Experience with Regulation of Network Quality in Italy, the UK and the Netherlands

• Autorzy: Ajodhia, V. , Petrov, K. , Scarsi, G. C. , Franken, B.
• Języki publikacji: EN

Abstrakty

EN

Both theory and practice suggest that incentive price regulation, without additional quality measures, eventually leads to quality degradation: the strong cost reduction incentives (driven by the profit incentive) have the perverse effect of inducing suh-standard quality levels. Thus, under economic regulation models using incentive schemes, quality regulation becomes imperative. This paper describes experience in Italy, the Netherlands and the UK with regulation of network quality. It shows that regulation could influence network quality significantly using different types of regulation. Starting with indirect instruments like the publication of reliability statistics, Regulators proceed with introducing standards and attached penalties, e.g. in case a power interruption takes longer than a predefined threshold, the customer facing the interruption receives a payment. Finally, incentive schemes are introduced. Incentive schemes compare measured network quality and targets. In case the network companies fail to meet their targets they are penalised. In contrary, when they exceed their targets they are rewarded. We show that, especially in Italy, network quality improved significantly, after the incentive schemes were introduced. However, the limited information about relations between costs and quality, and about customer preferences, strongly affects the effectiveness of such quality incentive schemes. Designing a method to properly compare companies and translate this into an integrated price and quality regulation system is a challenge that still lies ahead.

Słowa kluczowe

EN

quality regulation; power quality; security supply; tariff regulation; distribution network

• Czasopismo: Electrical Power Quality and Utilisation. Magazine
• Rocznik: 2006
• Tom: Vol. 2, iss. 1
• Strony: 3--9
• Opis fizyczny: Bibliogr. 7 poz., rys.

Twórcy

autor

Ajodhia, V.

autor

Petrov, K.

autor

Scarsi, G. C.

autor

Franken, B.

Bibliografia

• 1. Ajodhia V., Hakvoort R.: Economic regulation af quality 11 electricity distribution networks. 2005. Elscvicr Utilities Policy 2005.
• 2. Vircndra A., Scarsi G.C., Pelrov K.: Integrated framework for Price and Quality Regulation in Electricity Networks. October 2003, World Regulatory Forum, Roma, Italy,
• 3. CEER: Quality of Electricity Supply: Initial Benchmarking on Actual Levels, Standards and Regulatory Strategies 2001. Council of European Energy Regulators.
• 4. IEEE: IEEE trial-use guide for electric reliability indices. 1999. IEEE Std 1366-1998.
• 5. Munasinghe M.; Optimal electricity supply: reliability, pricing and system planning. 1981. Energy Economics, Vol. 3, 140-152.
• 6. Ofgem: The information and incentives project. Developing the incentive scheme. 2001, Final proposals. London, England, www.oigern.gov.uk.
• 7. SEO: Op prijs gesteld, maar nok op kwaliteit. 2004. Amsterdam, April 2004.