Regulation in practice: Choice among regulatory Tools for the 11th international conference on the European energy market

Abstract

In the European Union, each Member State has defined its own regulatory framework for electricity distribution. In this paper, we collect data on the regulation of electricity distribution for 24 European countries and we classify their regulatory method along two key dimensions: the costreimbursement rule (cost-recovery Vs. incentive regulation) and the cost-estimation rule (budget Vs. benchmark). We then look at the factors influencing the choice of a particular regulatory model.