The Effects of Average Norm Model Regulation: The Case of Electricity Distribution in Sweden

The Effects of Average Norm Model Regulation: The Case of Electricity Distribution in Sweden Following the reform of energy sectors, some countries have used engineering norm models in incentive regulation of network utilities. In 2003, Sweden adopted this approach to regulation of electricity distribution networks. This paper examines whether the norm models represent the real networks and create incentives for performance improvement. We analyse data from 138 network concession holders between 2000 and 2007. The results show that norm models are not adequate representations of real networks. Also, utilities that perform better than their norm models tend to behave opportunistically. Finally, we find that private utilities respond more strongly to incentives. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Review of Industrial Organization Springer Journals

The Effects of Average Norm Model Regulation: The Case of Electricity Distribution in Sweden

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Publisher
Springer US
Copyright
Copyright © 2010 by Springer Science+Business Media, LLC.
Subject
Economics; Industrial Organization; Microeconomics
ISSN
0889-938X
eISSN
1573-7160
D.O.I.
10.1007/s11151-010-9246-8
Publisher site
See Article on Publisher Site

Abstract

Following the reform of energy sectors, some countries have used engineering norm models in incentive regulation of network utilities. In 2003, Sweden adopted this approach to regulation of electricity distribution networks. This paper examines whether the norm models represent the real networks and create incentives for performance improvement. We analyse data from 138 network concession holders between 2000 and 2007. The results show that norm models are not adequate representations of real networks. Also, utilities that perform better than their norm models tend to behave opportunistically. Finally, we find that private utilities respond more strongly to incentives.

Journal

Review of Industrial OrganizationSpringer Journals

Published: May 5, 2010

References

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