Power-based Distribution Network Tariff of Small Customers in Different Operational Environments – Case Study of Two Networks

Abstract

This paper discusses the aspects of the development of the pricing of electricity distribution. The operational environment of the Distribution System Operators (DSO) is changing due to various factors. The DSOs have to take actions in order to ensure that the qualifications for a stable and sustainable business are still present in the future. One way to ensure this is that the DSOs start developing their pricing practices. Especially tariffs, which include a capacity related component, are seen as a potential development direction. The paper includes a case study of power-based pricing, where data from two Finnish DSOs are applied. The results show that the customer impacts in both cases would not be massive for the majority of the small customers, which is central from the successful tariff reform viewpoint. Additionally, two Finnish DSOs have gradually started to apply a power-based distribution tariff (PBDT) to their small customers.