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The Effects of Average Norm Model Regulation: The Case of Electricity Distribution in Sweden

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Following the reform of energy sectors, some countries have used engineering norm models in incentive regulation of network utilities. In 2003, Sweden adopted this approach to regulation of electricity distribution networks. This paper examines whether the norm models represent the real networks and create incentives for performance improvement. We analyse data from 138 network concession holders between 2000 and 2007. The results show that norm models are not adequate representations of real networks. Also, utilities that perform better than their norm models tend to behave opportunistically. Finally, we find that private utilities respond more strongly to incentives.

Publication information

Original languageEnglish
JournalReview of Industrial Organization
Volume36
Issue number3
Pages (from-to)249-269
Number of pages21
ISSN0889-938X
DOIs
Publication statusPublished - 2010
Externally publishedYes

    Research areas

  • Electricity, Incentive, Regulation, Sweden

ID: 59116888