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The Quality of Electricity Supply and the Regulation of the Payments to the Distribution Companies

Author

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  • Julián López Millá

    (Universidad de Alicante)

Abstract

The quality of electricity supply depends, among others aspects, on the transmission and distribution networks for energy flows required to deal with the increasing demand by Spanish consumers. However, the modernization and expansion of such a function requires appropriate investments. In this paper we examine the legal framework that regulates the payments to the distribution companies in the Spanish electric industry, in order to determinate what type of incentives are provided to these companies. We also analyse if these incentives are appropriate to encourage the investments required to improve the quality of the service, and then, we make a proposal to correct the insufficiencies of the current legal framework, pointing out the guidelines that should be followed to provide incentives to improve the efficiency without overlooking the quality of the supply .Classification-JEL: L50, L51, L94

Suggested Citation

  • Julián López Millá, 2006. "The Quality of Electricity Supply and the Regulation of the Payments to the Distribution Companies," Hacienda Pública Española / Review of Public Economics, IEF, vol. 176(1), pages 43-71, April.
    • Handle: RePEc:hpe:journl:y:2006:v:176:i:1:p:43-71
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    More about this item

    Keywords

    Regulation; electricity industry; electricity distribution; quality of electricity supply;
    All these keywords.

    JEL classification:

    • L50 - Industrial Organization - - Regulation and Industrial Policy - - - General
    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
    • L94 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Electric Utilities

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