Regulated Revenue and System Usage Charges

The primary purpose for determining the regulated revenue of a distribution activity is to ensure that the Operator recovers the cost of the activity that the Regulator deems reasonable for the development, operation and maintenance of the Network in order to meet the demand for distribution services. An Operator has incentives to reduce this cost by improving its efficiency without compromising the level of security, network performance or quality of services provided. The reasonable cost incurred by the Operator is recovered through the usage charges incurred by the Users of the network. The methodology for determining the usage charges of the Network aims at the distribution of costs among the users of the Network in a fair way, ie based on the costs they cause to the network, as well as to provide financial signals to users, to shape their usage behavior in a way which helps to reduce the distribution costs.

The Hellenic Electricity Distribution System Network Code defines the general framework and sets the basic principles and objectives of the Methodology for Calculating the Required Revenue.

The main aspects of DEDDIE’s Required Revenue Calculation Methodology are:

  • Determination of the Allowed Revenue for a period of 3 to 5 years (Distribution Regulatory Period), taking into account the reasonable costs of the capital employed of the activity included in the Regulated Asset Base, the projected investments of the time period and the reasonable operating expenses.
  • Determination of the Required Revenue considering the performance of the network (losses), the quality of the services provided and the settlement of the investments, the non-monitored operating expenses and the revenues from other sales for which resources included in the Allowed Revenue are used.
  • Determination of the controlled operating expenses based on the reasonable and efficient expenses of the previous period, considering estimates for productivity improvement, activity scope changes and prices of key resources, in combination with an incentive mechanism for the Operator to reduce his operating expenses.
  • Incentives for the timely implementation of investments with significant benefits for the market (Major projects), through the provision of additional return (WACC premium).
  • Allowed Revenue possibility revision within the period, due to significant and unpredictable changes in parameters that affect the cost of the activity.
  • Procedure that starts 18 months before the start of the regulatory period and includes consultation with the Operator as well as a public consultation, which results in the Distribution Regulating Decision, which determines the necessary parameters for the calculation of the Allowed and Required Revenue.

The methodology for the determination of the Network Usage Tariffs is set out in the Network Usage Tariffs Manual. Basic principles of this methodology are the recovery of the Required Network Revenue, its fair distribution among the network users, the structure of the tariffs to reflect the different network costs (i.e. fixed costs, costs dependent on the electricity demand), the objectivity, the transparency, the clear formulation of the methodology and the tariffs’ way of determination. For the producers connected to the network, individual tariffs are provided based on the network used exclusively by them. A uniform tariff per consumer category is foreseen. Each consumer category includes consumers based on the consumption characteristics of their facilities so that the costs of the network are reasonably incurred by them. Most of the Required Revenue concerns the capacity charge and it is distributed to the network users based on the capacity which is absorbed by all consumers of each category during the peak load hours of the network. The peak load hours are determined before the start of the Regulatory Period considering the load variations of the previous two years and remain fixed throughout the Period. For consumer categories with remote electricity meters with hourly metering, the capacity charge of each consumer is calculated based on the electricity demand during peak hours. For the other categories, the charge is based on the agreed capacity of each consumer. The capacity charges are calculated by the network operator on an annual basis, immediately after the determination of the Required Revenue for each year and are approved by RAE.

This section includes RAE Decisions as well as other information and data regarding the development and implementation of the above framework for the determination of the Allowed and Required Revenue and the distribution network usage tariffs.

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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