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Ownership Unbundling in Electricity Distribution: Empirical Evidence from New Zealand

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  • Paul Nillesen
  • Michael Pollitt

Abstract

New Zealand is the only country to date to have implemented forced ownership unbundling of electricity distribution from the rest of the electricity supply industry (in 1998). This paper examines the impact of this policy on electricity prices, quality of service and costs. We find that ownership unbundling did not achieve its objectives of facilitating greater competition in the electricity supply industry but that it did lead to lower costs and higher quality of service. We suggest that this experience indicates the potential benefits of ownership unbundling in Europe but also the danger of un-intended consequences.
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Suggested Citation

  • Paul Nillesen & Michael Pollitt, 2011. "Ownership Unbundling in Electricity Distribution: Empirical Evidence from New Zealand," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 38(1), pages 61-93, January.
    • Handle: RePEc:kap:revind:v:38:y:2011:i:1:p:61-93
    DOI: 10.1007/s11151-010-9273-5
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    More about this item

    Keywords

    Electricity distribution; Ownership unbundling; New Zealand; Vertical disintegration; L94;
    All these keywords.

    JEL classification:

    • L94 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Electric Utilities

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