National Regulatory Authorities (NRA) have the duty of fixing or approving transmission or distribution tariffs or their methodologies in Europe.
Tariff methodologies should reflect the fixed costs of transmission and distribution system operators and provide appropriate incentives to them to increase efficiencies, fostering market integration and security of supply, supporting efficient investments and related research activities; as well as facilitating innovation in the interest of consumers in areas such as digitalisation, flexibility services and interconnection.
Network tariffs shall, inter alia, be:
The Tariff setting process consists of three steps:
The allowed revenues (including the remuneration method for TSO/DSO costs) and other relevant costs are determined.
The tariff structure is defined.
The costs are allocated to each of the tariff structure's items (i.e. charges paid by network users).