Swedish Regulatory Authority Rejects Unjustified Electricity Fee Increases by Network Companies

Energimarknadsinspektionen (EI), the Swedish energy market regulator, has formally rejected the sharp electricity network fee increases proposed by major companies, including Vattenfall. The regulator found that the planned hikes, such as Vattenfall’s suggested 14% increase, are not justified by the companies’ intended investments in the power grids. This marks a critical intervention against what EI describes as overcompensation driven by historically excessive fee levels charged by network monopolies.

According to Tommy Johansson, head of department at EI, electricity network companies have historically charged fees beyond their actual costs, leading to significant overcompensation. Over the past decade, fees associated with electricity networks have risen by about 57%, despite the lack of sufficient justification in recent proposed increases. EI warns this pattern might continue as other companies consider following Vattenfall’s lead.

The fees in question make up roughly one-third of a household’s electricity bill, underscoring the substantial consumer impact of the increases. While lower courts have not been fully successful in limiting these fee escalations, the income frameworks that govern electricity network fees — set every four years — currently allow for up to 40% higher revenue caps from 2024 to 2027 than before.

Looking ahead, the Swedish parliament has approved a more stringent regulatory framework for 2028-2031. Even so, EI anticipates the revenue caps for network companies will still increase during this new period, albeit to a lesser extent, reflecting necessary future investments in the grid network. EI’s stance highlights the urgency for strengthened consumer protection and tighter regulation of electricity network fees to prevent undue financial burdens on households.