The regulatory situation in Sweden today — From a Swedish DSO perspective

The Swedish electricity network industry has historically had an ex-post regulation. The ex-post regulation seen was inadequate due to its complexity and unpredictable. To avoid these uncertainties, and to be inline with the EU directives, the Swedish Parliament decided to introduce a new regulatory model, an ex-ante model. The implementation of the new model has not gone smoothly. More than 50 percent of the electricity network companies in Sweden appealed the decision when the Regulator announced the revenue frames for the next regulatory period on October 31, 2011. As a result, the Swedish DSO´s are once again in a situation of uncertainty, something that the new ex-ante regulation was meant to minimize. This paper will outline and discuss Vattenfall Eldistribution AB:s view of the fundamental principals of an optimal regulatory model and where the Swedish regulatory situation is today in its quest to achieve a good long-term, sustainable solution.