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Transmission expansion in Argentina 5: the Regional Electricity Forum of Buenos Aires Province

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Author Info
Littlechild, S.C.
Ponzano, E.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 ten-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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Publisher Info
Paper provided by Faculty of Economics, University of Cambridge in its series Cambridge Working Papers in Economics with number 0762.

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Length: 24
Date of creation: Dec 2007
Date of revision:
Handle: RePEc:cam:camdae:0762

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Web page: http://www.econ.cam.ac.uk/index.htm

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Related research
Keywords: Argentina; electricity; transmission; regulation.;

Find related papers by JEL classification:
L33 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Boundaries of Public and Private Enterprise; Privatization; Contracting Out
L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
L94 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Electric Utilities
L98 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Government Policy

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References listed on IDEAS
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  1. 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. [Downloadable!] (restricted)
  2. Doucet, Joseph & Littlechild, Stephen, 2006. "Negotiated settlements: The development of legal and economic thinking," Utilities Policy, Elsevier, vol. 14(4), pages 266-277, December. [Downloadable!] (restricted)
  3. Pollitt, Michael, 2008. "Electricity reform in Argentina: Lessons for developing countries," Energy Economics, Elsevier, vol. 30(4), pages 1536-1567, July. [Downloadable!] (restricted)
    Other versions:
  4. David M. Newbery, 2002. "Privatization, Restructuring, and Regulation of Network Utilities," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262640481, December.
  5. Manuel A. Abdala & Pablo T. Spiller, 2005. "Decentralized Investment and Quality Decisions In Common-Pool Networks," Public Economics 0508004, EconWPA. [Downloadable!]
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