Regulatory methods 2016–2023

Validation decisions and regulatory methods 2016–2023

The Energy Authority monitors the pricing of network operators as a whole in periods of four years. The Energy Authority has confirmed to the electricity and natural gas operators the methods on the basis of which the monitoring will be carried out for the next eight years. The monitoring is based on electricity and natural gas market legislation, regulatory methods to guarantee reasonable pricing confirmed by the Energy Authority on the basis of electricity and natural gas market legislation, and legal praxis.

The Energy Authority will investigate the reasonableness of pricing in 2016–2019 in 2020. At that time, the Energy Authority will submit a monitoring decision to each electricity operator. The decisions will obligate the operators to refund their customers any excessive prices collected by revising the transmission charges during the next four-year period.

The monitoring methods confirmed by the Energy Authority are network operation specific as follows:

Electricity distribution network operations and high-voltage electricity distribution network operations

Electricity transmission network operations

Natural gas transmission network operations

Monitoring of price increases

A network operator may increase its electricity or natural gas transmission and distribution charges by a maximum of 15% when compared to the charges collected in the past twelve months. The Energy Authority monitors price increases and addresses any excessive increases as necessary.

The monitoring of price increases is based on increases of the average price for a typical electricity or natural gas user group, inclusive of tax. The monitoring of price increases does not cover any increases of single price items, such as the basic charge. The average price inclusive of tax for electricity consumer users usually consists of the basic charge (€/month), the transmission charge (c/kWh) and the tax.

When assessing price increases by electricity and natural gas distribution network operators, typical user groups that are representative of the customer groups generally in use in the industry are used. The Energy Authority will determine new typical user groups for distribution network operators in spring 2019. They will better representative of the currently used consumption profiles. The currently used typical user groups for the distribution of electricity and natural gas are available in the attached file.

There are no typical user groups for the transmission of natural gas (Gasum), the electricity network operator (Fingrid) and high-voltage network operators, which is why the Energy Authority uses an alternative calculation method based on legislation when monitoring their price increases.

The monitoring of price increases does not influence the assessment of reasonable pricing according to the regulatory method. The reasonableness of network operators’ pricing is monitored as a whole in periods of four years in addition to the monitoring of price increases.