The Determinants of the Cost Efficiency of Electric Generating Plants: A Stochastic Frontier Approach
This article provides a detailed analysis of generation plant operating cost efficiency over the period 1988–1997. I estimate a stochastic frontier cost function together with a model of plant inefficiencies to measure the operating efficiencies of individual plants and identify factors that are associated with variations in plant efficiencies. I find evidence that plant efficiencies are associated with capacity utilization of the plant, the number of plants under utility management, and ownership form. I also find that regulatory restructuring activity in certain states is associated with improvements in plant operating performance.
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Volume (Year): 68 (2002)
Issue (Month): 4 (April)
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