Regulation parameters impact on distribution business revenue with focus on differences between urban and rural areas

The regulation of electricity distribution differs between the countries in Europe, giving different conditions for the actors on the market. The regulation methods are using different types of parameters to estimate the reasonable level of the distribution service tariffs and revenue. The choice and valuation of parameters are of ultimate importance for regulation of electricity distribution. The objective of this paper is to identify the basic factors of low voltage networks, and determine the differences in value and costs for operating a low voltage network in an urban and rural network. This will indicate those aspects which are relevant to consider in the regulation of electricity distribution revenues and tariffs. The comparison of the regulation methods in different European countries will also indicate in what way the regulation on the European market has to change to reflect the electricity distribution business in a significant way.