Does Weather Explain the Cost and Quality? An Analysis of UK Electricity Distribution Companies
In recent years, a number of empirical studies and energy regulators have applied benchmarking techniques to measure the efficiency and performance of network utilities. An important issue has been the extent to which such results are influenced by contextual factors. Among these, weather factors are frequently discussed as being important. We use Factor Analysis and two-stage Data Envelopment Analysis techniques to examine the effect of a set of important weather factors (gale, hail, temperatures, rainfall and thunder) on the performance of electricity distribution networks in the UK. The results indicate that such factors often do not have a significant economic and statistical effect on the overall performance of the utilities. The weather parameters in some models are significant in terms of economic efficiency. After excluding network length from the outputs, the weather effect becomes less significant in the model. Hence, the network length is counteracting the weather effect. The results echo our previous findings of the importance of extending the basic model to include other inputs such as Totex, CML and network energy losses in regulatory benchmarking.
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Yu, W. & Jamasb, T. & Pollitt, M., 2007. "Incorporating the Price of Quality in Efficiency Analysis: the Case of Electricity Distribution Regulation in the UK," Cambridge Working Papers in Economics 0736, Faculty of Economics, University of Cambridge.
- Jamasb, T. & Pollitt, M., 2007.
"Incentive Regulation of Electricity Distribution Networks: Lessons of Experience from Britain,"
Cambridge Working Papers in Economics
0709, Faculty of Economics, University of Cambridge.
- Jamasb, Tooraj & Pollitt, Michael, 2007. "Incentive regulation of electricity distribution networks: Lessons of experience from Britain," Energy Policy, Elsevier, vol. 35(12), pages 6163-6187, December.
- P. Nillesen & M. Pollitt, 2010.
"Using Regulatory Benchmarking Techniques to Set Company Performance Targets: The Case of Us Electricity,"
Competition and Regulation in Network Industries,
Intersentia, vol. 11(1), pages 50-85, March.
- Nillesen, P. & Pollitt, M.G., 2008. "Using regulatory benchmarking techniques to set company performance targets: the case of US electricity," Cambridge Working Papers in Economics 0834, Faculty of Economics, University of Cambridge.
- Yang, Hongliang & Pollitt, Michael, 2009.
"Incorporating both undesirable outputs and uncontrollable variables into DEA: The performance of Chinese coal-fired power plants,"
European Journal of Operational Research,
Elsevier, vol. 197(3), pages 1095-1105, September.
- Yang, H. & Pollitt, M., 2007. "Incorporating Both Undesirable Outputs and Uncontrollable Variables into DEA: the Performance of Chinese Coal-Fired Power Plants," Cambridge Working Papers in Economics 0733, Faculty of Economics, University of Cambridge.
- Jamasb, T. & Pollitt, M., 2000. "Benchmarking and regulation: international electricity experience," Utilities Policy, Elsevier, vol. 9(3), pages 107-130, September.
- Pardo, Angel & Meneu, Vicente & Valor, Enric, 2002. "Temperature and seasonality influences on Spanish electricity load," Energy Economics, Elsevier, vol. 24(1), pages 55-70, January.
- Sailor, David J. & Muñoz, J.Ricardo, 1997. "Sensitivity of electricity and natural gas consumption to climate in the U.S.A.—Methodology and results for eight states," Energy, Elsevier, vol. 22(10), pages 987-998.
- Giannakis, Dimitrios & Jamasb, Tooraj & Pollitt, Michael, 2005. "Benchmarking and incentive regulation of quality of service: an application to the UK electricity distribution networks," Energy Policy, Elsevier, vol. 33(17), pages 2256-2271, November.
When requesting a correction, please mention this item's handle: RePEc:cam:camdae:0858. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Jake Dyer)
If references are entirely missing, you can add them using this form.