Investigation of the Robustness of the Swedish Network Performance Assessment Model

The Swedish energy agency (STEM) has developed a regulatory model to supervise the revenues of the distribution system operators (DSO). The model is referred to as the network performance assessment model (NPAM). The NPAM calculates customer values for a fictive electrical distribution system, with a total cost referred to as the network performance assessment (NPA). The debiting rate for a DSO is defined by the quotient of the revenue and the NPA. If the debiting rate is higher than a certain value, the DSO is placed under review and could be forced to pay back revenue to customers. A lawsuit is currently in progress on this use of the NPAM. This paper shows results from a comprehensive sensitiveness study of the NPAM investigating the robustness of the model. The investigation shows that the model is not robust, since small stochastic variations in input data could lead to larger differences in the results than those from the model. For example, it is shown that a five-meter difference in the coordinates of the nodes in the reference system could result in a difference of 5 million Euros, i.e., approximately US $6.5 million. The understanding of weaknesses in the NPAM presented in this paper provides an important means for future developments of regulatory models in the world.