Natural gas, electricity, liquefied petroleum gas (LPG) sectors in all their categories, namely bottled, piped, and in bulk, oil-derived fuels and biofuels, and the management of electric mobility network operations are regulated by ERSE – Energy Services Regulatory Authority.
ERSE is an independent entity, governed by its Legal Statutes, but as a public administrative body has to comply with the objectives defined by the energy policy, defined by the Government.
In the natural gas and electricity sectors, ERSE has economic regulation powers, being responsible for: i) setting the allowed revenues; ii) define the regulatory parameters; iii) approve the price of regulated tariffs and their methodology. ERSE has these regulatory powers regarding monopoly activities, such as the transmission, distribution and sale of last resort electricity and natural gas. ERSE also has economic regulation powers regarding electric mobility network operations.
ERSE guides its economic regulation of regulated activities by these principles:
- Economic efficiency in the allocation of resources for the performance of regulated activities;
- The promotion of the economic sustainability;
- The application of equal terms in the definition of tariffs and prices;
- Tariff uniformity and convergence at national level
- Preventing the cross-subsidisation between activities and or customers by adopting the paying user principle;
- Adopting a incentives mechanisms for promote the fair sharing of cost and revenues between regulated companies and customers;
- Approve fair allowed revenues in order to promote an economically efficient performance of the regulated activities complying with the applicable quality standards and safety levels
Tariffs are set to provide each activity with an amount of allowed revenue calculated in accordance with the applicable Tariff Regulations.
The definition of tariff methodologies and revenues and the approval of tariffs and prices comply with requirements and obligations of transparency and information sharing, namely through the process of consultation with the Tariff Council. And also to the Advisory Council, if in addition to tariff matters, include issues of a regulatory nature.