Transelec’s income issues mainly from the commercialization of the electricity transportation and transformation capacity of the company’s installations, both in the SIC and the SING.
“Short Law I” established a transition period, during which time the collection and payment of the transmission installations continue to be calculated according to the legal and regulatory rules in force prior to its publication.
Thus, Transelec’s installations were valued under the New for Old Value (NOV) concept, which quantifies the investment required to replace the existing installations with new ones of similar characteristics at current market prices. The ANOV, or annual new for old value, considers a real discount rate of 10% and a useful life of 30 years for the entire group of installations, plus Operating and Maintenance Costs (O&MC).
In turn, this remuneration is divided into two parts: the expected Transmission Income (TI) and the toll. Due to the fact that the expected Transmission Income is not on average sufficient to recover the total ANOV plus O&MC, it is complemented by a transmission toll to reach its proper value.
The remuneration received by the trunk transmission systems is subject to recalculation, as was established in the pricing decree issued on 15 January 2008.