Abstract
The tariff setting for district heating (DH) services is a hard regulatory procedure. This chapter is devoted to development of the simple but sufficiently accurate methodology for fast and objective evaluation of the actual costs of DH to optimize the regulatory process and to set adequate tariffs on heat production and transmission. The developed methodology is based on the data sets of Latvian DH providers, but the methodological principles are applicable in another area too. Investigation of heat production drivers and following simulation revealed the key performance indicators (KPIs): fuel type and price. By usage of intelligent benchmarking data mining methods and mathematical modeling tools, the KPIs of the heat transmission costs were found: the network length and largest inner diameter of pipes. Strong correlations and very small deviations between modeled and actual tariffs/costs confirmthat the created methodology can be applied for regulation of the DH tariffs.
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