Proposed amendment of the Swedish Electricity Act

The Swedish Government has on November 14 2019 submitted a proposal to the Council on Legislation (Sw. lagrådet) to amend the Swedish Electricity Act. The proposal intends to prevent grid companies from, during an interim period, “roll over” non-utilized deficits in respect of the revenue caps (Sw. intäktsramar) issued by the Swedish Energy Inspectorate for the supervising period (Sw. tillsynsperiod) 2012-2015. The purpose of the proposed amendment is to hinder grid companies from accumulating deficits from several previous supervising periods.

 According to the Government, the amendment will result in lower fees for consumers during the supervising period starting in 2020, compared to a situation where the amendment is not implemented. The total estimated amount is SEK 28 billion (appr. EUR 2,6 billion).

 The proposal will not affect non-utilized deficits from the period 2016-2019.

The amendment is proposed to come into effect on April 1, 2020.

 The Swedish Government also states that a proposal for a new legislation will follow, which will allow rolling over deficits, provided that investments have been made in the grid infrastructure.

 The next step in the legislative process is a review and a subsequent formal opinion from the Council on Legislation. Thereafter the Government will submit a government bill (Sw. proposition) to the Parliament which will then decide if the legislation shall pass or not.

 The proposal has been met by criticism from several consultation bodies which have considered the proposal. Sharp criticism has been raised by the Swedish Bar Association, which has raised the issue of whether a state governed by the rule of law may introduce a new legal provision which eliminates the economic effects of court rulings with negative outcome for a state agency (the Energy Market Inspectorate).