Definition of conversion neutrality account items:
Account balance at the beginning of the month
The “Account balance at the beginning of the month” equals the balance of the conversion neutrality account at the end of the previous month.
Costs/revenues from conversion measures
The “Costs/revenues from conversion measures” column shows the total of the costs and revenues we incur or earn in connection with our commercial conversion measures, the costs we incur for gas imports and exports we carry out for conversion purposes and the costs we incur for technical conversion measures insofar as these are not already included in network operators’ transportation tariffs.
Our commercial conversion costs/revenues are derived from three major cost pools. Other than our commodity costs (e.g. EEX) and a proportion of our availability contract or other long-term balancing costs (capacity charges for Flexibility Services, Long-Term Options and transportation capacity) these also include a proportion of the commodity charges we pay for use of our contracted Flexibility Services.
All conversion costs are determined on a daily basis. The allocation key we use to charge Flexibility Service costs to the conversion neutrality account is calculated as the average of all days falling within the relevant period, as agreed with the Federal Network Agency.
“Interest expenditure and income” relating to our conversion neutrality account
The costs shown in the “Other expenditure” column include any expenditure that is not covered by the other account items (e.g. costs for conversion-related studies commissioned by us).
Amounts distributed to BGMs
The “Amounts distributed to BGMs” column shows the amounts (if any) we pay to balancing group managers from funds accrued in the conversion neutrality account for validity periods in which a surplus was generated (referred to as a “surplus period”).
Revenues from conversion fee payments
GASPOOL charges a conversion fee for the conversion of gas from high CV to low CV quality (in accordance with the administrative ruling governing the gas quality conversion mechanism in multi-quality gas market areas handed down by the Federal Network Agency on 21 December 2016, ref: BK7-16-050). The “Revenues from conversion fee payments” shown here are determined on this basis.
Revenues from conversion neutrality charges
GASPOOL levies a conversion neutrality charge on all physical inputs delivered to the market area (in accordance with the administrative ruling governing the gas quality conversion mechanism in multi-quality gas market areas handed down by the Federal Network Agency on 21 December 2016, ref: BK7-16-050). The “Revenues from conversion neutrality charges” shown here are determined on this basis.
Balance for the month
The “Balance for the month” is calculated from all relevant monthly revenue and expenditure items according to the KONNi Gas ruling as they are recorded in our accounts:
- costs/revenues from conversion measures,
- interest income and expenditure,
- other expenditure,
- amounts distributed to BGMs,
- revenues from conversion fee payments,
- revenues from conversion neutrality charges
Account balance at the end of the month
The “Account balance at the end of the month” is calculated as the sum of the “Account balance at the beginning of the month” and the “Balance for the month” as determined for the relevant month.
Required liquidity buffer
The “Required liquidity buffer” is a tool that helps us manage the uncertainty inherent to projections and to deal with unexpected situations. The amount to be taken into account as a liquidity buffer must be set so as to prevent large differences between the conversion neutrality charges applied in consecutive conversion periods whilst ensuring that sufficient financial resources are available to avoid any changes to the applicable conversion fee during the course of a validity period. This liquidity buffer is determined initially at the beginning of each validity period when we set the conversion fee and conversion neutrality charge to be applied during the relevant validity period, and is reviewed regularly.
Computational difference between account balance and required liquidity buffer
The “Computational difference between account balance and required liquidity buffer” is calculated as the difference between the “Account balance at the end of the month” and the “Required liquidity buffer”.
Available liquidity buffer
If the balance of the conversion neutrality account is positive, the “Available liquidity buffer” equals the “Account balance at the end of the month”; else it is zero. So the “Available liquidity buffer” can never be a negative amount.