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Regulating the Electricity Sector in Latin America

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  • Pablo Serra
  • Ronald Fischer

Abstract

During the past decade most Latin American countries reformed and liberalized their electric sectors. This paper examines these reforms, providing a critical examination of the effects. Late reformers learnt from the experience of earlier reforming countries, and in particular from the Chilean experience. This evolutionary process has meant less regulation of segments that are or can be made to be competitive (generation and commercial services) and more regulation of the non-competitive sectors (transmission and distribution) combined with the vertical disintegration of competitive and noncompetitive segments of the industry. Nevertheless, a market approach to generation must worry about the possibility of strategic behavior by generating companies. Some open questions remain, for example, how to solve the problem of the expansion of the transmission system and how to strike a balance between a regulator that has some freedom of action to react to unforeseen events, and the corresponding fear of regulatory takings.

Suggested Citation

  • Pablo Serra & Ronald Fischer, 2000. "Regulating the Electricity Sector in Latin America," Economía Journal, The Latin American and Caribbean Economic Association - LACEA, vol. 0(Fall 2000), pages 155-218, August.
    • Handle: RePEc:col:000425:008712
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    Cited by:

    1. Alberto Chong & Florencio de, 2003. "The Truth about Privatization in Latin America," Yale School of Management Working Papers ysm436, Yale School of Management.
    2. Jamasb, Tooraj, 2006. "Between the state and market: Electricity sector reform in developing countries," Utilities Policy, Elsevier, vol. 14(1), pages 14-30, March.
    3. Galetovic, Alexander & Muñoz, Cristián M., 2011. "Regulated electricity retailing in Chile," Energy Policy, Elsevier, vol. 39(10), pages 6453-6465, October.
    4. Martín Rossi, 2015. "Using Labor Productivity Change Estimates as an Input for X-Factors in Price-Cap Regulation," Working Papers 118, Universidad de San Andres, Departamento de Economia, revised Feb 2015.
    5. David Newbery, 2002. "Issues and options for restructuring electricity supply industries," Working Papers EP01, Energy Policy Research Group, Cambridge Judge Business School, University of Cambridge.
    6. Jamasb, T., 2002. "Reform and Regulation of the Electricity Sectors in Developing Countries," Cambridge Working Papers in Economics 0226, Faculty of Economics, University of Cambridge.
    7. Pietrosemoli, Licia & Rodríguez-Monroy, Carlos, 2019. "The Venezuelan energy crisis: Renewable energies in the transition towards sustainability," Renewable and Sustainable Energy Reviews, Elsevier, vol. 105(C), pages 415-426.
    8. Dal Bo, Ernesto & Rossi, Martin A., 2007. "Corruption and inefficiency: Theory and evidence from electric utilities," Journal of Public Economics, Elsevier, vol. 91(5-6), pages 939-962, June.
    9. M. Pollitt, 2004. "Electricity reform in Chile. Lessons for developing countries," Competition and Regulation in Network Industries, Intersentia, vol. 5(3), pages 221-263, September.
    10. Mota, R.L., 2004. "‘Comparing Brazil and USA electricity performance; what was the impact of privatisation?’," Cambridge Working Papers in Economics 0423, Faculty of Economics, University of Cambridge.
    11. Pineau, Pierre-Olivier & Hira, Anil & Froschauer, Karl, 2004. "Measuring international electricity integration: a comparative study of the power systems under the Nordic Council, MERCOSUR, and NAFTA," Energy Policy, Elsevier, vol. 32(13), pages 1457-1475, September.
    12. Finon, Dominique, 2006. "Incentives to invest in liberalised electricity industries in the North and South. Differences in the need for suitable institutional arrangements," Energy Policy, Elsevier, vol. 34(5), pages 601-618, March.
    13. Kumar, Shashwat, 2022. "Taking root: Independent Regulatory Agency model of regulation in Indian electricity sector," Energy Policy, Elsevier, vol. 164(C).
    14. Adwoa Asantewaa & Tooraj Jamasb & Manuel Llorca, 2022. "Electricity Sector Reform Performance in Sub-Saharan Africa: A Parametric Distance Function Approach," Energies, MDPI, vol. 15(6), pages 1-29, March.
    15. Stern, J., 2000. "Electricity and telecommunications regulatory institutions in small and developing countries," Utilities Policy, Elsevier, vol. 9(3), pages 131-157, September.
    16. Estache, Antonio & Rossi, Martin, 2004. "Have consumers benefited from the reforms in the electricity distribution sector in Latin America?," Policy Research Working Paper Series 3420, The World Bank.
    17. Escobari, Diego, 2011. "A theoretical model of collusion and regulation in an electricity spot market," MPRA Paper 32178, University Library of Munich, Germany.
    18. Amann, Edmund & Baer, Werner, 2005. "From the developmental to the regulatory state: the transformation of the government's impact on the Brazilian economy," The Quarterly Review of Economics and Finance, Elsevier, vol. 45(2-3), pages 421-431, May.
    19. Pietrosemoli, Licia & Rodríguez Monroy, Carlos, 2013. "The impact of sustainable construction and knowledge management on sustainability goals. A review of the Venezuelan renewable energy sector," Renewable and Sustainable Energy Reviews, Elsevier, vol. 27(C), pages 683-691.
    20. Ioannis N. Kessides, 2005. "The Challenges of Infrastructure Privatisation," ifo DICE Report, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 3(1), pages 19-25, 04.

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    More about this item

    Keywords

    electric sector; competition; regulation; Latin America;
    All these keywords.

    JEL classification:

    • H32 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Firm
    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
    • L94 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Electric Utilities
    • O25 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Industrial Policy

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