Cross-Border Cost Allocation
Ensuring an efficient sharing of costs between countries
The Regulation on guidelines for trans-European energy infrastructure enables promoters of Projects of Common Interest (PCI) to submit their investment requests, including a request for cross-border cost allocation (CBCA), to the relevant national regulatory authority (NRA).
CBCA decisions establish the sharing of the efficient investment costs of a PCI between the countries which are significantly impacted by the projects. NRAs jointly scrutinise the investment requests and determine which countries will contribute to financing them, and in which proportion. Cost sharing agreements may facilitate the implementation of PCIs if the territorial distribution of benefits and costs is not well aligned.
Cross-Border Cost Allocation
What's the role of ACER?
In case no agreement on the investment request is reached by the concerned NRAs after a 6-month period, or upon joint request by the NRAs, ACER decides on the investment request and the cost allocation.
ACER Decisions:
On 11 August 2014, ACER adopted its Decision on the investment request including CBCA for GIPL - the gas interconnection Poland-Lithuania.
On 16 April 2015 ACER adopted its Decision on the investment request including CBCA for the Lithuanian part of LitPol Link - the electricity interconnection between Lithuania-Poland.
List of decisions (November 2021, 45 decisions)
CBCA guidelines:
To facilitate the CBCA processes, ACER issued its Recommendations on CBCA, providing guidance to project promoters on the submission of an investment request, as well as to NRAs on their assessment and the allocation of costs across the Member States. The Recommendation also details the reporting requirements of project promoters towards NRAs and TSOs of the relevant Member States.
CBCA monitoring:
ACER continuously monitors the investment requests for electricity and gas PCIs submitted by the promoters and the decisions taken. The CBCA instrument has been widely used and with the exception of two cases the NRAs have always reached an agreement on the on the cost allocation, without transferring any case to ACER for a decision. However, ACER finds that the vast majority of the CBCA decisions follow the “traditional principles" for allocating costs (i.e. without setting cross-border payments).
The ACER-CEER Position on the Revision of the TEN-E Regulation and infrastructure governance reflects proposed to improve the relationship between the CBCA and other instruments used to support the implementation of PCIs, such as the Connecting Europe Facility.
Cross-Border Cost Allocation
Practical information
For NRAs:
NRAs should inform ACER about investment requests and CBCA decisions without delay and share the relevant documents and any update on the treatment of the investment requests (see Section 2.11).
For promoters:
The guidance on the submission of an investment request for project promoters (Chapter 1) is accompanied by a template (Annex IV) summarising all relevant information.