Electricity distribution is the core activity of the electricity market. The specificity and na-ture of the distribution process itself mean that the operator has a natural monopoly, which is why electricity distribution, despite the liberalisation of the electricity market, remains a regulated activity. Regulation is particularly reflected in the pricing of electricity distribution services. The system operator and the electricity distribution companies are financed by network charges, the value of which is set by the regulatory authority based on a prede-fined methodology.
Electrification, especially of transport and heating systems, as part of efforts to combat climate change, places an additional burden on an already outdated distribution network. There is a problem of congestion on the distribution network, which the regulator seeks to address through a tariff system that should encourage consumers to use electricity at times when the network is under less stress. For tariffs to be an effective way of providing flexibility to the distribution system, electricity demand must be sufficiently elastic. If elec-tricity demand is not elastic, tariffs cannot comply with the law, as they fail to achieve the legally permissible objective of ensuring flexibility in the distribution system and result in unjustified charges that exceed the system operator’s reasonable costs and return.
The master’s thesis presents the way in which the regulator determines the value of the network charge, focusing on certain factors that are essential for the calculation, in particu-lar the costs incurred by the system operator and distribution companies in providing the electricity distribution service. The question of the economic efficiency of the tariff system as a means of ensuring both flexibility and legal compliance is also addressed.
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