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Benchmarking and Regulation of Electricity Transmission and Distribution Utilities: Lessons from International Experience

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Author Info
Jamasb, T.
Pollitt, M.

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Abstract

Since the early 1980’s, many countries have implemented electricity sector reform, many of which have bundled generation, transmission, distribution and supply activities, and have introduced competition in generation and supply. An increasing number of countries are also adopting incentive regulation to promote efficiency improvement in the natural monopoly activities - transmission and distribution. Incentive regulation almost invariably involves benchmarking or comparison of actual vs. some reference performance. This paper reviews the main approaches to incentive regulation and discusses various benchmarking methods. We also present the finding of a survey of the use of benchmarking methods in the OECD and few other countries. Our survey finds a variety of methods used by the electricity regulators although with a notable preference for the non-parametric methods. We then draw conclusions based on the finding of the survey highlighting the main outstanding issues and lessons for best practice implementation of benchmarking in electricity regulation.

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Publisher Info
Paper provided by Faculty of Economics, University of Cambridge in its series Cambridge Working Papers in Economics with number 0101.

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Length: 34
Date of creation: Jan 2001
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Handle: RePEc:cam:camdae:0101

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Related research
Keywords: electricity; benchmarking; incentive regulation; data envelopment analysis; stochastic frontier analysis;

Find related papers by JEL classification:
L43 - Industrial Organization - - Antitrust Issues and Policies - - - Legal Monopolies and Regulation or Deregulation
L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
L94 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Electric Utilities

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References listed on IDEAS
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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Full references

Cited by:
(explanations, 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.)

  1. Ligia Melo B. & Néstor Espinosa, 2004. "Ineficiencia En La Distribución De Energía Eléctrica: Una Aplicación De Las Funciones De Distancia Estocástica," BORRADORES DE ECONOMIA 002843, BANCO DE LA REPÚBLICA. [Downloadable!]
    Other versions:
  2. Jamasb, T. & Pollitt, M., 2007. "Reference Models and Incentive Regulation of Electricity Distribution Networks: An Evaluation of Sweden’s Network Performance Assessment Model (NPAM)," Cambridge Working Papers in Economics 0747, Faculty of Economics, University of Cambridge. [Downloadable!]
    Other versions:
  3. Yin-Fang Zhang & David Parker & Colin Kirkpatrick, 2005. "Assessing the Effects of Privatisation, Competition and Regulation on Economic Performance: The Case of Electricity Sector Reform," SCAPE Policy Research Working Paper Series 0511, National University of Singapore, Department of Economics, SCAPE. [Downloadable!]
  4. Leticia Blázquez Gómez & Emili Grifell-Tatjé, 2004. "Regulación de la Distribución Eléctrica en España: Análisis Económico de una Década, 1987-1997," Working Papers 200401, Department of Business Economics, Universitat Autonoma de Barcelona. [Downloadable!]
  5. Supawat Rungsuriyawiboon & Tim Coelli, 2004. "Regulatory Reform and Economic Performance in US Electricity Generation," CEPA Working Papers Series WP062004, School of Economics, University of Queensland, Australia. [Downloadable!]
  6. Jamasb, T., 2002. "Reform and Regulation of the Electricity Sectors in Developing Countries," Cambridge Working Papers in Economics 0226, Faculty of Economics, University of Cambridge. [Downloadable!]
  7. Zhang, Yin-Fang & Kirkpatrick, Colin & Parker, David, 2002. "Electricity Sector Reform in Developing Countries: An Econometric Assessment of the Effects of Privatisation, Competition and Regulation," Centre on Regulation and Competition (CRC) Working papers 30593, University of Manchester, Institute for Development Policy and Management (IDPM). [Downloadable!]
    Other versions:
  8. Toru Hattori & Jamasb, T. & Pollitt, M.G., 2002. "Relative Performance of UK and Japanese Electricity Distribution Systems 1985-1998: Lessons for Incentive Regulation," Cambridge Working Papers in Economics 0212, Faculty of Economics, University of Cambridge. [Downloadable!]
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