Audit report on GDF Suez's supply costs and non-supply related costs in natural gas regulated sale tariffs - May 2014

After having recalled the legal context of objectives of this audit performed by the French Commission for Energy Regulation (CRE), this report proposes an analysis of GDF Suez's dissociated accounting which showed that costs are covered by natural gas regulated sale tariffs. In the second part, it comments the current market indexing used in tariff formula, comments current and present negotiations and their consequences for the market indexing share in long term contracts, discusses the issue of tariff volatility related to an increased market indexing share, discusses the possible re-examination of indices at the occasion of formula reviewing, and outlines that the diversified supplier portfolio allows optimisation operations. The third part addresses non-supply related costs: evolution of different infrastructure costs (related to distribution, transport, and storage) to be taken into account in regulated sale tariffs, evolution of commercial costs. Some recommendations are then made regarding the perspective of a tariff formula revision, and the perspectives of evolution of non-supply related costs