NVE, in the role of being the national regulatory authority in Norway, is responsible for ensuring that network operators, generators and power suppliers (licensees) act in accordance with the Energy Act and underlying regulations. Efficient regulation is dependent on high quality of data, and compliance monitoring is a necessity in achieving that.
The network operators are monopolists and subjected to economic regulation. It is crucial to the regulation of the network industry that the network operation is kept separate from other competitive industry. NVE uses data collection and control to verify whether network operators are acting in compliance with laws and regulations. In addition, NVE carries out inspections and data analyses, and conducts thematic supervisions.
Data collection and control
The revenue caps are based on data collected from network operators. There are two main annual data collections – the economic and technical report and the TEK-report. The economic and technical report provides economic data for both the cost base and cost norm, as well as technical data for the local distribution grid operators. TEK provides the technical data to calculate the correct revenue cap for the regional distribution grid operators.
eRapp - Economic and technical report
All licensees are required to complete the economic and technical report, cf. The Energy Act Regulation § 4-4. They must complete the report in accordance with the Norwegian Accounting Act and GAAP, as well as other requirements by NVE. The licensees complete the report in NVE web based reporting system, eRapp. eRapp was first used in 2001, but submission of economic and technical reports in electronic formats has been an annual requirement since 1993.
The network operators report information regarding company ownership, income statement, balance, transferred volume and revenues, excess and deficit revenues, R&D costs, cost of transmission services, cost of salaries and pensions, other operating expenses, depreciations on assets, principles for allocation of common costs and assets, investments, cost of energy not supplied (CENS), number of km of lines and cables, transformers, meters and more. Data is reported as a company total as well as for the individual business areas: electricity sales, power production, transmission, regional distribution, local distribution, telecom business and other activities.
To prevent errors, there are 200 automatic checkpoints in eRapp. These automatic controls check for continuity, incoherence, logical flaws and lack of explanations in the report. The system also requires an auditor control. The auditor has to complete a checklist and comment on any discrepancies, before approving the report and transferring it to NVE. NVE then runs through a set list of checkpoints. The manual checklist changes somewhat on an annual basis, but consists of approximately 40 checkpoints. NVE’s manual control of all of the network operators takes roughly five months to complete.
TEK – Technical report for regional distribution assets
All transmission and regional distribution grid operators must report all changes in TEK-data, cf. The Energy Act Regulation. TEK has been an annual requirement since 2005. TEK contains information about the number of grid km (overhead lines, underground cables and submarine cables), voltage level, material selection, grid interface, number of transformers and their performance, percentage of ownership and operational responsibilities, etc. The network operators must confirm the TEK-data even if no changes have been made during the past year. When the TEK reports are received, NVE checks each individual amendment to ensure the data is correct.