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Local Electricity Distribution in Italy: Comparative Efficiency Analysis and Methodological Cross-Checking

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  • Gian Carlo Scarsi

    (London Economics Ltd.)

Abstract

This paper analyses technical efficiency of local electricity distribution in Italy (1994, 1996) by using both econometric (deterministic frontier, stochastic frontier) and linear programming (Data Envelopment Analysis) tools. Cross-sectional data were examined with respect to:(a) ENEL - the Italian electricity monopolist;(b) municipal authorities (MUNIs), i.e. town-based electric utilities which sometimes hold franchises for electricity distribution within city limits.Estimation results highlighted non-exhaustion of scale economies at sample-mean values. Pooled ENEL-MUNI analysis failed to spot any systematic superiority of ENEL's units over municipalities. One-to-one comparisons confirmed that the outcomes were mixed, with ENEL's local branches outperforming MUNIs in metropolitan and (sometimes) rural areas, and MUNIs faring better in medium-sized, Po Valley towns (Northern Italy). This suggests that a case-by-case approach should be adopted by Italy's regulatory and governmental authorities when dealing with the territorial reform of electricity distribution. Similarly, any ownership transfers and/or mergers involving ENEL's units and MUNIs should depend on the varied efficiency records which were detected according to different regional and economic scenarios.

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Bibliographic Info

Paper provided by Fondazione Eni Enrico Mattei in its series Working Papers with number 1999.16.

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Date of creation: Feb 1999
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Handle: RePEc:fem:femwpa:1999.16

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Keywords: Electricity; Government Policy; Efficiency;

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Citations

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Cited by:
  1. Taniguchi, Mariko & Kaneko, Shinji, 2009. "Operational performance of the Bangladesh rural electrification program and its determinants with a focus on political interference," Energy Policy, Elsevier, vol. 37(6), pages 2433-2439, June.
  2. Greg Murtough & David Appels & Anna Matysek & CA Knox Lovell, 2002. "Greenhouse gas emissions and the productivity growth of electricity generators," Others 0201002, EconWPA.
  3. Macedo, L., 2004. "Regulation, competition and ownership in electricity distribution companies: the effects on efficiency," Working Papers 04/09, Department of Economics, City University London.
  4. Pérez-Reyes, Raúl & Tovar, Beatriz, 2009. "Measuring efficiency and productivity change (PTF) in the Peruvian electricity distribution companies after reforms," Energy Policy, Elsevier, vol. 37(6), pages 2249-2261, June.
  5. José Bonifaz & Miguel Jaramillo, 2010. "Efficiency Analysis for Peruvian electricity distribution sector: Inefficiency’s explicative factors. A study for 2000 – 2008," Working Papers 10-04, Departamento de Economía, Universidad del Pacífico, revised Oct 2010.

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