The new Swedish Regulation of Power Distribution System Tariffs : A Description and an Initial Evaluation on its Risk and Asset Management Incentives

• From 2012, a new tariff regulation has been introduced in Sweden. A reasonable revenue framework for the distribution system operators (DSOs) is determined before the regulatory period of four years. The aim of this paper is to overall describe the new regulation, especially reliability aspects, including an approach to superficially perform an initial investigation/evaluation on its incentives of risk and asset management. A recently performed M.Sc. thesis by one of the authors shows that the new regulatory method has a great impact on project planning. For example introducing more components is “rewarded”, while demolish old components is “punished”. The DSOs send a proposition to the Energy Markets Inspectorate (EI), who decides whether the suggested frame work is reasonable. The evaluations of the proposed revenue framework is performed by a template method, where EI calculates the reasonable total costs and fair return on capital, with the aim of taking objective prerequisites for the specific DSO into account. After the regulatory period, the DSO’s actual revenue is investigated; if this revenue differs from predetermined levels, the framework will, for the next regulatory period, be reduced or increased.

Subject headings

TEKNIK OCH TEKNOLOGIER  -- Elektroteknik och elektronik (hsv//swe)

ENGINEERING AND TECHNOLOGY  -- Electrical Engineering, Electronic Engineering, Information Engineering (hsv//eng)

Publication and Content Type

ref (subject category)

kon (subject category)