Regulated Revenue and System Usage Charges

The main purpose of determining the regulated revenue of the distribution activity, is to ensure that the Operator recovers the costs of the activity that the Regulator considers reasonable for the development, operation and maintenance of the Network, in order to meet the demand for distribution services, and that the Operator is motivated to reduce this cost, improving its efficiency, without degrading the level of security, the performance of the Network or the quality of the services provided. The reasonable costs of the Operator are recovered from the users of the Network through usage fees.

The methodology for determining network usage fees aims to distribute costs to network users in a fair way, based on the costs they bring to the Network, as well as to provide economic signals to users, to shape their consumption behavior in a way that will contribute to reducing the cost of this activity.

The Distribution Network Operation Code defines the general framework and sets out the basic principles and objectives of the Required Revenue Calculation Methodology.

The main features of the Methodology for Calculating the Required Revenue of the Distribution Network are:

Determination of Allowed Revenue for a period of 3 to 5 years (Regulatory Distribution Period), considering the reasonable cost of the employed capital of the activity included in the Regulated Asset Base, the projected investments of the period and reasonable operating expenses.
Determination of Required Revenue, considering the performance of Network (losses), the quality of services provided and the netting effect for investments, the non-controllable operating expenses and revenue from other sales for which resources included in the Allowed Revenue are used.
Determination of controlled operating costs, based on the reasonable and efficient costs of the previous period, considering estimates of productivity improvement, changes in the volume of activity and prices of basic resources, combined with an incentive mechanism to the Operator to reduce operating costs.
Incentives for the timely implementation of investments with significant benefits for the market (Projects of Major Importance), through the provision of additional performance (WACC Premium).

Possibility of Allowed Revenue revision within the period, due to significant and unforeseeable changes in parameters affecting the cost of the activity.
Process which begins 18 months before the start of the regulatory period and includes consultations with the Operator, as well as public consultation, which will end with the Distribution Regulation Decision, which defines the necessary parameters for the calculation of the Allowed and Required Revenue.

The methodology for determining Network Usage Fees is specified in the Network Usage Fees Manual. Basic principles of this methodology are the recovery of the Network’s Required Revenue, its fair distribution to the users of the Network, the structure of fees to reflect the different costs of the Network (e.g. fixed costs, costs depending on the demand for power and for energy), the objectivity, transparency and clear formulation of the determination methodology, the simplicity of the way the fees are determined. For Network producers, personalized fees are provided for parts of the Network that are used exclusively or almost exclusively by them.

For consumers, uniform fees per category are provided. Each category includes consumers who, due to the basic electricity consumption characteristics of their facilities, can reasonably be expected to burden the costs of the Network in a similar way. The largest part of the Required Revenue concerns the power fee and is distributed based on the power absorbed by all consumers of each category during peak load hours. The peak load hours are determined before the start of the Regulatory Period considering the load variation of the previous two years and are kept constant throughout the period. For consumer categories with hourly telemetered meters, each consumer’s power charge is calculated based on the power demand during peak load hours. For other categories, the fee is based on the agreed power of the customer.

The unit charges are calculated by the Network Operator on an annual basis, immediately after determining the Required Revenue for each year and are approved by RAE.
In this section, RAE’s Decisions are made public, as well as other information and data regarding the development and implementation of the above framework for determining the Allowed and Required Revenue and fees for the use of distribution networks.
You can find information about the methodologies for determining the Allowed and Required Revenue of DEDDIE and the fees for the use of distribution networks, as well as the relevant RAE Decisions here: (note 9)

DEDDIE Required Revenue Calculation Methodology

DEDDIE Revenue

Regulatory Period 2021-2024

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Hellenic Electricity Distribution System Usage Tariffs

Regulatory Period 2021-2024

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Usage Tariffs of the Athens International Airport Grid

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