Note 2 Operating revenues
Operating revenues regulated operations
Statnett's revenues are mainly derive from activities regulated by the NVE. Statnett's actual operating revenues from regulated operations come from fixed and variable tariff revenues in the main grid and regional grid, as well as congestion revenues.
Each year the NVE set an upper limit, or cap, for Statnett's permitted revenue. This item corresponds to Statnett's revenue cap including amendment in the revenue cap for each year.
A discrepancy arises annually between Statnett's actual operating revenues from regulated operations (the total of the tariff and congestion revenues) and Statnett's permitted revenue determined by the NVE. This discrepancy is called higher or lower revenue. Higher revenue means that Statnett has had higher actual operating revenues than the revenue cap set by the NVE for a particular year. Lower revenue means that Statnett's actual operating revenues have been lower than the permitted revenue cap.
Pursuant to NVE regulations any higher revenues, including interest, must be returned to the customers in the form of lower prices in subsequent years. Correspondingly lower revenues, including interest, can be recouped by charging higher prices in subsequent years. The obligation to reduce future tariffs and the opportunity to collect increased tariffs do not qualify for capitalisation according to IFRS, consequently representing a latent obligation (in the event of accumulated higher revenue) and a latent receivable (in the event of accumulated lower revenue). Consequently, an annual change in these items will not be included in the income statement.
Statnett's actual operating revenues from regulated operations equal the total of Statnett's permitted revenue set by the NVE and the higher/lower revenue the same year.
Specification of income by regional grid (R Grid) and the main grid (M Grid)
Total operating revenues from regulated operations fell by NOK 687 million from 2012 to 2013, mainly due to lower tariff revenues as a result of lower stipulated tariffs for 2013 compared with 2012.
Statnett is expecting to receive a decision relating to an adjustment in the higher/lower revenue balance as of 31 December 2013 of NOK 143 million. The adjustment will compensate for the equity effect of implementing amended rules for recognition of pension liabilities. This entails a reduction of the main grid higher revenue balance of NOK 139 million. For the regional grid the expected adjustment will result in an increase in the lower revenue of NOK 4 million.
Impact of grid outages on profit
Following the outages at Nyhamna, for the period up to 2012, Statnett is in dialogue with NVE regarding the treatment of system services costs and classification in the KILE scheme related to this incident. The financial consequences for Statnett of such a grid outage have therefore not been clarified. As a result of the March 2013 outage on the Viklandet - Fræna power line, provision have been made in the accounts following the same principle as for past events.
Other operating revenue
Other operating revenues are revenues outside of the regulated operations and consist of mainly external consultancy commissions and rental income.
External assignments within the rest of the group are carried out by Statnett Transport AS.
Statnett SF holds a separate licence to settle the regulating power settlement system in Norway. This involves effectuating a financial settlement of the difference the balance responsible market players have between planned acquisitions and liabilities and the actual measured values. The balance responsible market players are financial counterparties in the settlements and must provide collateral in accordance with the Balance Agreement. The collateral requirement is calculated weekly based on trading volume and market prices. Collateral is posted as a guarantee on demand or as a cash deposit in a pledged bank account. The amount of collateral posted totalled NOK 1 078 million at year-end. The collateral posting for balance responsible market players on the same date was NOK 535 million. All balance responsible market players had posted satisfactory collateral under the Balance Agreement.
In 2013, income for the balance settlement responsibility amounted to NOK 74 million, of which NOK 23 million were fee revenues. Outstanding trade accounts receivables relating to the balance accounting totalled NOK 25 million at 31 December 2013 and are disclosed as trade accounts and other short-term receivables.
Operating profit within and outside grid activities
Basis for return on invested grid capital
The regulatory asset base is defined as the average of the incoming and outgoing balance for invested grid capital, plus one per cent for net working capital. The invested grid capital is given as the initial historical acquisition cost.
The share of common fixed assets is included.
Return on invested grid capital
Return is defined as the operating profit/loss viewed in relation to the regulatory asset base. The operating profit/loss is given as the annual permitted revenue from own grid less costs of own grid.