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Productivity and Efficiency of US Gas Transmission Companies: A European Regulatory Perspective

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  • Jamasb, T.
  • Pollitt, M.G.
  • Triebs, T.

Abstract

On both sides of the Atlantic the regulation of gas transmission networks has undergone major changes since the early 1990’s. Whereas in the US the long-standing regime of cost-plus regulation was complemented by increasing pipe-to-pipe competition, most European countries moved towards incentive regulation complemented by market integration. We study the impact of US regulatory reform using a Malmquist-based productivity analysis for a panel of US interstate companies. Results are presented for changes in productivity, as well as for several convergence tests. The results indicate that taking productivity and convergence as performance indicators, regulation has been rather successful, in particular during a period where overall demand was flat. Lessons for European regulators are twofold. First, the US analysis shows that benchmarking of European transmission operators would be possible if data were available. Second, our results suggest that, in the long-run, market integration and competition are alternatives to the current European model.

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Bibliographic Info

Paper provided by Faculty of Economics, University of Cambridge in its series Cambridge Working Papers in Economics with number 0812.

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Length: 24
Date of creation: Mar 2008
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Handle: RePEc:cam:camdae:0812

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Related research

Keywords: Natural gas transmission; utility regulation; data envelopment analysis; total factor productivity; convergence;

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Citations

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Cited by:
  1. Capece, Guendalina & Cricelli, Livio & Di Pillo, Francesca & Levialdi, Nathan, 2010. "A cluster analysis study based on profitability and financial indicators in the Italian gas retail market," Energy Policy, Elsevier, vol. 38(7), pages 3394-3402, July.
  2. Dana PANCUROVA & Stefan LYOCSA, 2013. "Determinants of Commercial Banks’ Efficiency: Evidence from 11 CEE Countries," Czech Journal of Economics and Finance (Finance a uver), Charles University Prague, Faculty of Social Sciences, vol. 63(2), pages 152-179, May.
  3. Anne Neumann & Maria Nieswand & Torben Schubert, 2013. "Estimating Alternative Technology Sets in Nonparametric Efficiency Analysis: Restriction Tests for Panel and Clustered Data," RSCAS Working Papers 2013/13, European University Institute.
  4. Tooraj Jamasb & Rabindra Nepal, 2014. "Incentive Regulation and Benchmarking of Network Security," Discussion Papers Series 522, School of Economics, University of Queensland, Australia.
  5. Steven Brakman & J.G.M. van Marrewijk & A. van Witteloostuijn, 2009. "Market liberalization in the European natural gas market : the importance of capacity constraints and efficiency differences," Working Papers 09-15, Utrecht School of Economics.
  6. Fang, Hong & Wu, Junjie & Zeng, Catherine, 2009. "Comparative study on efficiency performance of listed coal mining companies in China and the US," Energy Policy, Elsevier, vol. 37(12), pages 5140-5148, December.
  7. Haney, Aoife Brophy & Pollitt, Michael G., 2013. "International benchmarking of electricity transmission by regulators: A contrast between theory and practice?," Energy Policy, Elsevier, vol. 62(C), pages 267-281.

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