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The 2001-3 electricity distribution price control review in the Netherlands: regulatory process and consumer welfare

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  • Paul Nillesen

    ()

  • Michael Pollitt

    ()

Abstract

The outcome of the first electricity distribution price control review in The Netherlands did not deliver the savings initially suggested by the regulator (DTe). During the course of the first 3-year regulatory period, DTe revised the X-Factors four times. The impact on tariffs has been substantial. DTe initially announced in 2000 that savings would be equivalent to 25% of electric distribution revenues ( $${\texttt{C}\!\!\!\rule[2.3pt]{.4em}{.3pt}\!\!\rule[3.3pt]{. 4em}{.3pt}}$$ 2bn). However, final X-Factors in May 2003 resulted in savings of 10% of revenues. The total cost to consumers—when compared to the most probable outcome—has been $${\texttt{C}\!\!\!\rule[2.3pt]{.4em}{.3pt}\!\!\rule[3.3pt]{. 4em}{.3pt}}$$ 140 mln (7% of total revenues). Copyright Springer Science+Business Media, LLC 2007

Suggested Citation

  • Paul Nillesen & Michael Pollitt, 2007. "The 2001-3 electricity distribution price control review in the Netherlands: regulatory process and consumer welfare," Journal of Regulatory Economics, Springer, vol. 31(3), pages 261-287, June.
  • Handle: RePEc:kap:regeco:v:31:y:2007:i:3:p:261-287
    DOI: 10.1007/s11149-006-9014-8
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    References listed on IDEAS

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    1. Severin Borenstein & James B. Bushnell & Frank A. Wolak, 2002. "Measuring Market Inefficiencies in California's Restructured Wholesale Electricity Market," American Economic Review, American Economic Association, vol. 92(5), pages 1376-1405, December.
    2. Paul L. Joskow, 1997. "Restructuring, Competition and Regulatory Reform in the U.S. Electricity Sector," Journal of Economic Perspectives, American Economic Association, vol. 11(3), pages 119-138, Summer.
    3. Mark Armstrong & Simon Cowan & John Vickers, 1994. "Regulatory Reform: Economic Analysis and British Experience," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262510790, January.
    4. Jamasb, T. & Pollitt, M., 2000. "Benchmarking and regulation: international electricity experience," Utilities Policy, Elsevier, vol. 9(3), pages 107-130, September.
    5. Preetum Domah & Michael G. Pollitt, 2001. "The restructuring and privatisation of the electricity distribution and supply businesses in England," Fiscal Studies, Institute for Fiscal Studies, vol. 22(1), pages 107-146, March.
    6. Berg, Sanford, 2000. "Developments in Best-Practice Regulation: Principles, Processes, and Performance," The Electricity Journal, Elsevier, vol. 13(6), pages 11-18, July.
    7. Jamasb, Tooraj & Pollitt, Michael, 2003. "International benchmarking and regulation: an application to European electricity distribution utilities," Energy Policy, Elsevier, vol. 31(15), pages 1609-1622, December.
    8. Crew, Michael A & Kleindorfer, Paul R, 1996. "Incentive Regulation in the United Kingdom and the United States: Some Lessons," Journal of Regulatory Economics, Springer, vol. 9(3), pages 211-225, May.
    9. Jamasb, Tooraj & Nillesen, Paul & Pollitt, Michael, 2003. "Gaming the Regulator: A Survey," The Electricity Journal, Elsevier, vol. 16(10), pages 68-80, December.
    10. Pollitt, Michael, 2005. "The role of efficiency estimates in regulatory price reviews: Ofgem's approach to benchmarking electricity networks," Utilities Policy, Elsevier, vol. 13(4), pages 279-288, December.
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    Citations

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    Cited by:

    1. Barros, Carlos Pestana & Peypoch, Nicolas, 2008. "Technical efficiency of thermoelectric power plants," Energy Economics, Elsevier, vol. 30(6), pages 3118-3127, November.
    2. Ariel Casarin, 2014. "Productivity throughout regulatory cycles in gas utilities," Journal of Regulatory Economics, Springer, vol. 45(2), pages 115-137, April.
    3. Nikogosian, Vigen & Veith, Tobias, 2011. "Vertical integration, separation and non-price discrimination: An empirical analysis of German electricity markets for residential customers," ZEW Discussion Papers 11-069, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.

    More about this item

    Keywords

    Regulation; Benchmarking; Consumer welfare; Regulatory process; X-Factor; D42; D60; K2; L5;

    JEL classification:

    • D42 - Microeconomics - - Market Structure, Pricing, and Design - - - Monopoly
    • D60 - Microeconomics - - Welfare Economics - - - General
    • K2 - Law and Economics - - Regulation and Business Law
    • L5 - Industrial Organization - - Regulation and Industrial Policy

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