TARIFFS, ACCOUNTING, AND BUDGETING IN DISTRICT HEATING COMPANIES
By John Tang Jensen, District Heating Expert, Danish Embassy London
District heating companies are, in many aspects, not different from other companies selling goods to consumers. There is only one product, “heat,” and the price normally is the same for all customers. The district heating companies, though, have a monopoly, and the sales for the coming budget year are predictable and follow a season with high sales in winter and low sales in summer.
to keep heat price development stable because heat is a large part of the consumer economy, and consumers do not like sudden price increases and prices above alternatives, which causes conflicts. This article discusses some important princi- ples regarding tariffs, accounting, and budgeting, which can make the district heating sector and company pricing reliable and fair.
Budgeting and accounting then should not be much different and probably easier compared to other industrial companies operating on unpredictable market conditions and market prices. There are some principles that may need to be consid- ered when making budgets, tariffs, and accounting to ensure best practices are used and provide utilities with a stronger position in case of conflicts. The most important principle is
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