IS IT POSSIBLE A BETTER QUALITY WITH LOWER COSTS FOR THE ELECTRICAL DISTRIBUTION SYSTEM? AN APPLICATION TO THE CASE IN EUROPE

Abstract

This paper analyzes the impact of the remuneration model used by regulators on the quality of electrical service, studying the case of European distributors. Firstly the influence of variables remuneration on the quality of service is analyzed, for which a balanced panel data with information is used in nine European countries during the period 2004-2008 The main finding of our analysis is that a 1% increase in the base remuneration of the companies causes a improvement of the quality of service of the same order (unitary elasticity quality retribution). It also seems to be a close relationship between incentives and QoS, resulting more efficient to improve the quality using incentives instead of base compensation.. The UK, Italy, Spain and Austria are the countries that have higher levels of efficiency in quality in relation to the remuneration received by customers. The four countries are regulated using the Revenue Cap Price Cap and systems, so we can say that are the most efficient systems. Keywords: Quality Service; Remuneration, Regulators; International comparative; Data panels.