DEPA auction to be held on RAE lower starting price terms

The first annual gas auction will be staged tomorrow based on starting price levels as set by RAE, the Regulatory Authority for Energy, following an unsuccessful appeal by DEPA, the Public Gas Corporation, at the Competition Committee.

The dispute between DEPA and RAE emerged after the gas company established a price for its operational costs, which it then used to set auction starting prices. RAE  questioned some of the costs taken into account, noting that starting prices ought to be at lower levels, as an actual reflection of DEPA’s operating costs.

DEPA included certain additional payments for DEPA personnel working on the auctions, as well as a number of other expenses not taken into account for previous auctions, into the sum of operational costs.

RAE ruled that the inclusion of these additional payments was unnecessary as the auctions are organized by DEPA staff already on the payroll, while also noting that expenses not taken into consideration for previous auctions cannot be included in the gas company’s operational costs.

Although DEPA officials insist on the company’s cost-evaluation approach, the auctions will take place based on the price levels set by RAE.