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TSO Revenue Cap Settlement for 2023 

TSO Revenue Cap Settlement for 2023 

4 July 2024
TSO Revenue Cap Settlement for 2023 

The National Regulatory Authority has completed the settlement of Landsnet's revenue cap for 2023. Landsnet is the transmission system operator (TSO) in Iceland. The revenue cap sets limits for concession companies in the transmission and distribution of electricity regarding allowable revenue and expenses. Revenue caps are not set in Iceland for geothermal heating or other activities of concession companies. 

The results showed that Landsnet's revenue allowances were under-collected by ISK 452,008 thousand for general users and ISK 1,058,308 thousand for large users. At the end of 2023, Landsnet's accumulated under-collected revenue was ISK 589,770 thousand for general users, or -7.9% of the revenue cap, and ISK 1,904,976 thousand for large users, or -15.0% of the revenue cap. 

The transmission company proposed to extend the depreciation period of the newest 220 kV high-voltage lines from 50 years to 60 years, which the Electricity Authority of the National Energy Authority approved. With this change, the depreciation in Landsnet's revenue cap reflects the company's accounting. Further details and main assumptions are accessible in the spreadsheet here

The revenue cap is now based on the average expenses for the period 2015-2019, updated with the consumer price index and wage index, along with depreciation and allowed return on fixed assets and current assets. Electricity transmission tariffs paid by users are based on the revenue cap, as well as system service and transmission losses. 

More information about the transmission company's settlement can be found here:  Tekjumörk — Orkustofnun