It should be possible in the budget system to use the depre- ciating principles and equity capital systems to level out pric- es. If, for example, fuel or electricity prices go up, depreciation should be allowed to go down and saved capital to be used for holding prices on a lower level. Visa versa if fuel and electricity prices are falling. This is a balance, and if prices in general are going up, of course, heating prices should follow over a longer timeframe. Several complementing heat sources reliable on different fuels and electricity is another and more important way of levelling out heat prices. If, for example, a heating network both has a CHP and a heat pump capacity, the CHP heating production should be preferred in time with high electricity prices and heat pumps in time with low prices. As long as the technology producing the heat is depreciated more according to produc- tion and the technology producing less heat is depreciated less, a system with complementary technologies will level out heat prices and benefit both consumers and companies. If the accounting and budgeting systems are not able to follow the use of different complementing technologies, the pricing ben- efits of having more technologies may be lost in the short term, and projects may not show feasibility.
equipment is changing production and lifetime. Maximum depreciation time is perhaps 30 years.
Impact on accounting District heating network companies have a monopoly, and the government must establish a regulator function responsible for following the sector the same way as for water-, electricity- and gas companies. The regulator’s role is to monitor the sec- tor and to report to society and the Government if the sector is using its monopoly status and power to suppress consumers by not having fair delivery and pricing systems. For district heating companies and the district heating sec- tor, it will be resilient and reliable if all are following the same accounting principles because it then would be easier for the regulators to monitor and control companies and solve con- flicts between companies and consumers. Especially when it comes to regulation of depreciation, equity capital and profit it is important that legislation and regulator on one side give space for levelling out prices from year to year. On the other side legislation and regulator should not allow unnecessarily accumulation of capital not benefitting consumers and giving profit out of line with normal standards. A standard accounting system on national level will give regu- lator the possibility to benchmark and intervene if companies for some reason do not manage to follow best practice. This require that regulator collect all annual accounts reported to a common system and will be the foundation for following the sector in general and the basis for handling complaints. Impact on budgeting A standard accounting system will make it easy to create a budgeting system, where costs can be allocated to Fixed fees and Consumption-based fees. Some costs should allocate di- rect to a certain fee and others like for example heat source costs should be possible to share between output fee and con- sumption-based fee, because heat source costs are not entirely Consumption-based costs and may include investments etc. Because district heating network companies have monopoly, transparency is very important, and the direct transformation from budget costs based on standard accounting systems to actual fees ensures that pricing principles are followed.
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