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Costs, Technology And Ownership Form Of Natural Gas Distribution In Italy

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    The analysis of the technology and costs of the gas distribution networks highlights that the number of customers is more important than the amount of gas delivered, as well as the absence of economies of scale, the presence of economies of density and the significant role of the morphologic and demographic variables. The diversification towards other services, such as water and electricity, provides good opportunities for efficiency. The lower costs for private operators and the constant economies of scale indicate that the privatisation process should continue and confirm the benefits of having many operators (yardstick competition). The control of monopoly rents in efficient conditions requires the use of a tariff system similar to a price-cap, provided that it takes into account the territorial constraints.

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    File URL: http://www.ceris.cnr.it/ceris/workingpaper/1997/wp13_97.pdf
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    Paper provided by Institute for Economic Research on Firms and Growth - Moncalieri (TO) in its series CERIS Working Paper with number 199713.

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    Length: 22 pages Keywords : Gas utilities, Costs, Public and private enterprise
    Date of creation: Dec 1997
    Date of revision:
    Handle: RePEc:csc:cerisp:199713
    Contact details of provider: Postal: Via Real Collegio, 30 10024 - Moncalieri TO
    Phone: +39-11.6824.911
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    Web page: http://www.ceris.cnr.it/
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    1. Panzar, John C & Willig, Robert D, 1981. "Economies of Scope," American Economic Review, American Economic Association, vol. 71(2), pages 268-72, May.
    2. Klein, Christopher C., 1993. "A comparison of cost-based pricing rules for natural gas distribution utilities," Energy Economics, Elsevier, vol. 15(3), pages 176-182, July.
    3. Baumol, William J, 1977. "On the Proper Cost Tests for Natural Monopoly in a Multiproduct Industry," American Economic Review, American Economic Association, vol. 67(5), pages 809-22, December.
    4. Guldmann, Jean-Michel, 1984. "A further note on the structure of gas distribution costs in urban areas," Regional Science and Urban Economics, Elsevier, vol. 14(4), pages 583-588, November.
    5. Randy A. Nelson. & Walter J. Primeaux, Jr., 1988. "The Effects of Competition on Transmission and Distribution Costs in the Municipal Electric Industry," Land Economics, University of Wisconsin Press, vol. 64(4), pages 338-346.
    6. Daniel R. Hollas & Stanley R. Stansell, 1991. "Regulation, Ownership Form, And The Economic Efficiency Of Rural Electric Distribution Cooperatives," The Review of Regional Studies, Southern Regional Science Association, vol. 21(2), pages 201-220, Summer.
    7. Panzar, John C & Willig, Robert D, 1977. "Economies of Scale in Multi-Output Production," The Quarterly Journal of Economics, MIT Press, vol. 91(3), pages 481-93, August.
    8. Guldmann, Jean-Michel, 1983. "Modeling the structure of gas distribution costs in urban areas," Regional Science and Urban Economics, Elsevier, vol. 13(3), pages 299-316, August.
    9. Mark J. Roberts, 1986. "Economies of Density and Size in the Production and Delivery of Electric Power," Land Economics, University of Wisconsin Press, vol. 62(4), pages 378-387.
    10. Daniel R. HOLLAS & Stanley R. STANSELL, 1994. "The Economic Efficiency Of Public Vs. Private Gas Distribution Utilities," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 65(2), pages 281-300, 04.
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