Econometric Benchmarking of Cost Performance: The Case of U.S. Power Distributors
AbstractBenchmarking of cost efficiency has growing use in energy utility regulation. The state of the art has been limited in many countries by the small size of available national data sets and poor data on capital cost. Data available in the United States place fewer constraints on benchmarking methods. This paper develops an econometric cost benchmarking model for power distribution that is based on U.S. data. The model can address total cost and its major components. Numerous cost drivers are identified. Statistical tests of efficiency hypotheses are performed. The cost performances of utilities are compared to the industry norm. The suitability of the alternative frontier standard in regulatory applications is discussed.
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Bibliographic InfoArticle provided by International Association for Energy Economics in its journal The Energy Journal.
Volume (Year): Volume 26 (2005)
Issue (Month): Number 3 ()
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- F0 - International Economics - - General
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- Hess, Borge & Cullmann, Astrid, 2007. "Efficiency analysis of East and West German electricity distribution companies - Do the "Ossis" really beat the "Wessis"?," Utilities Policy, Elsevier, vol. 15(3), pages 206-214, September.
- Lowry, Mark Newton & Getachew, Lullit, 2009. "Statistical benchmarking in utility regulation: Role, standards and methods," Energy Policy, Elsevier, vol. 37(4), pages 1323-1330, April.
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