In­cen­tive reg­u­la­tion ac­count

The incentive regulation account maintained by a network operator is for entering and reconciling the actual revenue and the allowed revenue in light of the changes in actual consumption volumes.

The account was originally set up to only balance out forecast uncertainties owing to volume fluctuations caused mainly by weather conditions. Since network operators base their network charges on forecasts of future energy volumes transported for consumption, which in turn are influenced by a variety of factors such as temperature and economic activity, there are frequently differences between the revenue generated and the allowed revenue under the revenue cap. These differences become clear at the end of each year and are entered into the account. This relieves the regulated operators of the volume risk and means that operators with fluctuating sales volumes can also spread their network costs across their actual volumes.

The difference between planned costs and actual costs of individual permanently non-controllable costs (eg upstream network charges and avoided network charges), among other things, is also entered in the incentive regulation account. The balance is settled annually for the prior year and flows evenly into the revenue caps for the next three calendar years. Commercial law permits the offsetting of the respective annual amounts. See excerpt from the German Institute of Chartered Accountants (pdf / 108 KB) findings. The incentive regulation account mechanism avoids sharp fluctuations in network charges, thereby increasing predictability and planning reliability for businesses and network users.

Details on maintaining an incentive regulation account are set out in section 5 ARegV . The regulatory authorities approve the incentive regulation account balance and how the balance is distributed among the revenue caps. How this is handled in a separate decision was changed in 2016. Since then network operators have until 30 June each year to apply for an adjustment to their revenue cap.

Lists of proceedings

An overview of the proceedings (of all electricity network operators) and the corresponding reference number can be found for all regulatory accounts starting with the second regulatory period (2013) under the following link: List of proceedings incentive regulation account 2013-2019

Further information

Date of modification: 2021.08.31