Lucratividade e qualidade na distribuição de energia elétrica [Profitability and quality in electricity distribution]
Privatization of electricity distribution in Brasil had, as one of its stated purposes, generation of sufficient revenue to guarantee service quality and full market coverage. Theoretical considerations point towards the possible tendency to underinvestment and to quality deterioration under price-cap rate regulation, which is the system adopted for the segment of captive consumers. This paper offers an analysis of the observed performance of COELBA since its privatization, in order to assess the firm’s behavior with respect to investment and service quality. The observed results do not contradict the theoretical expectation of underinvestment. There is evidence that investment since privatization was sufficient to improve the firm’s performance with respect to its own past results; nevertheless, investment was insufficient to raise service quality to the standards of the best utilities in the country.
Volume (Year): 12 (2002)
Issue (Month): 1 (January-June)
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