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

Berg, Sanford V.; Lin, Chen; Tsaplin, Valeriy

doi:10.1007/s11149-005-3957-z

Cited by 55 publications

(36 citation statements)

References 28 publications

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“…The analysis though is restricted to the generation level. Using frontier methods Berg et al (2005) estimate the efficiency of privatized electricity distribution utilities in Ukraine showing that privatized utilities are significantly more efficient. Efficiency measures have also been used by Estache and Rossi (2005).…”

Section: Further Policy Reformsmentioning

confidence: 99%

Static vs. Dynamic Impacts of Unbundling – Electricity Markets in South America

Schober

2013

SSRN Journal

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Die Dis cus si on Pape rs die nen einer mög lichst schnel len Ver brei tung von neue ren For schungs arbei ten des ZEW. Die Bei trä ge lie gen in allei ni ger Ver ant wor tung der Auto ren und stel len nicht not wen di ger wei se die Mei nung des ZEW dar.Dis cus si on Papers are inten ded to make results of ZEW research prompt ly avai la ble to other eco no mists in order to encou ra ge dis cus si on and sug gesti ons for revi si ons. The aut hors are sole ly respon si ble for the con tents which do not neces sa ri ly repre sent the opi ni on of the ZEW. Non-technical SummaryThere is an intensive debate among academics as well as policymakers on which of the two options of unbundling, either ownership unbundling or non-discriminatory third party access, is more appropriate to foster competition and thus achieve efficient market outcomes. Whereas non-discriminatory third party access to grids and networks comprises softer forms of unbundling as informational, organizational or legal unbundling, ownership unbundling of monopolistic bottlenecks from potentially competitive value chain levels represents a much stronger approach. On the one hand, a consensus has been reached on the general advantageousness of implementing a non-discriminatory third party access regime. On the other, economists still disagree on the closely related political measure of ownership unbundling. Theoretical arguments concerning this strict form of separation are ambiguous as ownership unbundling may involve substantial restructuring costs before reducing prices in subsequent competition. The net effect is unclear a priori. In contrast, third party access might save restructuring costs but, if ineffective, leave efficiency potentials unexploited. Given these theoretical trade-offs an empirical investigation is indispensable in order to clarify whether softer measures like legal unbundling or independent transmission system operation are sufficient to make efficient operation in potentially competitive segments possible. In this article, the relative benefits of both options are investigated in static as well as in dynamic models. In prior studies, static approaches have been used to examine the effects of the measures on efficiency, prices, and distributional consequences. Market reforms, however, often induce slow adaptation processes or even reversal of initial trends after some time. Effectiveness of reforms is thus not easily measurable. A prominent example in this context is the British restructuring and privatization process. Only after several supplementary reforms competition in the wholesale electricity market started to work efficiently (cf. Newbery and Pollitt (1997)). Against this background, a dynamic framework which takes such lags into account may offer deeper insight. For the empirical analysis, the South American continent seems to be a suitable object of study, since many countries introduced regulatory reforms during the past two decades, following diverse routes. Law giving bodies have often chosen a moderate reform spee...

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Section: Further Policy Reformsmentioning

confidence: 99%

Static vs. Dynamic Impacts of Unbundling – Electricity Markets in South America

Schober

2013

SSRN Journal

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“…Thakur et al (2006), for example, reporting on a study of the Indian electricity distribution sector, found evidence that part of its inefficiency is due to the large size of the distribution companies, suggesting that restructuring and downsizing the operations may help utilities to improve their performance. Arocena (2008) Other countries where DEA has been used to evaluate the efficiency of distribution utilities include Norway (Førsund and Kittelsen, 1998;Agrell et al, 2005), Philippines (Pacudan and de Guzman, 2002), Finland (Korhonen and Syrjänen, 2003), Chile (Sanhueza et al, 2004), Colombia (Pombo and Taborda, 2006), Iran (Azadeh et al, 2009a,b), Ukraine (Berg et al, 2005) and Portugal (Weyman-Jones et al, 2004, 2008. It is important to emphasise, however, that whilst some studies exist exploring the use of DEA for the evaluation of electricity distribution utilities in Portugal, they are very rare.…”

Section: Single-country Studiesmentioning

confidence: 99%

“…(1) Network length (km); (2) Total energy net losses (in MWh). Berg, Lin and Tsaplin (2005) 24 electricity distribution companies in Ukraine…”

Section: Modelmentioning

confidence: 99%

Formative evaluation of electricity distribution utilities using data envelopment analysis

Santos

Amado

Rosado

2011

Journal of the Operational Research Society

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-The use of Data Envelopment Analysis (DEA) in the electricity distribution sector has been prolific in the number of papers published in research journals. However, while numerous studies have been documented, they have mostly been summative. Their aim has been predominantly descriptive and classificatory. This paper argues that evaluations of a formative nature are more effective than summative studies in promoting a better understanding of the structures and processes of electricity distribution utilities and, consequently, are more appropriate to contribute to performance improvement. To illustrate the use of DEA for formative evaluation, and highlight some of the difficulties of using DEA in practice, this paper compares the cost-efficiency of the Portuguese electricity distribution companies from 2002 to 2006. A dynamic analysis using Malmquist Indices is also conducted in order to evaluate the changes in productivity over this period. Our analysis shows that the application of DEA for formative purposes meets some difficulties. In particular it shows that whilst the modelling of productivity/efficiency scores using DEA is relatively straightforward, it is comparatively more difficult to develop models that are economically valid and that produce results with face validity. Based on the insights derived from this analysis the paper provides some recommendations regarding the successful application of DEA for performance improvement.

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“…In addition, a cost function must represent the underlying production (input-output) of the system (e.g., Burns and Weyman-Jones 1996;Filippini and Wild 2001;Berg et al 2005).…”

Section: Average Cost (Norm and Actual)mentioning

confidence: 99%