About The National Regulatory Authority
The National Regulatory Authority is an independent unit within the National Energy Authority and is responsible for monitoring the electricity market in accordance with the provisions of the Electricity Act no. 65/2003. With the introduction of the third Electricity Packet (2009/72/EC) into Icelandic law, the mandatory and independent regulatory body for the electricity market was strengthened. The scope of monitoring applies to all companies operating under the Electricity Act.
The purpose of the National Regulatory Authority
The purpose of the National Regulatory Authority is to monitor that companies within the electricity market operate in accordance with the Electricity Act, to ensure fair competition in the electricity market, as well as a cost-effective development of electricity transmission and distribution systems.
The National Regulatory Authority role as a supervisory authority is to regulate the grid companies, who handle the transport and distribution of electricity, to ensure that the development of infrastructure for the distribution and transport of electricity is cost-effective and efficient. It also monitors that electricity users receive electricity of a certain quality at a reasonable price. The network companies must maintain equality in all respects with regard to all electricity suppliers. The Regulatory Authority regulates the grid companies financially by determining, according to law, annual revenue frameworks that set an upper limit on how much the companies can charge for the transmission and distribution of electricity to their customers.
Monitors the production of electricity in the retail and wholesale markets
The National Regulatory Authority also monitors the production of electricity in the retail and wholesale markets to promote active competition in the market and to ensure that the market functions normally as well as ensuring consumer protection.
Concession companies sell the electricity to retailers through a wholesale electricity market. Retailers sell the electricity to a large number of general users, Icelandic households and companies. All users in Iceland are free to buy electricity from the energy retailer of their choice, whether they are large users, households or businesses.
As a regulator, the National Regulatory Authority has several tasks. The objective is to promote competition in the production and trading of electricity; promote efficiency and economy in the transmission and distribution of electricity; ensure adequate electricity security, consumer interests and consumer awareness in the electricity market; promote the use of renewable energy sources; and make sure environmental aspects are being met. These objectives guide the National Energy Authority in its tasks.