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Transmission expansion in Argentina 5: The regional electricity forum of Buenos Aires province

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  • Littlechild, Stephen C.
  • Ponzano, Eduardo A.

Abstract

This paper supplements analyses of Argentine transmission expansions at the federal level by looking at experience in Buenos Aires province. A Regional Electricity Forum of distribution companies has drawn up and begun to implement a 10-year transmission expansion plan. Contrary to previous fears, getting agreement between the members on investment and cost sharing has not been unduly problematic. More challenging was getting approval of the provincial government on funding. Deferring tariff reductions and using the revenues for investment facilitated the process, and now some innovative financing arrangements are underway. Again contrary to some previous suggestions, the controversial Area of Influence method was extended rather than replaced. This overcame concerns about free-riding. Progress and investment have been severely curtailed by the economic crisis in 2001 and subsequent federal government policy. The arrangements nonetheless appear to be working well, and to be conducive to more efficient transmission expansion. This confirms that it is practicable and advantageous to allow users rather than the transmission company or the regulator to propose and determine transmission investment, even in a meshed rather than radial system. An appropriate regulatory framework is needed to approve that part of the total budget to paid by distribution business consumers, but this does not require the regulator to lead or monitor the detail of the process.

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Bibliographic Info

Article provided by Elsevier in its journal Energy Economics.

Volume (Year): 30 (2008)
Issue (Month): 4 (July)
Pages: 1491-1526

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Handle: RePEc:eee:eneeco:v:30:y:2008:i:4:p:1491-1526

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  1. Littlechild, Stephen C. & Skerk, Carlos J., 2008. "Transmission expansion in Argentina 6: Distribution companies, regulation and the Public Contest method," Energy Economics, Elsevier, vol. 30(4), pages 1527-1535, July.
  2. Abdala, Manuel A., 2008. "Governance of competitive transmission investment in weak institutional systems," Energy Economics, Elsevier, vol. 30(4), pages 1306-1320, July.
  3. Littlechild, S.C. & Skerk, C.J., 2004. "Regulation of transmission expansion in Argentina Part I: State ownership, reform and the Fourth Line," Cambridge Working Papers in Economics 0464, Faculty of Economics, University of Cambridge.
  4. Littlechild, Stephen C. & Skerk, Carlos J., 2008. "Transmission expansion in Argentina 3: The evolution of policy," Energy Economics, Elsevier, vol. 30(4), pages 1420-1461, July.
  5. Littlechild, S.C. & Skerk, C.J., 2004. "Regulation of transmission expansion in Argentina Part II: Developments since the Fourth Line," Cambridge Working Papers in Economics 0465, Faculty of Economics, University of Cambridge.
  6. Abdala, Manuel A., 2008. "Transmission pricing in privately-owned electricity grids: An illustration from the Argentine electricity pool," Energy Economics, Elsevier, vol. 30(4), pages 1284-1305, July.
  7. David M. Newbery, 2002. "Privatization, Restructuring, and Regulation of Network Utilities," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262640481, December.
  8. Littlechild, Stephen C. & Skerk, Carlos J., 2008. "Transmission expansion in Argentina 1: The origins of policy," Energy Economics, Elsevier, vol. 30(4), pages 1367-1384, July.
  9. Manuel A. Abdala & Pablo T. Spiller, 2005. "Decentralized Investment and Quality Decisions In Common-Pool Networks," Public Economics 0508004, EconWPA.
  10. Chisari, Omar O. & Dal-Bo, Pedro & Romero, Carlos A., 2001. "High-tension electricity network expansions in Argentina: decision mechanisms and willingness-to-pay revelation," Energy Economics, Elsevier, vol. 23(6), pages 697-715, November.
  11. Littlechild, Stephen C. & Skerk, Carlos J., 2008. "Transmission expansion in Argentina 2: The Fourth Line revisited," Energy Economics, Elsevier, vol. 30(4), pages 1385-1419, July.
  12. Galetovic, Alexander & Inostroza, Juan Ricardo, 2008. "A lesson from Argentina: Setting transmission tolls in a competitive auction is much better than regulating them," Energy Economics, Elsevier, vol. 30(4), pages 1334-1366, July.
  13. Pollitt, M.G., 2004. "‘Electricity Reform in Argentina: Lessons for Developing Countries’," Cambridge Working Papers in Economics 0449, Faculty of Economics, University of Cambridge.
  14. Doucet, Joseph & Littlechild, Stephen, 2006. "Negotiated settlements: The development of legal and economic thinking," Utilities Policy, Elsevier, vol. 14(4), pages 266-277, December.
  15. Doucet, Joseph & Littlechild, Stephen, 2009. "Negotiated settlements and the National Energy Board in Canada," Energy Policy, Elsevier, vol. 37(11), pages 4633-4644, November.
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Citations

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Cited by:
  1. Littlechild, Stephen C. & Skerk, Carlos J., 2008. "Transmission expansion in Argentina 4: A review of performance," Energy Economics, Elsevier, vol. 30(4), pages 1462-1490, July.
  2. Stephen Littlechild, 2012. "Merchant and regulated transmission: theory, evidence and policy," Journal of Regulatory Economics, Springer, vol. 42(3), pages 308-335, December.
  3. Littlechild, Stephen C. & Skerk, Carlos J., 2008. "Transmission expansion in Argentina 2: The Fourth Line revisited," Energy Economics, Elsevier, vol. 30(4), pages 1385-1419, July.
  4. Littlechild, Stephen C. & Skerk, Carlos J., 2008. "Transmission expansion in Argentina 1: The origins of policy," Energy Economics, Elsevier, vol. 30(4), pages 1367-1384, July.
  5. Littlechild, Stephen C. & Skerk, Carlos J., 2008. "Transmission expansion in Argentina 3: The evolution of policy," Energy Economics, Elsevier, vol. 30(4), pages 1420-1461, July.
  6. Jamasb, Tooraj & Pollitt, Michael, 2008. "Security of supply and regulation of energy networks," Energy Policy, Elsevier, vol. 36(12), pages 4584-4589, December.
  7. Pollitt, Michael, 2008. "Electricity reform in Argentina: Lessons for developing countries," Energy Economics, Elsevier, vol. 30(4), pages 1536-1567, July.
  8. Littlechild, Stephen C. & Skerk, Carlos J., 2008. "Transmission expansion in Argentina 6: Distribution companies, regulation and the Public Contest method," Energy Economics, Elsevier, vol. 30(4), pages 1527-1535, July.
  9. Erdogdu, Erkan, 2013. "Essays on Electricity Market Reforms: A Cross-Country Applied Approach," MPRA Paper 47139, University Library of Munich, Germany.

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