sou · GVB399 · 2008-01-01 00:00:00 — The revenue frame shall be calculated so that it covers reasonable costs for running the network operations and gives a reasonable return on the capital that is needed in order to run the operations (capital base). The basic starting point in the calculation of network com- panies capital bases shall be the companies existing electricity net- works, for example in the form of cables, transformer stations, etc. and other assets that are used in network operations. Calculation of age-adjusted present acquisition value The valuation of network companies electricity networks prior to the first supervisory period shall take place on the basis of a so- called age-related present acquisition value. The present acquisition value for the electricity network shall according to the principal ruling be calculated with the aid of standard costs. The term stan- dard costs is understood to mean the average cost of investing in similar assets under similar objective conditions. If there are special reasons, however, the investment may exceed the standard costs, for instance in the case of investments in metropolitan and archi- pelago environments where the costs clearly exceed the standard costs. After this, an age deduction shall be made. The network companies do not today have comprehensive information on the age of the different components in the network. This applies above all to older components. Furthermore, age determination is com- plicated by the fact that new investments in, for example, a trans- former station have been made on an ongoing basis and the ques- tion then arises as to what age the station really is. The Commis- sion purposes, therefore, and primarily for administrative reasons, that a lowest level for age determination should be introduced – a so-called capital base floor. In practice, this floor corresponds to an assumption on what the average age, or remaining lifetime, of the electricity network amounts to. If a network company has an elec- tricity network that is older than the assumed average age, no in- formation on the age of the network needs to be submitted. There is very limited information available on how old the electricity networks in are, and it is thus difficult for the Commission to assess with any great precision the average age of the networks. However, the Commission has considered it suitable to set the capital base floor at 50 per cent of the present acquisition value. If a network company judges that its electricity network is younger that the assumed average age, it is possible for the com- pany to submit information to the Inspectorate which shows this to be the case. This means that the company has to make an age inventory of its entire network. In this inventory the network should be divided up into suitable types of components. The Commission proposes that a floor should also be introduced at component level, a so-called component floor. This floor shall be applied when a network company wishes to show that their net- work is younger than the capital base floor. But when for a certain type of component it is not possible to arrive at an average age, the Commission feels that an age deduction in these cases shall be made with 80 per cent of the present acquisition value for those components whose age cannot be determined. The model described above for an initial valuation concerns the electricity network. As far as other property is concerned, such as IT systems, cars, etc., the Commission proposes that it should normally be possible for the book value to be applied as a valuation method. If special reasons exist, it should be possible for the valua- tion to be made in some other way. Development of the capital base over time The valuation of the capital base described above will only be made before the first supervisory period. Subsequently, the Commission proposes that investments be made on an ongoing basis to the capital base and depreciation deducted. In practice, this will be done by the network company, prior to a new supervisory period, registering those investments it intends to make during the period. The principal ruling in the Commissions proposal is that the in- vestments shall be calculated on the basis of standard costs. How- ever, if there are special reasons, the investment shall be permitted to exceed these costs. This could be the case, for example, in con- nection with bad weather or accidents when major efforts are nec- essary in order rapidly to repair and replace damaged installations or for investments in metropolitan and archipelago environments, where the costs may clearly exceed the standard costs. According to the Commissions proposal, it is in principle the network companies themselves who will have to determine what investments should be made and which equipment should be used. If an investment is clearly unnecessary in order to maintain a se- cure, reliable and effective cable network, it should, however, be possible for the Inspectorate to decide that the investment shall not be or partially added to the capital base. An important exception to the principle that the investments should be calculated according to standard costs is that the Gov- ernment or, with the Governments authorisation, the Inspectorate should be entitled to issue regulations to the effect that invest- ments up to a certain level may exceed the standard costs. The rea- son for this proposal is that the network company, at least to start with, shall have the opportunity to make so-called reinvestments without the Inspectorate needing to go in and scrutinise the costs for each individual investment. The Commission proposes that investments should refer to both general investments out in the network as well as to cus- tomer-specific network connections. Consequently, costs for net- work connections according to the main principle shall also be cal- culated with the aid of standard costs. The Commission proposes that the Energy Markets Inspector- ate should be authorised to issue regulations on methods for how depreciation is to be calculated. This may, for example, concern depreciation periods and choice of methods for capital cost calcu- The Commission feels – in view of the choice of an age-ad- justed present acquisition value – that is natural to use a nominal linear method. In addition, a model of this type is relatively simple to apply and understand. However, the fact cannot be ignored that another model at a later stage could be considered more suitable. The Commission proposes that a network company should be en- titled to a reasonable return on the capital base set by the Energy Markets Inspectorate. The return shall be calculated on the basis of accepted economic methods. The Commission feels that the method which is today used by the Energy Markets Inspectorate, the so-called WACC method, should continue to be used in the new model in order to calculate a reasonable return. However, the Commissions proposal does not prevent the Inspectorate from applying another accepted economic method. Current expenses during the supervisory period As specified above, the Commission proposes that the revenue frame should be calculated so that it covers reasonable costs for conducting network operations. Reasonable costs for conducting network operations shall be considered to be costs for a purpose- oriented and effective operation of a network activity with similar objective preconditions. The type of costs that the network companies can influence should be included in the of the revenue frame after any efficiency adjustments have been made by the Energy Markets Inspectorate. The Commission proposes that the Energy Markets Inspectorate should work out and apply one or more efficiency models or cost standards with the aim of promoting the efficient running of network operations. The type of costs that the network companies cannot influence should be accepted in their entirety. In the opinion of the Commission, the real costs for network losses should – at least to start with – also be accepted in their entirety even if the volume of losses, at least in the longer term, can be partly influenced. The Commission proposes that costs for power outage compensation should not be included in the calculation of revenue frames. Revenue during the supervisory period Those revenues that should be included and checked against the revenue frame should be the revenues that the network company has earned on network operations during the supervisory period. If there is a large and perhaps unexpected connection that generates a major one-off revenue for the network company, it could lead to the established revenue frame being exceeded. For the network company it is then a matter of balancing this one-off revenue against somewhat lower transmission fees so that the companys real revenue remains in total within the revenue frame. In order to avoid unnecessary variations in the transmission fees, the Commis- sion proposes that the network companies should be given the chance to apply to the Energy Markets Inspectorate for the real income from connection charges and for relocating existing net- works to be distributed over a longer period of time. An applica- tion of this type shall be granted provided the revenues from con- nection and relocation during the supervisory period have been significant in relation to the revenues from connections/relocations that the network company has normally had from the area in ques- tion. Adjustment of the return with respect to quality The Commission proposes that the quality of the network compa- nies, with respect to their way of conducting network operations, shall influence the size of the revenue frame in an upward or downward direction. It is proposed that the Government or, sub- ject to Government authorisation, the Energy Markets Inspector- ate should issue regulations on what is considered to be quality as regards the way in which the network companies conduct their network operations. The Commission has judged that the Inspec- torate, in an initial phase, should develop a model in which the number of power outages and their length should have an impact on the revenue frame. In the long term, however, the voltage qual- ity and other quality variables should also have an impact on the size of the revenue frame. The evaluation of quality should be based on what the customer should be entitled to expect and is prepared to pay for. It is in this context important to aim for a socio-economically optimum level. This means the quality that the are looking for optimally in relation to the price they are willing to pay. According to the present regulations, the network companies shall pay a so-called outage compensation to in connec- tion with a power outage that lasts more than 12 hours. The main purpose of these regulations, which came into force on 1 January 2006, is to create economic driving forces for the network compa- nies to improve the power outage situation so that long-term dis- ruptions become increasingly rare. The Commission proposes no changes in these regulations. In order to make sure that the net- work companies do not suffer a double economic sanction as a consequence of the longer outages, the Commission feels that they should in such case be kept outside the other quality regulation. Otherwise these outages will have an impact on the revenue of the network companies in two ways; on the one hand as a result of the quality regulation being impaired, which leads to a lowering of the revenue frame, and on the other by a cost being incurred in the form of paid outage compensation, a cost for which the network company is not covered through the revenue frame. Since outage compensation is today included as a cost in the network benefit model, the Commissions proposal that compensation should not be included in the revenue frame will mean a greater risk for the network companies. The Commission proposes, therefore, that a special overview be made with the aim of co-ordinating the regula- tions for quality regulation and outage compensation in the best possible way. The Commission proposes that it should be the duty of the En- ergy Markets Inspectorate to develop a more detailed model for how the quality regulation is to be structured. Special aspects regarding connection fees as regards the relationship between network company and customer (Section 5.4) Through the Commissions previous proposal that the Energy Markets Inspectorate shall in a ratification decision determine a revenue frame, the network companies will receive notice as to how large a revenue they are allowed to earn from the in the form of network tariffs and other charges during the coming su- pervisory period. Included in the revenue frame are the costs in- curred by the network companies for connections. In this section, the Commission takes a stand on the question of how the customer-specific connection fees are to be structured, i.e. the connection fees which the network company invoices a customer. The Commission proposes that the connection fees on the outtake side up to and including a fuse rating of shall be designed so that the fee corresponds to the average cost in the country for making a similar connection under similar objective circumstances. This fee shall include costs for equipment and work that is normally involved in this type of connection. The proposal thus means a standard method for designing connection fees on the outtake side up to and including . In the case of other connections, the Commission proposes that the main principle, as today, should be that the connection fee should be structured so that the reasonable costs of the network companies for connection are covered. In this context, special con- sideration shall be given to where the cable or installation that is to be connected is situated, the power at the connection point and the reinforcements in the electricity network that the connection re- quires. The Commission also proposes that the principle of sharing shall also be expressed in the legal text. This means that the net- work company, in the design of the connection fee, shall also con- sider whether the reinforcement will benefit anyone other that the customer to be connected or whether it can be expected to be of benefit to future connection within ten years from the date of the connection. Repayment of excessively charged fees (Section 5.5) Those revenues that a network company has received from its through network tariffs during a supervisory period will never correspond exactly to the adjusted revenue frame that the Energy Markets Inspectorate sets in its reconciliation decision. Regulations are therefore needed regarding what will happen if the revenues have exceeded or fallen below the revenue frame. The Commission proposes that the amount by which the reve- nues have exceeded or fallen below the revenue frame shall lower and raise, respectively, the revenue frame for the subsequent super- visory period. Consequently, no repayment will be made directly to the customer according to the principal ruling. The main aim of this proposal is that the method should be administratively simple. In the opinion of the Commission, however, a method like this can only be defended when an excess is not too high. The Commission thus proposes that an excess amount shall be charged if the revenues have exceeded the revenue frame by more than 5 per cent. This amount too shall be rolled on to the next su- pervisory period. However, in two cases an excess be paid back directly to the customer. This shall be done if the reve- nues have exceeded the revenue frame by more than 10 per cent or by more than 5 per cent during two consecutive supervisory peri- ods. The repayment shall as far as possible be made to those who were during the most recent period and be distributed in proportion to how large the fees were that were paid by these cus- tomers for the transmission of electricity during this period. Transfer of network concession, etc. (Section 5.6) Chapter 2, § 16 of the Electricity Act stipulates that a network concession can be transferred. One question that arises is what should happen with the adopted revenue frame in a transfer of this type. In the opinion of the Commission it is natural that the start- ing point should be that the revenue frame accompanies the trans- fer. The reason for this is that the transfer in itself should not af- fect the fees the have to pay for the transmission of electricity. Two different transfer situations can be envisaged. In the first, a company can acquire a network concession that constitutes a sepa- rate accounting area. The Commission proposes that the acquired company should in this case take over the revenue frame of the en- tire sold network concession, including the excess or shortfall in of the previous period. In the second situation, a company can only acquire part of an accounting area, for example where the Inspectorate has previously decided on the joint accounting of two area concessions. According to the Commission proposal, the principal ruling in a case like this should be that the revenue frame as well as the previous periods excess or shortfall in should be divided proportionally in relation to how large a part of the ac- counting units capital base has been transferred. However, if there are special reasons, it shall be possible to deviate from this type of division. The Commission proposes that similar regulations shall apply with respect to decisions on the adjustment of concession limits or integrated accounting. Energy Markets Inspectorate supervision of network company revenue in practice (Section 5.7) In this section, a more detailed description is given of how the su- pervision can be carried out by the Energy Markets Inspection as well as the assessments that can be made in ratification and recon- ciliation decisions. The Commission proposes that the Inspector- ate should follow up on an annual basis how the revenues of the network companies compare in relation to the established revenue frames. The information that the Inspectorate subsequently gives to the companies is not a formal decision and thus has no special legal effect. Dispute on transmission fees between network company and customer (Section 5.8) This section takes up the question of how disputes between net- work companies and are to be solved when it comes to the transmission fees to be paid by individual . The back- ground to this question is that according to the present regulations it is possible as a customer, after the customary application for a summons, to have ones network tariff tried by a general court of This could lead to complications if a civil court were, for ex- ample, to find that a transmission fee was unreasonable at the same time as the Energy Markets Inspectorate and the administrative courts have tried the question of the reasonableness of the network companies revenues. The Commission, however, is of the opinion that the present regulations in this respect should not be changed. Appeals against Energy Markets Inspectorate decisions, etc. (Section 5.9) In the first part of the section, the Commission gives an account of how the present court hierarchy is structured. A decision made by the Energy Markets Inspectorate can at most be appealed against in three court instances. This means that it will take many years be- fore a decision of the Inspectorate comes into effect. One of the main reasons for changing to a pure advance review is to increase the level of predictability for and network companies when it comes to future tariff setting. The Commission is of the opinion that the implementation of proposals for advance review of the reasonableness of network company revenues must be regarded as being somewhat superfluous unless they are accom- panied by regulations for a substantially more efficient and shorter appeal process. However, the Commission concludes that it has not been tasked with reviewing the court hierarchy with respect to appeals against network company revenues. The Commission pro- poses, however, that the regulations on appealing against decisions made by the Energy Markets Inspectorate should be changed so that the court procedures are made more efficient and the proc- essing period is shortened significantly, and that a Commission is appointed as soon as possible in order to review these matters. Foreign connections coupled to the regional network (Chapter 6) In this chapter, the Commission is of the opinion that there is no reason to introduce special regulations with respect to network tariffs for the coupling of foreign connections to the Swedish elec- tricity network at regional network level. Financial and other consequences (Chapter 7) The proposals made by the Commission concerning an advance review that is based on the network companies existing networks will contribute towards greater predictability for network compa- nies since it will be possible in a simpler way to gain an overview of the effects an investment has on the capital base and thus the com- panys capital costs. In the case of the , predictability will be created indirectly through the tariffs that the network compa- nies in their turn establish, after determining the size of the reve- nue frame. This should in turn result in more stable tariffs. The Commissions proposal regarding an initial valuation of the electricity network will mean that the electricity networks of cer- tain network companies will be overvalued. The reverse is also pos- sible since valuation takes place on the basis of standard costs. Furthermore, the change in method will in itself have an impact on the network companies capital base. Because of this, it is likely that certain network companies compared with the present situation will be able to raise their charges, whereas other companies will be forced to lower them. As far as the risk of excess is concerned, in the opinion of the Commission it will be limited and relatively short- lived. The Commissions proposal will mean considerably higher costs for the Energy Markets Inspectorate than were required for the work on todays regulations. The Energy Markets Inspectorate has judged that a further 14 man-years will be needed in order to practise supervision in accordance with the proposed model. In addition to this, there are costs for producing, among other things, necessary technical systems. The Commission judges that the Inspectorates cost increase can be financed through higher fees for supervision. Coming into force and interim regulations (Chapter 8) The Commission proposes in this chapter that the first supervisory period should begin on 1 January 2012. In order for the Energy Markets Inspectorate to have time to prepare and collect the in- formation that is needed for the ratification decision that is to be announced by 31 October 2011, it is proposed that certain regula- tions should come into force as early as 1 January 2010 and 1 January 2011. Förslag till lag om ändring i ellagen (1997:857) Härigenom föreskrivs i fråga om ellagen (1997:857), dels att 12 kap. 3 a § ska upphöra att gälla, dels att nuvarande 4 kap. 4 § ska betecknas 5 kap. 16 §, nu- varande 4 kap. 8 § ska betecknas 4 kap. 4 § och nuvarande 4 kap. 9 § ska betecknas 5 kap. 18 §, dels att de nya bestämmelserna 4 kap. 4 § och 5 kap. 16 och 18 §§ samt rubrikerna närmast före dessa paragrafer ska ha följande lydelse, dels att 2 kap. 12 och 16 §§, 4 kap. 1–3, 5–11 §§, 12 kap. 2 § samt 13 kap. 5 § samt rubrikerna närmast före 4 kap. 3 § ska ha följande lydelse, dels att det i lagen ska införas nya bestämmelser, 1 kap. 5 a § och 5 kap. 1-15 §§, 17 § och 19–22 §§, samt ny rubrik till 5 kap och nya rubriker närmast före 4 kap. 8 och 9 §§, 5 kap. 1, 4–6, 8, 10–12, 17 och 19 §§ av följande lydelse.