The 2001-3 electricity distribution price control review in the Netherlands: regulatory process and consumer welfare

Abstract

The outcome of the first electricity distribution price control review in The Netherlands did not deliver the savings initially suggested by the regulator (DTe). During the course of the first 3-year regulatory period, DTe revised the X-Factors four times. The impact on tariffs has been substantial. DTe initially announced in 2000 that savings would be equivalent to 25% of electric distribution revenues (e2bn). However, final X-Factors in May 2003 resulted in savings of 10% of revenues. The total cost to consumers-when compared to the most probable outcome-has been e140 mln (7% of total revenues).

A dynamic model for firm-response to non-credible incentive regulation regimes

“…Our model addresses the risk of regulatory failure explicitly. Our empirical illustration is based on the engineering cost model in Sweden, but other examples of failed regulation models have been documented in the Netherlands (Nillesen and Pollitt, 2007) and in Belgium (Agrell and Teusch, 2015). The qualitative findings in these cases are consistent with our predictions and results.…”

The European Single Market in Electricity: An Economic Assessment

“…Regulatory decisions can only be evaluated ex post, and it is not clear how to do this, given that there is very unlikely to be an unbiased, statistically identifiable measure of impact. Nillesen and Pollitt (2007) discuss a case study of the miscalculation of price controls in the Netherlands and how much this cost Dutch customers. It is possible to try to benchmark regulator costs across countries, but this would need to be corrected for the number of regulatory functions and economies of scale in regulation (see Domah and Pollitt 2001).…”

Cost Efficiency Analysis of Electricity Distribution Sector under Model Uncertainty

“…For example, 76 DSOs in Finland filed appeals with the Market Court against the framework put forward by the Finish Energy Market Authority (see Finnish Energy Market Authority, 2016;p.22). Cases of failed regulation models have also been documented, e.g., in Sweden (Agrell and Grifell-Tatje, 2016), the Netherlands (Nillesen and Pollitt, 2007) and Belgium (Agrell and Teusch, 2015). This has occurred because performance oriented regulations can translate to considerable financial gains and losses.…”