Entso-E reached agreement on inter-TSO compensation system for 2010

Entso-E, the organisation of the European electricity transmission system operators, reached an agreement on 16 December on the inter-TSO compensations for 2010. The system compensates costs, which are caused by the transmission of electricity through countries, to TSOs. The ITC/perimeter fee will be reduced by half.The inter-TSO compensation (ITC) arrangement creates a basis for the efficient operation of the European electricity transmission system and for a free electricity market. The ITC arrangement has enabled the elimination of cross-border fees from cross-border electricity transmissions. The first ITC agreement, which covered 8 countries, was reached in 2002. The present agreement covers 33 Entso-E countries. Both transmission losses and infrastructure costs are compensated within the ITC arrangement. The infrastructure costs cover the capital and maintenance costs of the transmission system. The agreed sum for infrastructure costs, in accordance with the draft ITC guidelines of the European Commission, is 100 million euros in 2010. The sum for transmission loss compensations is of the same level, but the compensation will be determined by the actual losses. All in all, the level of the compensations will be reduced by half from the previous agreement period. The level of the ITC/perimeter fee will be equal to the transmission compensations between parties involved in the arrangement. The new agreement will also influence the pricing of the Russian cross-border transmission service. The ITC/perimeter fee for Russian imports and exports in accordance with the new agreement is 0.7 €/MWh. This is reduced by half from the earlier agreement.