pricing of electricity distribution an empirical efficiency study in finland norway and sweden

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1、UtilitiesPolicy13(2005)15e25www.elsevier.com/locate/jupPricingofelectricitydistribution:anempiricalefficiencystudy*inFinland,NorwayandSwedenKaisaKinnunen)NationalConsumerResearchCentre,P.O.Box5,00531Helsinki,FinlandReceived17September2003;accepted11April2004AbstractTheNordiccountrieshavelonge

2、xperienceofaliberalizedelectricitysector.Themonopolyoperationsdnamely,distributionandtransmissionofelectricenergydareregulatedinanattempttopreventmonopolyrentsandtoinduceimprovementsinefficiency.ThispaperpresentsthemainresultsofanempiricalstudyonnetworkpricinginFinland,NorwayandSweden,withspe

3、cialfocusonefficiencyintheperformanceoftheutilities.TheresultsofthisefficiencystudyindicatethatthereisintheorygreatpotentialforcostsavinginNordicelectricitydistribution.Ó2004ElsevierLtd.Allrightsreserved.Keywords:Electricitydistribution;Regulation;Efficiency1.IntroductionDuetothespecialphysicalch

4、aracteristicsofelectric-ity,itsproductionandconsumptionmusttakeplaceLiberalizationoftheelectricitysectorintheNordicsimultaneously.Storagepossibilitiesarestillfewand/orcountriesproceededrapidlyduringthe1990softhelastexpensive(PernerandRiechmann,1997).Thecompet-millennium.Norwayliberalizedits

5、electricitymarketitiveactivitiesinthesector(generationandsales),alreadyin1991asthefirstcountryinEurope.Encour-therefore,aredependentonthenaturalmonopoliesagedbythegoodexperiencesofNorway,theSwedish(distributionandtransmission),andthenetworks,thus,andtheFinnishelectricitymarketsfollowedsuitei

6、nconstitutetheso-calledmonopolisticbottlenecks(Knieps,1996and1997,respectively.2001).Hence,theseportionsofthemarketstillrequireLiberalizationoftheelectricitymarketmeantthatregulationtopreventthemfrom(ab)usingtheirmarketthegenerationandsalesofelectricitybecamecompet-power.Successfulregulatio

7、nofthedistributionutilitiesitivefieldsofbusiness.Thedistributionandtrans-wouldkeeptariffsreasonable,which,inturn,wouldmissionofelectricity,however,remainednaturalencouragecompetitioninthebusinessportionofthemonopolies.Theseoperationsshowsubadditivecostssec