Generating efficiency: economic and environmental regulation of public and private electricity generators in Spain

Arocena, Pablo; Price, Catherine Waddams

doi:10.1016/s0167-7187(00)00073-4

Cited by 88 publications

(47 citation statements)

References 26 publications

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“…However, preliminary analysis using an event study (Tsaplin 2001) indicates that privatization led to decreases in network losses. 24 Our results are consistent with findings by Arocena and Price (2002), who conclude that publicly owned companies in Spain are more efficient under cost-of-service regulation and private firms are more efficient under price cap regulation. Efficiency studies of privatized firms under incentive regulation could be used to establish benchmarks in setting prices for state-owned companies.…”

Section: Concluding Observationssupporting

confidence: 85%

Regulation of State-Owned and Privatized Utilities: Ukraine Electricity Distribution Company Performance*

Berg

Lin

Tsaplin³

2005

J Regul Econ

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Both ownership and regulation affect the behavior of utility managers. Private ownership rewards managerial decisions that enhance shareholder value. Regulatory incentives reward behavior that affects profits and costs. An empirical analysis of 24 Ukraine electricity distribution companies from 1998 to 2002 indicates that privately owned firms do respond to incentives that add to net cash flows (associated with reducing commercial and non-commercial network losses). However, they also respond more aggressively than do state-owned distribution utilities to mark-up (cost-plus) regulatory incentives that increase shareholder value but decrease cost efficiency. Copyright Springer Science+Business Media, Inc. 2005data envelopment analysis (DEA) and stochastic frontier analysis (SFA), incentive regulation, state-owned and privatized utilities,

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Section: Concluding Observationssupporting

confidence: 85%

Regulation of State-Owned and Privatized Utilities: Ukraine Electricity Distribution Company Performance*

Berg

Lin

Tsaplin³

2005

J Regul Econ

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“…Fumagalli et al (2007) do not find any differences between public and private distributors in Italy when service quality is considered. Arocena and Waddams-Price (2002) investigate the cost efficiency of public and private generators in Spain under different regulatory regimes and show that there is no difference under price-cap regulation, whereas public firms are more cost-efficient under cost-plus regulation.…”

Section: Empirical Evidence For the Electricity Sectormentioning

confidence: 99%

Productivity in Electricity Retail after Market Liberalisation: Analysing the Effects of Ownership and Firm's Governance Structure

2015

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Abstract. This paper, which is one of the first to estimate productivity in retail electricity for a European country after liberalisation, analyses the effect of ownership and governance structure by using a unique dataset of German electricity retailers from 2003 to 2012. An innovative service production function for the retail sector is derived with labour and external services as the main inputs. A structural model is used with a proxy function for productivity to overcome the endogeneity of input choice. Ownership is controlled for in the law of motion for productivity. The results of the dataset used to validate the model show that firmlevel productivity did not increase after 2008 and that ownership had no effect on productivity. The results provide useful insights into the link between ownership and productivity in modern public enterprises after liberalisation. Terms of use: Documents inJEL Classification: D24, L11, C23, L94

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“…See Crampes and Laffont (1995) for more on this. FabraUtray (2004) and Arocena and Waddams (2001) report evidence on the increase in productive efficiency achieved by the Spanish electricity generators from 1988 to 1998, while this scheme applied. 17 The Energy Commission (CNSE, 1997) argued as follows: 'the introduction of competition needs to be gradual, and firms need to be helped to adapt to the new situation.…”

Section: Competition Transition Costs (Ctcs)mentioning

confidence: 99%

The Spanish Electricity Industry: Plus ça change...

Crampes¹,

Fabra

2005

The Energy Journal

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In this paper we describe the Spanish electricity industry and its current regulatory regime. Special emphasis is given to the description and discussion of market design issues (including stranded cost recovery), the evolution of market structure, investment in generation capacity and network activities. We also provide a critical assessment of the 1997 regulatory reform, which did not succeed in introducing effective competition, but retained an opaque regulation which has been subject to continuous governmental interventionism. Furthermore, the implementation of the Kyoto agreement could show the lack of robustness of the regulatory regime.Competition is good for society because it increases efficiency and it is good for consumers because they benefit from efficiency gains through price cuts. This general principle could well have applied to the Spanish electricity industry, if only effective competition had been introduced. In 1997, the Spanish regulatory authorities reached an agreement with the electricity companies to reform the industry, 1 starting on January 1998. The main innovation introduced by the new regulatory regime was the reliance on a spot market (dominated by two large producers) as a way to allocate production and determine wholesale prices. Nevertheless, the industry remained heavily regulated in ways that made the wholesale market unable to transmit efficiency signals. Regardless of market prices, what consumers end up paying and firms receiving is ultimately determined by regulated tariffs, set by the government on a multi-year basis. Hence, contrary to the authorities' claims, the reduction in retail prices since the 1997 reform (a 16.6% in nominal terms, and a 35.6 % in real terms) does not prove its success. 2 Rather, we argue that the retail price decrease hides the lack of a real reform.

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Generating efficiency: economic and environmental regulation of public and private electricity generators in Spain

Cited by 88 publications

References 26 publications

Regulation of State-Owned and Privatized Utilities: Ukraine Electricity Distribution Company Performance*

Regulation of State-Owned and Privatized Utilities: Ukraine Electricity Distribution Company Performance*

Productivity in Electricity Retail after Market Liberalisation: Analysing the Effects of Ownership and Firm's Governance Structure

The Spanish Electricity Industry: Plus ça change...

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