The Swedish Energy Market Inspectorate, Ei, has an assignment toregulate the revenue cap for the network operators in Sweden. As apart of this regulation there is an incentive for the networkoperators to lower their network losses. This incentive wereintroduced 2016 as a norm level based upon the network operatorsown historical values of network losses. If the operators manageto lower their network losses compared to their own norm levelthey are given a higher return on their asset base. The aim of this thesis was to evaluate the possibilities to createa function form calculations of norm levels based upon theconditions under which each network operator perform and ifpossible direct this function. The conditions for creating suchfunction were investigated by analysing data of differentparameters in the Swedish networks to find which of them thatcould describe the losses through a function. The number of customers per kilometre line was found to be thesingle most important parameter to describe the network losses. Bycombining the number of customers per kilometre line with aparameter for the part of the energy that is feed out at highvoltage the function could describe the losses even better. Usingthis function will give the network operators more long timeincentives to lower their network losses than the norm levelsbased upon their own historical values of network losses.