June 1st, 2006




Results of the Public Consultation Procedure launched on 19th May 2006 for the Tender "Long Run Marginal Costs (LRMC) of generation, transmission and distribution in the electricity sector of Greece "



The deliberation process initiated within the framework of the above noted Tender, resulted in the following comments/questions:


1.         Is it acceptable for the project deliverables to be submitted in English?

2.         Sections 2.2.4 a. and b call for optimization tools for generation, transmission and distribution planning. Are annual licensing fees for third-party models considered a part of the consultant's budget for this project?

4.         Section 2.2.3 discusses consumer load profiles per customer category which are required for the analysis. For what years and in what detail (e.g. hourly, by geographic area) are consumer load profiles available from the regulated power utilities for current consumer categories?

5.         Section 2.2.3 requires additional information on customers. Is information available on: (1) number of customers in each current category and geographic area (e.g., urban, semi-urban, rural); (2) number and size of customers connected at each voltage level; (3) number and electricity demand characteristics of non-residential customers by industry (e.g., manufacturing, tourism, agriculture); (4) price elasticity of demand and responsiveness to time-of-use pricing?

6.         For use in the transmission and distribution optimization model(s), is detailed information available on capacity and loads (by time period) for each node?

7.         The fourth objective listed in section 2.1 is "devise a mechanism for the electricity tariff adjustment that should be flexible and adaptable to the changing fuel and electricity prices under the competitive market." Please clarify whether this adjustment mechanism is to address only generation (supply) costs, or also deal with the tariff adjustment process more generally.

8.         How many countries will be included in the “further analysis of pricing policy and tariffs” (in 2.2.1)?

9.         When will the tariffs to be proposed by the regulated utilities be available to the consultants? (part of Phase B, 2.2.9)

10.       Section 2.1(3)c lists as an objective of the project: "The financial status of the regulated power utilities must be secured in order to ensure their viability and enable future expansion of their operations." This objective seems to focus primarily on level of tariffs, rather than on marginal costs or tariff structures. Are we correct in assuming that determining an appropriate revenue requirement for the regulated utilities is not part of this project? Or does RAE intend to use the results of the long-run marginal cost study to set the revenue requirements for the regulated power utilities?

11.       Section 2.2.5 indicates that long-run marginal costs will be estimated for a variety of scenarios. How many scenarios will be required and who will identify the assumptions in those scenarios (the consultant or RAE)? Will a single scenario be chosen for use in the rate structure and efficiency/demand-response cost-benefit analyses? Or will these tasks be performed using multiple marginal cost scenarios? If so, how many?

12.       Are the efficient tariffs developed for each consumer category in Phase B (2.2.9) intended to produce an independently-determined revenue level, or just produce marginal cost revenue?