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Incentive Regulation in Theory and Practice: Electricity Distribution and Transmission Networks

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  • Joskow, P.L.

Abstract

Modern theoretical principles to govern the design of incentive regulation mechanisms are reviewed and discussed. General issues associated with applying these principles in practice are identified. Examples of the actual application of incentive r egulation mechanisms to the regulation of prices and service quality for “unbundled” transmission and distribution networks are presented and discussed. Evidence regarding the performance of incentive regulation in practice for electric distribution and transmission networks is reviewed. Issues for future research are identified.

Suggested Citation

  • Joskow, P.L., 2006. "Incentive Regulation in Theory and Practice: Electricity Distribution and Transmission Networks," Cambridge Working Papers in Economics 0607, Faculty of Economics, University of Cambridge.
  • Handle: RePEc:cam:camdae:0607
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    File URL: http://www.electricitypolicy.org.uk/pubs/wp/eprg0511.pdf
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    Keywords

    regulation; incentives; networks; electricity; transmission; distribution;

    JEL classification:

    • L94 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Electric Utilities
    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation

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