29 July 2016

Tokyo Gas Applies for Authorization of "Transmission Service Agreement"

Corporate Communications Dept.

Tokyo Gas Co., Ltd.

Tokyo Gas Co., Ltd. (Head office: Minato-ku, Tokyo; President: Mr. Michiaki Hirose, "Tokyo Gas") has submitted an application to the Minister of Economy, Trade and Industry for authorization of "transmission service agreement" (hereinafter referred to as "Agreement") prescribed in Article 48 Paragraph 1 of the Gas Business Act (5th revision), pursuant to Article 18 Paragraph 1 of this Act*1.

The "Agreement" is provisions which prescribe the tariffs and other supply conditions in cases where businesses newly participating in gas sales and other gas retailers aside from Tokyo Gas use the gas pipelines and facilities of Tokyo Gas. The present transmission service agreement has been revised to reflect the revisions of various laws toward the full liberalization of the gas retail market to be implemented on April 2017 as well as the contents of deliberations at national councils*2.

The main contents of the revisions are as follows.

  1. Establishment of new transmission service tariff ("Standard Transmission Service Tariffs")

    To date, transmission service tariffs have not been set for customers receiving gas supply with an annual consumption volume of less than 100,000m3 per year. Transmission service tariffs for small-volume customers are now being established because they will also become subject to liberalization with the full liberalization of the retail gas market from April 2017.

    In addition, Transmission service tariffs for large-volume*3 customers receiving gas supply are revised to reflect the revisions of the items of costs in estimating the transmission service tariff.

  2. Establishment of discount tariff ("Optional Agreement")

At the same time, for the customers of using the gas pipeline facilities effectively, for example, that installed the co-generation system, the "Optional Agreement" that discount from the "Standard Transmission Service Tariffs" are now being established.

Under the application, the transmission service tariff is an average of ¥21.89 per m3 (in the supply area, "Tokyo district etc.")

The "transmission service agreement" for which the application for authorization was submitted today is scheduled to be implemented from 1 April 2017, following authorization by the Ministry of Economic, Trade and Industry.

*1 upplementary Provisions of the Act on Partial Revision to the Electricity Business Act, Etc. (enacted on June 24, 2015).

*2 National councils include the Gas System Reform Subcommittee of the Strategic Policy Committee of the Advisory Committee for Natural Resources and Energy.

*3 By the end of March, 2017, it will become possible for customers with an annual consumption volume of 100,000m3 (46MJ) or more to conclude contracts through large-volume supply.

In the areas where Tokyo Gas supplies 45MJ gas ("Tokyo district etc." and "Gunma district etc. "), the volume will be 102,223m3 or more, and in the areas where Tokyo Gas supplies 38.51166MJ gas ("Yotsukaido 12A district"), the volume will be 106,630m3 or more.

Appendix

■Tariff table

1.Standard transmission service tariff(Type1)[tax-exclusive]

Tokyo District etc.

(45MJ)

Gunma District etc.

(45MJ)

Yotsukaidou12A District

(38.51166MJ)

Type1

Tokyo District etc.:0m3~20m

Gunma District etc.:0m3~24m Yotsukaidou12A District:0m3~20m

Fixed tariff

Standing

/contract

/month

103.50

103.50

103.50

Unit tariff

/m

57.20

99.87

89.61

Tokyo District etc.:20m~80m

Gunma District etc.:24m3~500m Yotsukaidou12A District:20m3~200m

Fixed tariff

Standing

/contract

/month

144.10

1,001.40

721.10

Unit tariff

/m

55.17

62.46

58.73

Tokyo District etc.:80m3~200m

Gunma District etc.:500m3~ Yotsukaidou12A District:200m3~

Fixed tariff

Standing

/contract

/month

952.10

5,881.40

2,639.10

Unit tariff

/m

45.07

52.70

49.14

Tokyo District etc.:200m3~500m

Fixed tariff

Standing

/contract

/month

1,462.10

Unit tariff

/m

42.52

Tokyo District etc.:500m3~800m

Fixed tariff

Standing

/contract

/month

4,862.10

Unit tariff

/m

35.72

Tokyo District etc.:800m

Fixed tariff

Standing

/contract

/month

9,622.10

Unit tariff

/m

29.77

2.Standard transmission service tariff(Type2)[tax-exclusive]

Tokyo District etc.

(45MJ)

Gunma District etc.

(45MJ)

Yotsukaidou12A District

(38.51166MJ)

Type2

No.3

Fixed tariff

Standing

/contract

/month

43,070.00

46,100.00

24,170.00

Flow rate

/m/month

675.00

719.74

159.00

Unit tariff

Winter

/m

4.62

23.88

6.00

Other seasons

/m

3.85

19.90

5.00

No.2

Fixed tariff

Standing

/contract

/month

105,840.00

79,600.00

Flow rate

/m/month

675.00

719.74

Unit tariff

Winter

/m

2.94

23.04

Other seasons

/m

2.45

19.20

No.1

Fixed tariff

Standing

/contract

/month

227,570.00

141,600.00

Flow rate

/m/month

675.00

719.74

Unit tariff

Winter

/m

2.16

22.68

Other seasons

/m

1.80

18.90

Amount added for low pressure

Additional unit tariff

/m

1.97

3.13

3.Optional Agreement[tax-exclusive]

Tokyo District etc.

(45MJ)

Gunma District etc.

(45MJ)

Yotsukaidou12A District

(38.51166MJ)

Type1

Discount for small type cogeneration system package

Discount

/m

3.50

3.50

3.00

Discount upper limit

/month

700.00

700.00

700.00

Discount for cogeneration system only

Discount

/m

6.50

Discount upper limit

/month

16,000.00

Type2

No.3 No.2 No.1

Discount for cogeneration system only

Discount

/m

2.00

Discount upper limit

/month

300,000.00

Appendix 2

Outline of the "Transmission Service Agreement"

1.Preconditions for estimating the tariff for Transmission Service

Period for the calculation

Gas volume

Rate of fair return

FY2017~FY2019

13.5 BCM

2.18%

(note) ・The gas volume is estimated based on the Supply Plan.

・The ratio of fair return is calculated subject to the relevant law.

2.The costs taking into account at the estimation of the tariff

  • As the estimation, we take into account the costs for required check, maintenance, repairs and replacements for the gas transmission facilities to secure stable and safe gas supply and the amortization expense for the construction for new pipelines to meet the increasing demand.

・We also estimate the costs taking into account the reflection of Gas Market Reform including the required costs for the sales activities contributing to the installation of new pipelines for new customers and the operation to keep our gas supply stable.

・At the same time, we also take into account the impact of the assumed cost saving including the promotion to seek competing bids for the purchases of maximally. As the result, the amounts of the costs were estimated 295.9 billion yen as the costs in the supply area of "Tokyo district etc." (the average of 3 years (FY2017 to 2019)).

【Contents(Tokyo district etc.)】 (Unit:100 million yen)

Estimated cost

(application)

reference

Network cost

subject to yardstick assessment

1,057

Total of Personnel expenses、General expenses

(except for "cost related to facilities" and "taxes and dues")and General and administrative expenses

Cost related to facilities

Depreciation &

amortization

919

Repair costs

321

Loss on retirement of property, plant and equipment

186

Fair return

139

Taxes and dues

327

Other expenses・Allowable profit

-87

Cost for supply and demand

adjustment

30

Total of cost for adjustment and transfer

Cost for market research and development

68

Total of cost for market research and market development

Total

2,959

Tokyo Gas Co. Ltd. published this content on 29 July 2016 and is solely responsible for the information contained herein.
Distributed by Public, unedited and unaltered, on 29 July 2016 05:47:12 UTC.

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