The Commerce Commission has reached an out of court settlement with lines company Horizon Energy for earning more than it's allowed.

In the year ending March 2012, Horizon Energy exceeded its allowed earnings by just over 645 thousand dollars - or three percent of its income.

The amount of revenue an electricity distributor can earn in any given year is regulated by the Commerce Act.

Under the settlement, Horizon Energy will have to reduce its 2015/2016 earning by just under $728,000.

The amount's been calculated by taking into account the gain to Horizon Energy as a result of the breach.

The Commerce Commission says Horizon Energyâ s breach was not intentional, and was the result of variations between forecasts used to set prices and calculation errors.

This is the second such settlement .

In December last year, the commission reached a similar settlement with Wellington Electricity after it breached its price path by more than 116-thousand dollars.