Methodology determination on the return on capital
Proceedings for the determination of methods for calculating a standardised rate of return on capital [GBK-25-02-3#1]
The Bundesnetzagentur’s Grand Ruling Chamber for Energy has opened proceedings for a determination on methods for calculating a standardised rate of return on capital in accordance with section 29(1) in conjunction with section 21(3) sentence 4 para 1 of the Energy Industry Act (EnWG). The proceedings were opened on 16 January 2025 [GBK-25-02-3#1].
The responsibility of the Grand Ruling Chamber derives from section 59(3) sentence 3 in conjunction with section 21 EnWG.
The aim of the determination is to set the gearing ratios for imputed equity and debt within a weighted average cost of capital (WACC) method and to lay down and describe methods for calculating the cost of equity and cost of debt using a WACC method.
The Bundesnetzagentur presented and discussed with stakeholders its initial thoughts on the possible design of the methodology in three open expert workshops held on 8 July 2024, 21 October 2024 and 5 February 2025. The agendas, presentations and chat messages from the three workshops are available here, here and here.
Commissioned report
In order to take adequate account of the latest scientific findings, the Bundesnetzagentur put out a tender for a report in which the fundamental questions relating to the methodology for calculating the cost of capital from the fifth regulatory period onwards were to be scientifically examined.
The tender was awarded to Frontier Economics together with Professor Zechner and Professor Randl. The report (dated 13 January 2025) and the Bundesnetzagentur’s preliminary assessment of the findings from the report are available here:
Report by Frontier, Randl, Zechner (in German)
Preliminary assessment of the report
The Bundesnetzagentur is giving sector stakeholders the opportunity to comment on the report produced by Frontier Economics and on the Bundesnetzagentur’s preliminary assessment until
28 February 2025 (date of receipt).
This is not a formal consultation. A formal consultation process will be held for the final draft determination at a later stage. There will also be an opportunity to comment on the report during the consultation process for the methodology determination. The responses submitted will be published. If your response contains trade and business secrets, please mark your response accordingly and submit an additional version with the confidential information blacked out. There is no specific form to be used for responses. Please add the name of your company/organisation to the file name and send your response to gbk@bnetza.de in an email marked “GBK-25-02-3#1; name of your company/organisation”.
GBK-25-02-3#1