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Transmission expansion in Argentina 5: the Regional Electricity Forum of Buenos Aires Province

Author

Listed:
  • Stephen C Littlechild

    (Judge Business School,Cambridge)

  • Eduardo A Ponzano

    (Comercializadora de Energía SA, República Argentina)

Abstract

This paper supplements analyses of Argentine transmission expansions at the federal level by looking at experience in Buenos Aires province. A Regional Electricity Forum of distribution companies has drawn up and begun to implement a ten-year transmission expansion plan. Contrary to previous fears, getting agreement between the members on investment and cost sharing has not been unduly problematic. More challenging was getting approval of the provincial government on funding. Deferring tariff reductions and using the revenues for investment facilitated the process, and now some innovative financing arrangements are underway. Again contrary to some previous suggestions, the controversial Area of Influence method was extended rather than replaced. This overcame concerns about free-riding. Progress and investment have been severely curtailed by the economic crisis in 2001 and subsequent federal government policy. The arrangements nonetheless appear to be working well, and to be conducive to more efficient transmission expansion. This confirms that it is practicable and advantageous to allow users rather than the transmission company or the regulator to propose and determine transmission investment, even in a meshed rather than radial system. An appropriate regulatory framework is needed to approve that part of the total budget to paid by distribution business consumers, but this does not require the regulator to lead or monitor the detail of the process.
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Stephen C Littlechild & Eduardo A Ponzano, 2007. "Transmission expansion in Argentina 5: the Regional Electricity Forum of Buenos Aires Province," Working Papers EPRG 0729, Energy Policy Research Group, Cambridge Judge Business School, University of Cambridge.
    • Handle: RePEc:enp:wpaper:eprg0729
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    References listed on IDEAS

    as
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    7. Stephen C. Littlechild & Carlos J. Skerk, 2004. "Regulation of transmission expansion in Argentina Part I: State ownership, reform and the Fourth Line," Working Papers EP61, Energy Policy Research Group, Cambridge Judge Business School, University of Cambridge.
    8. Littlechild, Stephen C. & Skerk, Carlos J., 2008. "Transmission expansion in Argentina 2: The Fourth Line revisited," Energy Economics, Elsevier, vol. 30(4), pages 1385-1419, July.
    9. Abdala, Manuel A., 2008. "Governance of competitive transmission investment in weak institutional systems," Energy Economics, Elsevier, vol. 30(4), pages 1306-1320, July.
    10. Manuel A. Abdala & Pablo T. Spiller, 2005. "Decentralized Investment and Quality Decisions In Common-Pool Networks," Public Economics 0508004, University Library of Munich, Germany.
    11. Joseph Doucet & Stephen Littlechild, 2006. "Negotiated Settlements: The development of economic and legal thinking," Working Papers EPRG 0604, Energy Policy Research Group, Cambridge Judge Business School, University of Cambridge.
    12. Littlechild, Stephen C. & Skerk, Carlos J., 2008. "Transmission expansion in Argentina 3: The evolution of policy," Energy Economics, Elsevier, vol. 30(4), pages 1420-1461, July.
    13. Littlechild, Stephen C. & Skerk, Carlos J., 2008. "Transmission expansion in Argentina 6: Distribution companies, regulation and the Public Contest method," Energy Economics, Elsevier, vol. 30(4), pages 1527-1535, July.
    14. Stephen C. Stephen C. & Carlos J. Skerk, 2004. "Regulation of Transmission Expansion in Argentina: Part II – Developments Since the Fourth Line," Working Papers EP62, Energy Policy Research Group, Cambridge Judge Business School, University of Cambridge.
    15. Galetovic, Alexander & Inostroza, Juan Ricardo, 2008. "A lesson from Argentina: Setting transmission tolls in a competitive auction is much better than regulating them," Energy Economics, Elsevier, vol. 30(4), pages 1334-1366, July.
    16. Littlechild, Stephen C. & Skerk, Carlos J., 2008. "Transmission expansion in Argentina 4: A review of performance," Energy Economics, Elsevier, vol. 30(4), pages 1462-1490, July.
    17. Abdala, Manuel A., 2008. "Transmission pricing in privately-owned electricity grids: An illustration from the Argentine electricity pool," Energy Economics, Elsevier, vol. 30(4), pages 1284-1305, July.
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    1. Littlechild, Stephen C. & Skerk, Carlos J., 2008. "Transmission expansion in Argentina 4: A review of performance," Energy Economics, Elsevier, vol. 30(4), pages 1462-1490, July.
    2. Littlechild, Stephen C. & Skerk, Carlos J., 2008. "Transmission expansion in Argentina 3: The evolution of policy," Energy Economics, Elsevier, vol. 30(4), pages 1420-1461, July.
    3. Chambouleyron, Andrés, 2014. "Mitigating expropriation risk through vertical separation of public utilities: The case of Argentina," Utilities Policy, Elsevier, vol. 30(C), pages 41-52.
    4. Stephen Littlechild, 2012. "Merchant and regulated transmission: theory, evidence and policy," Journal of Regulatory Economics, Springer, vol. 42(3), pages 308-335, December.
    5. Strbac, Goran & Pollitt, Michael & Konstantinidis, Christos Vasilakos & Konstantelos, Ioannis & Moreno, Rodrigo & Newbery, David & Green, Richard, 2014. "Electricity transmission arrangements in Great Britain: Time for change?," Energy Policy, Elsevier, vol. 73(C), pages 298-311.
    6. Littlechild, Stephen C. & Skerk, Carlos J., 2008. "Transmission expansion in Argentina 1: The origins of policy," Energy Economics, Elsevier, vol. 30(4), pages 1367-1384, July.
    7. Pollitt, Michael, 2008. "Electricity reform in Argentina: Lessons for developing countries," Energy Economics, Elsevier, vol. 30(4), pages 1536-1567, July.
    8. Littlechild, Stephen C. & Skerk, Carlos J., 2008. "Transmission expansion in Argentina 2: The Fourth Line revisited," Energy Economics, Elsevier, vol. 30(4), pages 1385-1419, July.
    9. Erdogdu, Erkan, 2013. "Essays on Electricity Market Reforms: A Cross-Country Applied Approach," MPRA Paper 47139, University Library of Munich, Germany.
    10. Jamasb, Tooraj & Pollitt, Michael, 2008. "Security of supply and regulation of energy networks," Energy Policy, Elsevier, vol. 36(12), pages 4584-4589, December.
    11. Littlechild, Stephen C. & Skerk, Carlos J., 2008. "Transmission expansion in Argentina 6: Distribution companies, regulation and the Public Contest method," Energy Economics, Elsevier, vol. 30(4), pages 1527-1535, July.

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    More about this item

    Keywords

    Argentina; electricity; transmission; regulation;
    All these keywords.

    JEL classification:

    • L33 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Comparison of Public and Private Enterprise and Nonprofit Institutions; Privatization; Contracting Out
    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
    • L94 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Electric Utilities
    • L98 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Government Policy

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