Main factors of the pricing framework

End of regulatory
period

• 31 December 2013

• 30 September 2012

• 31 December 2014

• 31 December 2012

Calculation of net
invested capital
recognised for regulatory
purposes (RAB)

• Revalued historical cost

• Revalued historical cost

• Revalued historical cost

• Deduction of restoration
costs recognised

• Revalued historical cost

• Parametric method for centralised assets

Return on net invested
capital recognised
for regulatory purposes
(pre-tax WACC)

• 6.4% (transportation)

• 6.9% (metering)

• 7.6%

• 6.7%

• 7.6% (distribution)

• 8% (metering)

Incentives on new
investments

• 1% over 5 years
(on safety investments)

• 2% over 7/10 years
(on capacity upgrade
investments)

• 3% over 10/15 years
(on entry capacity
upgrade investments)

• 2% over 8 years
(on expanding existing
terminals by less
than 30%)

• 3% over 16 years
(on expanding existing
terminals by more
than 30%)

• 4% over 8 years
(on upgrading
existing capacity)

• 4% over 16 years
(on developing new
storage fields)

• 2% over 8 years
(on replacing cast-iron
pipes and renovating
odorisation systems)

Efficiency factor
(X FACTOR)

• 2.1% on operating costs

• 0.5% on operating costs

• 0.6% on operating costs

• 3.2% on distribution
operating costs

• 3.6% on metering
operating costs

Gas demand

• 15% of revenues exposed
to change in demand

• 10% of revenues exposed
to change in demand

• No exposure to change
in demand

• No exposure to change
in demand