FAQs on transaction reporting – Question II.3.1.41

I have questions regarding REMIT reporting obligations.

  1. As it is noted in the Fundamental Acts market participants are obliged to report contracts concluded outside organized market but which have defined quantity and price as Standard Contracts with the deadline of one working day. Our questions regarding this type of contracts are as follows:
  • What if the price is defined but quantities are flexible during the contract duration does this mean it should be reported as Standard Contract with deadline of one working day?
  • What if the price is contracted in one currency but denominated and paid by the customer in another currency does this considers as defined price? Example: we have contracts signed with defined fixed prices in EUR but this price changes on monthly basis due to conversion of price from EUR to HRK.

2. What is the deadline for bilateral contracts signed outside the organised market place for sublet of transportation capacity? If we understand it correctly these contracts should be reported within the same deadline as non-standard contracts (this means the deadline is 30 days)?


Answer:

If the price is defined but quantities are flexible during the contract duration, this it is a non-standard contract, unless traded on Organised Market Place. Please see FAQ 1.1.20 for the timeline of reporting.

Based on the information provided above, it is our understanding that if the contract is signed with defined prices in EUR, this is by definition a contract with defined price. This contract should be reported with the price in EUR by both sides of the contract. It is our view that the fact that the contract is registered in another currency in the market participants’ systems, being subject to currency fluctuations, does not change the nature of the contract itself.

Bilateral contracts signed outside the organised market place for sublet of transportation capacity should be reported within the same deadline as non-standard contracts, T+1 month.

RSS_Icon Last update: 26/04/2017  

FAQs on transaction reporting – Question II.3.1.42

Related documents: REMIT Implementing Regulation Art 3.

REMIT requires the reporting of contracts in wholesale energy products to ACER. However, certain transactions may be split into separate ‘legs’ for the purpose of recording the information in market participants systems.  These contracts may have more than one counterparty, relate to more than one product, e.g. LNG and natural gas, contain multiple delivery points and have more than one price setting mechanism.   It should be noted that these ‘legs’ do not represent executions.

To report these ‘legs’ as a single contract it would be necessary to aggregate them together. Aggregation may reduce transparency of the data provided to ACER, particularly if the contract is reported as table 1 as no execution data will be reported.  In addition, it is currently not possible, for all contracts, to aggregate and report the contract as a single message under table 1 due to limitations with the schemas, e.g. different legs may have different transaction details.  Any solution, if possible, will, at best result, in a considerable loss of detail of contract information. Aggregation will also involve considerable effort on the part of market participants in terms of changes required to systems.   This seems inefficient given the small number of such transactions.

Finally, we understand that other market participants face this issue. Therefore, different reporting by CPs may make matching more difficult for ACER, so guidance in this area would be very helpful.

Example: In this example there is only one contract between MP1 and MP2/MP3. However, the contract is booked as a number of different deals in the trading system due to product, locational and pricing factors.  We note that there are no current examples of how to report such a trade within the TRUM.

Legal entity Counterparty No of contracts Deals booked in trading system Product Location Formula
MP1 MP2 1 3 LNG Grain NBP
Bilbao
Huelva Brent
MP2 1 2 NG AOC NBP
NG AOC Brent

 

For table 1 we would prefer to report the individual ‘legs’ of the contract separately and to use the ‘Linked ID’ field generated separately by each market participant for each report to recognise that the reports are related. We would finally note that such contracts only represent a handful of the overall transactions currently undertake.


Answer:

Based on the information provided above, it is our view that each party should report a separate contract by using Table 2. For example, in the case of a tri-party agreement, contracts between MP1 and MP2, and MP1 and MP3 shall be reported by using Table 2 and individual executions after that agreement shall be reported by using Table 1.

Each party should report a separate contract (Table 2), e.g. a tri-party agreement, MP1 with MP2, MP1 with MP3 and individual executions after that.

RSS_Icon Last update: 26/04/2017  

FAQs on transaction reporting – Question II.3.1.43

Reference to documents: TRUM V2 page 18 and Annex II p. 183/184

A colleague reported back that of their PPA providers we are the only one who think there is a monthly reporting requirement. (Executions under a non-standard frame contract reporting according to the billing cycle.)

Another market participant has legal advice and has also received guidance from ACER that it is a one off reporting requirement. Just to report the contract. Furthermore, they got informed that the monthly reporting would kill the ARIS system.

In this context, we have the question if this information is correct? Do we only need to report the frame contract in the non-standard contract and do not need to report the executions (actual volumes) each month (billing cycle)? The same then would apply to all other metered business.


Answer:

It is our understanding that a Power Purchase Agreement (PPA) is a bilateral agreement with defined Pricing, Delivery point and Billing and Payments conditions. Furthermore, it is our understanding that a contract under a PPA is not traded at an organised market place. The contract will be reported under Table 2 and, following the billing, the executions specifying an outright volume and price will be reported no later than 30 days after the invoicing date, using Table 1 of the Annex to Commission Implementing Regulation (EU) No 1348/2014.

RSS_Icon Last update: 26/04/2017  

FAQs on transaction reporting – Question II.3.1.44

As we are going to finalize our RRM registration process, we will be very grateful if you could clarify our doubt as regards the way of transmitting our non-standard contract. We have bilateral contract for the purchase of electricity to cover losses, concluded in result of public procurement. The price and volume is known in the moment of concluding of this agreement. We have prepared both: Table 2 (which we are going to send to ACER once a year) and Table 1 (with executions which we are going to send each month).

In your documentation (TRUM) it is said that non-standard contracts specifying at least an outright volume end price shall be reported using Table 1. Is it mean that we should report only Table 1 or that we should report Table 2 and Table 1.


Answer:

If each transaction has a price and quantity defined prior to the delivery of the electricity, these should be reported as bilateral contracts with Table 1. Please see FAQ 3.1.14.

RSS_Icon Last update: 26/04/2017  

FAQs on transaction reporting – Question II.3.1.45

Our issue is about bilateral contracts signed after a tender procedure. In France, at the end of the contract award procedure, suppliers whose offer was rejected have 11 days to bring an action against the rejection decision. The contracts are signed at the end of this withdrawal period. Under REMIT, standard contracts have to be reported to the agency no later than the working day following the conclusion of the contract. Under REMIT, what is the date of conclusion of the contract that must be retained: the date on which both parties agree on the transaction or the contract signing date (12 days after)?

Example: A tender procedure ends on January 14th, 2016 by awarding the contract to a supplier. On January 14th suppliers who have not been selected are informed of the decision. They can challenge the decision until January 25th, 2016. If there is no dispute, the contract between the buyer and the supplier selected is signed on January 26th, 2016. When do both parties have to report the transaction to the agency (assuming it is a standard contract)?


Answer:

In case of bilateral contracts signed after a tender procedure the contract signing date should be considered as the date of the contract.

RSS_Icon Last update: 26/04/2017  

FAQs on transaction reporting – Question II.3.1.46

I’m responsible for the obligations regarding REMIT at a German energy service supplier and I have a question regarding the allocation of subordinate balancing groups of our clients to our company’s invoicing balancing group.

Those clients may fix forward transactions (specified amount and price) for certain periods in the future. Furthermore those clients can make such transactions with third parties agreeing upon delivery into our company’s invoicing balancing group. The subordinated balancing groups will then be equalized by our company’s invoicing balancing group. In cases clients did not fix forward transactions with neither party subordinated balancing groups’ consumption will be cleared using Day Ahead prices (/ Daily reference prices for Gas).

It is my understanding that it will be sufficient if both (clients and we) will report the contracts governing the balancing group management between us and client to ACER and will then for each delivery period (every month) notify ACER about the monthly measured consumption rated at the average price resulting from the transactions as described above. The forward transactions fixed with third parties will have to be reported to ACER by our clients and their trading partners directly.


Answer:

In our view, when market participants fix forward transactions (price and volume) prior to the delivery of the gas or electricity these transaction should be considered as bilateral contracts. Please see FAQ 3.1.14.

For those transactions where market participants did not fix forward transactions and their consumption will be cleared using Day Ahead prices these should be reported with Table 1 as EXECUTIONS under the framework of non-standard contracts reported with Table 2.

If market participants have a non-standard contract with some flexibility/optionality and the opportunity to also fix the price and quantity ahead of the delivery period they should report Table 2 for the non-standard contract, forward trades with fix price and volume within Table 1 and EXECUTIONS for those transaction where the price and quantity was not fixed. Please see FAQ 3.1.28.

RSS_Icon Last update: 26/04/2017  

FAQs on transaction reporting – Question II.3.1.47

If we purchase a power schedule (every single hour has another quantity) we ask ourselves, if it’s necessary to report the load profile?

For example: Reporting 8760 single hours, and 35.040 quarter-hour, respectively? Or not?

In our view, we are unsafe, how to report an power schedule. The documents are unequivocal and in this case ambiguous.


Answer:

If transactions with a load profile have different quantity and price for each time interval, each time interval should be reported within the report. If a shaped transaction has 365 * 24 * 4 = 35040 quarterly hour values, all of them should be reported.

RSS_Icon Last update: 26/04/2017  

FAQs on transaction reporting – Question II.3.1.48

XXX is considering to supply (i.e. sell) liquefied natural gas (LNG) to wholesale customers by means of LNG trucks. For this purpose, XXX will enter into one or more LNG sales agreements with one or more wholesale customers.

Do the above-mentioned LNG sales agreements between XXX and its wholesale customers qualify as transactions which are required to be reported to ACER in accordance with Article 8(1) of REMIT in conjunction with Article 3 of REMIT Implementing Regulation (EU) No 1348/2014?

Example: XXX will transport and deliver the LNG sold under such agreements to these wholesale customers by means of LNG trucks (i.e. in trucks that are suitable for the transportation of certain volumes of LNG).

Please note that the delivery point is neither the truck loading facility nor the fuelling station but it is potentially any physical point between the truck loading facility and the flange of the unloading facility where the LNG has to be delivered (and possibly re-gasified) on behalf of the wholesale customer.

As already expressed by ACER in the FAQs on fundamental data and inside information document (Q. 3.2.2) “LNG truck loading is out of scope for reporting fundamental data reporting. For the same reason, the Agency believes that transaction for the supply to LNG trucks are non-reportable.”

Given that, in our opinion it is not entirely clear, reason for which we are asking a further clarification, what “supply to LNG trucks” means exactly in this context (supply to trucks might mean from storage to truck or from a fuelling station to an LNG powered truck).

In our opinion any transaction where LNG is delivered either “to truck” or “by truck” or “in truck” has not to be reported.


Answer:

In the FAQs on transaction reporting document (Question II.3.1.26) it is written:

“The Agency has already clarified in the FAQs on fundamental data and inside information document (Q. 3.2.2) that LNG truck loading is out of scope for reporting fundamental data reporting.

For the same reason, the Agency believes that transaction for the supply to LNG trucks are non-reportable.” 

Please note that this answer only addresses the “loading” of LNG trucks issue raised in Question 3.1.26:

“Downstream LNG transactions, for example LNG truck loading and LNG marine fuel deliveries. These transactions are in scope as they are understood to take place at or after the entry flange of an EU LNG regasification terminal. Similar guidance to pipeline gas applies for reporting.”

However, the case described in Question II.3.1.26 is different than the one described in the above question.

In general, if the LNG is sold to a truck, it may not be reportable – see Question II.3.1.26. However, if the LNG is sold from the truck to any system connected to the network (e.g. National Transmission System, Distribution Network, LNG facility, storage etc.), then the contract would be reportable.

In any case when the contract counterparties are already REMIT market participants and if there are any doubts regarding the reporting, we would recommend to report the transaction, even if the other counterparty would not do so.

In this case the reporting market participant(s) would not take the risk of not reporting a reportable contract according to REMIT. The EIC for the destination delivery point (or the National Transmission System, Distribution Network, LNG facility, storage etc. connected to) can be reported in this case.

RSS_Icon Last update: 08/12/2017  

FAQs on transaction reporting – Question II.3.1.49

What constitutes “delivery” for the purposes of REMIT? We are particularly interested in what constitutes the delivery in the context of LNG supplies.

According to ACER’s Q&A (III.3.36), “ACER considers any importation or offloading of LNG in any LNG facility (including flanges that connect the LNG vessel to the LNG terminal) in the EU as delivery in the Union as far as the delivery of the product takes place in the European Union“. This suggests that “delivery” means the physical delivery of the product.

However, in FAQ #3.1.21, ACER states that “in the Agency’s view contracts for the supply of LNG before the entry flange of an EU LNG regasification terminal, for example an exchange of title on the high seas outside the EU, are not subject to transaction reporting“. This suggests that title transfer constitutes delivery of the product.

We note that Incoterms definitions, which are commonly used in the LNG sector, of delivery relate to the physical delivery / transfer of risk and are silent on transfer of title, separating the concept of delivery into two. For example,

In a DES transaction “delivery” occurs at the time when the goods are placed at the disposal of the buyer on board the vessel at the named port of destination in such a way as to enable them to be removed from the vessel by the buyer. At the point of delivery, the risks transfer from the seller to the buyer. In a DES scenario, delivery is tied to the physical delivery / transfer of risk, and not to the transfer of title; and

In an FOB transaction, “delivery” occurs at the time when the goods are on board the vessel at the named port of shipment (i.e. the location where the LNG is passed over the ship’s rail). At the point of delivery, the risks transfer from the seller to the buyer. Again, in an FOB scenario, delivery is tied to the physical delivery / transfer of risk, and not to the transfer of title.

Does REMIT distinguish between the physical delivery of LNG into the EU and the transfer of title to the LNG?

Example 1:

A contract for the supply of LNG has the following characteristics:

transfer of title between the buyer and the seller happens in international waters; and after the title is transferred to the buyer, the seller delivers on a DES basis to the flange of an EU regasification terminal.

Is this contract subject to REMIT? Does the seller have to register as a market participant / report this transaction?

Example 2:

A contract for the supply of LNG has the following characteristics:

the seller delivers the goods on an FOB basis; the named port of shipment is outside of the EU; and transfer of title to the goods happens in the EU.

Is this contract subject to REMIT? Does the seller have to register as a market participant / report this transaction?


Answer:

In the Agency’s view, REMIT does not distinguish between the physical delivery of LNG into the EU and the transfer of title to the LNG. We believe that market participants know where the delivery takes place and they should be able to derive their own conclusions.

In addition, whenever market participants (MP) may have any doubts about the delivery point, we would recommend (MP A) to report the transaction in any case, even if the other counterparty (MP B) would not agree with (MP A). In this case (MP A) would not take the risk of not reporting a reportable contract according to REMIT. The EIC for the destination delivery point can be reported in this case.

We also recommend market participants to read Questions 3.1.21, 3.1.22, 3.1.23 and 3.1.24 of the FAQs on transaction reporting document which, in the Agency’s view, would help to understand the scope of LNG contracts under REMIT.

RSS_Icon Last update: 08/12/2017  

FAQs on transaction reporting – Question II.3.1.50

There is a type of transaction that occurs in the UK (and perhaps elsewhere) referred to Gas-Retro-Deals. These are physical trades executed after the gas day at beach terminals. Shippers are incentivised to enter into such deals on occasion to reduce transportation costs or imbalances. These are done after delivery but before settlement. Therefore, they would have a timestamp after the delivery start date.

We do not believe an example is required here but if it necessary, please let me know.

We believe that Gas-Retro-Deals fall within the scope of ‘…day after markets.’ We believe this is a common understanding amongst industry participants who trade such contracts. We would appreciate confirmation from ACER on this interpretation. In addition, any other guidance ACER would like to provide at the same time on the reporting of such contracts would also be helpful.


Answer:

[UPDATED] based on additional input provided by the Agency’s stakeholders

In the Agency’s view, a balancing trade is a contract between a party and a System Operator (SO), in most cases TSO, who is in charge of keeping the energy in the network/system (either gas or electricity) in balance.

It is our understanding that in “…day after markets”, and any other retro-deal market, [added] where an SO or TSO is not involved, market participants balance/adjust their positions with other market participants. If this is the case, these contracts should be reported by both parties as wholesale energy products.

In the Agency’s view, balancing trades are well defined in Articles (2)9 to (2)11 of COMMISSION IMPLEMENTING REGULATION (EU) No 1348/2014, in the sense that they are related to balancing energy and services:

(9) ‘balancing energy’ means energy used by TSOs to perform balancing;

(10) ‘balancing capacity (reserves)’ means the contracted reserve capacity;

(11) ‘balancing services’ means

  • for electricity: either or both balancing capacity and balancing energy;
  • for natural gas: a service provided to a TSO via a contract for gas required to meet short term fluctuations in gas demand or supply.

In addition, whenever market participants (MP) may have any doubts about the delivery point, we would recommend (MP A) to report the transaction in any case, even if the other counterparty (MP B) would not agree with (MP A). In this case (MP A) would not take the risk of not reporting a reportable contract according to REMIT. The EIC for the destination delivery point can be reported in this case.

We also recommend market participants to read Questions 3.1.21, 3.1.22, 3.1.23 and 3.1.24 of the FAQs on transaction reporting document which, in the Agency’s view, would help to understand the scope of LNG contracts under REMIT.

RSS_Icon Last update: 20/07/2018  

RSS_Icon Subscribe to this Category’s RSS