Natural gas business

The natural gas activities listed below are subject to economic regulation by ERSE:

  • The high-pressure transmission of natural gas – through REN Gasodutos
  • General technical management of the SNGN – through REN Gasodutos
  • Reception, storage and regasification of LNG – through REN Atlântico
  • Underground storage of natural gas – through REN Armazenagem
  • Management of the supplier switching process – through REN Gasodutos


In July 2013, a new three year regulatory period started. The main changes introduced by the regulator were: (i) indexation of the remuneration rate to evolution in earnings on Portuguese Treasury Bonds, with a maturity of 10 years and the introduction of limit to the remuneration rate for the 2013-2016 period of between 7.33% and 11%, (ii) the introduction of a mechanism to attenuate tariff adjustments at the LNG terminal with the aim of reducing the impact of these adjustments on the tariffs defined annually for that activity and (iii) the extension of incentives based regulation to underground storage in a similar manner to that for the high-pressure transmission of natural gas and LNG reception, storage and regasification.

Currently, the level of eligible operating costs (cap) to calculate income on activities subject to incentives based regulation has a maximum permitted value and includes a fixed part, subject to a regulatory revenue cap approach and one or more parcels subject to a price cap approach, indexed to cost variables relating to the size of the infrastructures and the intensity of use.

The value approved for OPEX for the first year of the current regulation period, evolves in subsequent years in line with efficiency targets established and published by ERSE for these years and with the variation rate of the Price Index implicit in GDP. The variable for the consumption of electricity at the LNG terminal (energy component) evolves in line with the average annual variation in the price of electricity on the futures market, published by OMIP, and with the efficiency target set by ERSE.

The efficiency targets for the current regulatory period vary between 1.5% and 3% per year.

The GTG of the SNGN with regard to the process to change supplier is not subject to efficiency targets. This is also the case for certain expenditure which is not considered to be controllable by the company.

Regulation of activities

The revenues relating to invested capital stem from the return on fixed assets in operation, net of amortizations and subsidies (RAB), at a rate set by the regulator at the start of every regulatory period, at a rate of 7.98% in 2013, plus the corresponding amortizations.

Up to the end of 2013, the six monthly average RAB values for the natural gas companies had the following evolution:


Tariffs are set based on estimates of quantities and the total income allowed, calculated for each activity. This income includes return on assets, recovery of the value of amortizations and established operating costs, per activity, as well as the tariff adjustments for previous years.

The adjustments are recovered or returned in a transitory manner each year based on estimates. The real value of the adjustments arising from the differences are recovered or returned two years after they have occurred, based on a comparison with the provisional adjustments. This sum is remunerated at a regulated rate equal to the 12 month Euribor average seen each year, plus a spread published annually by ERSE for the year in question.