Germany's network regulator, the Bundesnetzagentur, Tuesday said it has notified seven natural gas transmission grid operators their businesses will be regulated in future, requesting information about their cost structure.
In a written statement, Bundesnetzagentur President Matthias Kurth said the regulator, in agreement with the Federal Cartel Office, has found the grid operators aren't subject to adequate competition.
So far the gas transmission grids haven't been regulated businesses.
The affected companies are the gas transportation units of Denmark's DONG Energy, Italy's Eni SpA (E), France's GDF Suez SA (GSZ.FR), Norway's Statoilhydro ASA (STO) and Germany's RWE AG (RWE.XE). Additionally, German municipal utility Erdgas Muenster's and eastern German VNG Verbundnetz Gas AG's gas transportation units are affected by the decision, the regulator said.
The companies now have two months to provide the requested cost information. Thereafter, the regulator will examine the cost structures and decide on grid access fees for the individual operators.
The companies will be included in the coming incentive-based regulation regime from 2010, under which the most cost-efficient grid operator will set the benchmark for the remaining competitors, the regulator said.
For distribution grid operators the incentive regulation regime will begin in 2009.
The move follows an initial decision by the Bundesnetzagentur last month to regulate the country's gas transmission grid. At the time, the watchdog informed the three largest gas transmission operators of E.ON AG (EOAN.XE), Wingas GmbH, a 50-50 joint venture between BASF SE's (BAS.XE) Wintershall AG and OAO Gazprom (GAZP.RS) as well as Dutch Nederlandse Gasunie NV.
Together these three operators' grids account for about 66% of German gas transmission capacity.
The Bundesnetzagentur so far hasn't provided an exact figure for cost reduction potential.
According to calculations by Germany's BNE, the industry association that represents energy companies that are new players on the German market, gas transmission grid operators have considerably overcharged their customers for access to their grids in recent years.
The industry group has said it expects gas transmission grid access fees - the price network operators charge their customers to access their grid - could be cut by up to 50%.
Between September 2006 and March 2008 the overall gas grid access fees were cut by around 12% on average of around EUR450 million, the BNE has said.