The potential of Using EQUIVALENT COMPARISON STANDARDS to judge EFFECTIBLE COSTS in Electrical Distribution tariff regulation

Sweden will implement a new tariff regulation from 2012. This paper presents results from a project initiated by the Swedish regulator, performed by the RCAM (Reliability Centered Asset Management) research group aimed to review the potential of using equivalent comparison standards to judge effectible costs. The study includes interviews and surveys distributed to every Swedish distribution system operator (DSO). However, no sharp proposal on units appropriate to use in the first regulatory period (2012-2015) could be provided, due to e.g. large variations in response from the DSOs. The study provides several results such as enabling for all parties to contribute their views before implementation; indication of how current units should be modified; increased knowledge for involved parties and an action plan for future work. The regulator’s initial idea was to apply this kind of model to 25 % of the effectible cost part during the first regulatory period, but based on this study the regulator changed this plan.QC 2011081