<abstract xml:lang="en" xmlns="http://www.w3.org/1999/xhtml"><p>This paper carries out non-parametric relative efficiency comparisons using an international sample of gas distribution utilities from two old and one new EU members, namely the Netherlands, the UK, and Slovenia. By conducting DEA on a cross-sectional sample of gas utilities, we discover that, on average, Slovenian utilities perform less efficiently than UK and Dutch utilities. To a large extent, this is due to the less extensive regulation of the Slovenian gas industry as seen in the past. The incentive-based price-cap regulation recently introduced in Slovenia could help close this efficiency gap over time. The authors also find out that different model specifications lead to very similar efficiency scores and rankings, implying that benchmarking can be employed as a useful complementary instrument for monitoring utility performance. In this way, the informational asymmetry between distribution utilities and regulatory authorities can be significantly mitigated. For the wider and more successful implementation of international benchmarking in the future, it is also important that coherent regional and international data is made available to regulators.</p></abstract>

This paper carries out non-parametric relative efficiency comparisons using an international sample of gas distribution utilities from two old and one new EU members, namely the Netherlands, the UK, and Slovenia. By conducting DEA on a cross-sectional sample of gas utilities, we discover that, on average, Slovenian utilities perform less efficiently than UK and Dutch utilities. To a large extent, this is due to the less extensive regulation of the Slovenian gas industry as seen in the past. The incentive-based price-cap regulation recently introduced in Slovenia could help close this efficiency gap over time. The authors also find out that different model specifications lead to very similar efficiency scores and rankings, implying that benchmarking can be employed as a useful complementary instrument for monitoring utility performance. In this way, the informational asymmetry between distribution utilities and regulatory authorities can be significantly mitigated. For the wider and more successful implementation of international benchmarking in the future, it is also important that coherent regional and international data is made available to regulators.

Gas Distribution Benchmarking of Utilities from Slovenia, the Netherlands and the UK: an Application of Data Envelopment Analysis

Faculty of Economics, University of Ljubljana, Ljubljana, Slovenia

South East European Journal of Economics and Business

This paper carries out non-parametric relative efficiency comparisons using an international sample of gas distribution utilities from two old and one new EU...

Gas Distribution Benchmarking of Utilities from Slovenia, the Netherlands and the UK: an Application of Data Envelopment Analysis

Published Online: Jun 03, 2011

Page range: 113 - 124

DOI: https://doi.org/10.2478/v10033-009-0008-1

Keywords
price regulation, international benchmarking, comparative efficiency analysis, DEA, gas distribution utilities

This content is open access.

Gas Distribution Benchmarking of Utilities from Slovenia, the Netherlands and the UK: an Application of Data Envelopment Analysis

Published Online: Jun 03, 2011

Page range: 113 - 124

DOI: https://doi.org/10.2478/v10033-009-0008-1

Keywordsprice regulation, international benchmarking, comparative efficiency analysis, DEA, gas distribution utilities

This content is open access.

Keywords
price regulation, international benchmarking, comparative efficiency analysis, DEA, gas distribution utilities