The Effects of Competition on Transmission and Distribution Costs in the Municipal Electric Industry

The feasibility of competitive electricity transmission in South Africa

“…According to Nelson and Primeaux (1988) the presence of scale economies at all output levels in transmission and distribution does not imply that natural monopoly exists. They cited a study that showed that economies of scale only existed if a monopolist's output was increased to existing customers.…”

Relative efficiency benefits of wholesale and retail competition in electricity: An analysis and a research agenda

“…In addition to transaction-cost considerations, the efficient size of the Disco also depends on the extent of economies or diseconomies of scale in the supply of distribution services. A few econometric studies have addressed this question (Nelson and Primeaux 1988;Roberts 1986;Kaserman and Mayo 1991). Although all of these studies find evidence of economies of scale associated with increasing the number of kilowatt-hours distributed to customers, 36 Roberts finds that there are no economies or diseconomies of scale associated with increasing the number of customers in a distribution company's service territory holding output per customer and density constant.…”

Geography And The Capital Investment Costs Of Urban Energy Infrastructure: The Case Of Electricity And Natural Gas Networks

“…In fact, distribution is the phase most-related to urban-level decision-making, thus, local urban, geographic and socio-economic variables are expected to play important roles in the economic structure of investments. Henderson (1985), Nelson and Primeaux (1988), Nemoto et al (1993), and Salvanes and Tjotta (1998) analyze the monopolistic structure of the industry, and all studies, except for Nemoto et al (1993), find evidence of natural monopoly. Meyer (1975), Neuberg (1977), andClagett (1994) compare the costs and efficiencies of municipal, cooperative and private utilities, while the first two authors favoring municipal firms and the last one cooperative utilities.…”

“…Primeaux (1975), Weiss (1975), Meyer (1975), and Roberts (1986) do not take any urban, geographic or socio-economic variables into account, but only the inputs and outputs of the industry. Huettner and Landon (1978), Kaserman and Mayo (1991) and Kwoka (1996) use regional dummies; while Nelson and Primeaux (1988) and Thompson (1997) use service territory area, and Gilsdorf (1995), Kwoka (2002) and Fraquelli et al (2005) consider density variable in addition to market characteristics.…”