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Quality, remuneration and regulatory framework: some evidence on the European electricity distribution

Author

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  • Angel Arcos-Vargas

    (University of Seville)

  • Fernando Núñez

    (University of Seville)

  • Juan Antonio Ballesteros

    (University of Seville)

Abstract

The paper is focused on modelling and analyzing the influence of different regulatory models on the level of quality of supply in electricity distribution, as measured by the duration of interruptions. The paper offers a description of the main features of the models and of the variables that influence service quality, and estimates their effect using a balanced panel data for 9 European Countries. We observe that when companies increase their remuneration by 1%, the duration of interruptions falls by approximately 1%. Regarding the regulatory models, price-cap, revenue-cap and cost plus are seen as the most efficient models for increasing the quality of service (given other resources such as revenues and incentives). The paper controls the differences between performances in the selected Countries and shows that the United Kingdom, Italy, Spain and Austria are the most efficient countries. Additionally, the paper concludes that incentives have a significant effect on quality.

Suggested Citation

  • Angel Arcos-Vargas & Fernando Núñez & Juan Antonio Ballesteros, 2017. "Quality, remuneration and regulatory framework: some evidence on the European electricity distribution," Journal of Regulatory Economics, Springer, vol. 51(1), pages 98-118, February.
    • Handle: RePEc:kap:regeco:v:51:y:2017:i:1:d:10.1007_s11149-017-9320-3
    DOI: 10.1007/s11149-017-9320-3
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    References listed on IDEAS

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    Cited by:

    1. Xie, Bai-Chen & Zhang, Zhen-Jiang & Anaya, Karim L., 2021. "Has the unbundling reform improved the service efficiency of China's power grid firms?," Energy Economics, Elsevier, vol. 95(C).
    2. Brandão, Roberto & Tolmasquim, Maurício T. & Maestrini, Marcelo & Tavares, Arthur Felipe & Castro, Nivalde J. & Ozorio, Luiz & Chaves, Ana Carolina, 2021. "Determinants of the economic performance of Brazilian electricity distributors," Utilities Policy, Elsevier, vol. 68(C).
    3. Jann T. Keller & Gerard H. Kuper & Machiel Mulder, 2020. "Competition under revenue-cap regulation with efficiency benchmarking: tariff related incentives for gas transmission system operators in merged markets," Journal of Regulatory Economics, Springer, vol. 58(2), pages 141-165, December.
    4. Ward Romeijnders & Machiel Mulder, 2022. "Optimal WACC in tariff regulation under uncertainty," Journal of Regulatory Economics, Springer, vol. 61(2), pages 89-107, April.

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    More about this item

    Keywords

    Quality of supply; Regulation; International comparison; Panel data;
    All these keywords.

    JEL classification:

    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy
    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
    • L94 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Electric Utilities

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