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Independent regulation of government-owned monopolies: An oxymoron? The case of electricity distribution in Australia

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  • Mountain, Bruce

Abstract

The network component of household electricity bills served by government-owned network service providers in Australia more than doubled between 2007 and 2013. Their regulated assets and profits more than tripled over this period. These outcomes have been delivered under a similar system of price cap regulation that has delivered quite different outcomes in Great Britain, and in Victoria (Australia) to the privately owned network service providers in that state. We conclude that changes in operating conditions, demand, customer numbers or reliability do not explain this. Rather we find that government ownership has undermined the authority and independence of economic regulation. The Australian experience in the regulation of government-owned electricity distributors casts doubt on the assumption that regulation can be entirely independent of government ownership, or would operate in the same way as for an entity in private ownership.

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  • Mountain, Bruce, 2014. "Independent regulation of government-owned monopolies: An oxymoron? The case of electricity distribution in Australia," Utilities Policy, Elsevier, vol. 31(C), pages 188-196.
    • Handle: RePEc:eee:juipol:v:31:y:2014:i:c:p:188-196
    DOI: 10.1016/j.jup.2014.09.011
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    References listed on IDEAS

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    Cited by:

    1. Osvaldo Candido & Wilfredo L. Maldonado & Cintia L. M. Araujo, 2021. "Private or Public Enterprises? Cost Inefficiency Limits - An Application to Water Supply Companies in Brazil," Working Papers, Department of Economics 2021_09, University of São Paulo (FEA-USP).
    2. Peci, Alketa & D’Assunção, Márcio Leite & Holperin, Michelle Moretzsohn & de Souza, Celso Florêncio, 2017. "Regulation inside government: The challenges of regulating a government-owned utility," Utilities Policy, Elsevier, vol. 49(C), pages 61-70.

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    More about this item

    Keywords

    Independent regulation; Ownership and regulation; Electricity distribution; Price cap regulation;
    All these keywords.

    JEL classification:

    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms

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