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Transmission expansion in Argentina 6: Distribution companies, regulation and the Public Contest method

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  • Littlechild, Stephen C.
  • Skerk, Carlos J.

Abstract

Argentina's 1992 electricity reform introduced the Public Contest method, which made major expansions of the transmission system the responsibility of users rather than the transmission company or regulatory body. It was sometimes said that the incentives and penalties on distribution companies were inadequate, and that they did not support transmission expansions to improve quality of service, notably a reserve transformer in the tourist town of Bariloche. We note that, in practice, the incentives and penalties varied significantly between Federal and provincial jurisdictions. Although the penalties were scheduled to increase over time at the Federal level, the Federal regulator ENRE reduced the severity of their enforcement, thereby reducing the incentive to support expansions. In practice, however, distribution companies supported all but 2 of 14 expansions proposed by the transmission concessionaire. In both these exceptional cases the provincial regulators opposed the expansion. At Bariloche, the provincial regulators argued that there were better ways of providing the quality of service, and refused to allow the distribution companies to pass-through the costs to customers. Later, provincial regulators began to introduce improved arrangements for enabling distribution companies to pay for transmission expansions.

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Bibliographic Info

Article provided by Elsevier in its journal Energy Economics.

Volume (Year): 30 (2008)
Issue (Month): 4 (July)
Pages: 1527-1535

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Handle: RePEc:eee:eneeco:v:30:y:2008:i:4:p:1527-1535

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Web page: http://www.elsevier.com/locate/eneco

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Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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  1. Littlechild, S.C. & Ponzano, E.A., 2007. "Transmission expansion in Argentina 5: the Regional Electricity Forum of Buenos Aires Province," Cambridge Working Papers in Economics 0762, Faculty of Economics, University of Cambridge.
  2. 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.
  3. 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.
  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.
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Cited by:
  1. Littlechild, Stephen C. & Ponzano, Eduardo A., 2008. "Transmission expansion in Argentina 5: The regional electricity forum of Buenos Aires province," Energy Economics, Elsevier, vol. 30(4), pages 1491-1526, July.
  2. Erdogdu, Erkan, 2013. "Essays on Electricity Market Reforms: A Cross-Country Applied Approach," MPRA Paper 47139, University Library of Munich, Germany.
  3. 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.
  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, 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.
  6. 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.

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