside this, the Federal Agency is drawing up a model for incentive-based regulation to replace purely cost-oriented tariff regulation and to encourage more efficient network operation. This will come into effect in 2008 at the earliest. Cross-regional transmission system operators are exempt from the cost-oriented tariff-setting if they can satisfactorily show that competition is already taking place among transmission systems.
Top5. How are network tariffs regulated and approved?
There are two phases to the regulation process. The EnWG initially provides for cost-oriented tariff-setting. As part of this, a system operator's tariffs are examined to see whether they are based on the costs that might reasonably be incurred by an efficient system operator of its size. The Federal Agency and regional regulatory bodies check and approve the proposed network tariffs. Whether cost-oriented tariff-setting will also apply to cross-regional transmission system operators has not yet been decided. Alongside this, the Federal Agency is drawing up a model for incentive-based regulation to replace purely cost-oriented tariff regulation and encourage more efficient network operation. This will come into effect in 2008 at the earliest.
- In most cases, your supplier will remain your sole point of contact: you sign a contract with your supplier, which includes gas transmission.
- However, you can also opt to sign two separate contracts: one with your supplier and the other with the transmission system operator.
6. How does network access work?
The EnWG now provides for a simplified network access procedure: in the future, customers will only need to conclude one entry and one exit contract, even if transmission takes place through networks owned by more than one operator. This model, known as the 'entry-exit model', will lead to increased competition on the German market. So far, transmission operators and the Federal Agency haven't agreed on a final model. Cooperation between system operators will be based on internal cooperation agreements.
Top7. What measures are in place to prevent abuse and price-fixing?
Whilst the Federal Agency monitors compliance with the EnWG, GasNEV and GasNZV, the Federal Cartel Office (Bundeskartellamt) does the same for the law on cartels. One of its tasks is to investigate gas supply contracts to determine whether they are the result of an abuse of market power. If it finds that they are, it can take the appropriate action in the interests of market competition.
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More info?
Want to know more about specific topics regarding liberalization?Then contact your Account Manager or send an e-mail to contact.germany
@distrigas.eu.
