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

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Abstract

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.

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Authors and Affiliations

  1. Faculty of Economics, University of Cambridge, Cambridge, UK

    Tooraj Jamasb

  2. School of Management and Languages, Heriot-Watt University, Mary Burton Building, Edinburgh, EH14 4AS, UK

    Tooraj Jamasb

  3. Centre for Regulation and Market Analysis, School of Commerce, University of South Australia, GPO Box 2471, Adelaide, SA, 5001, Australia

    Magnus Söderberg

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  1. Tooraj Jamasb
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  2. Magnus Söderberg
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Correspondence to Tooraj Jamasb.

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Jamasb, T., Söderberg, M. The Effects of Average Norm Model Regulation: The Case of Electricity Distribution in Sweden. Rev Ind Organ 36, 249–269 (2010). https://doi.org/10.1007/s11151-010-9246-8

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