Incentive Regulation of Electricity Distribution Networks: Lessons of Experience from Britain

This paper reviews the recent experience of the UK electricity distribution sector under incentive regulation. The UK has a significant and transparent history in implementing incentive regulation in the period since 1990. We demonstrate the successes of this period in reducing costs, prices and energy losses while maintaining quality of service. We also draw out the lessons for other countries in implementing distribution sector reform. We conclude by discussing the place of incentive regulation of networks within the wider reform context, the required legislative framework, the need for appropriate unbundling, the importance of quality of service incentives, the regulatory information requirements and the role of sector rationalisation

Why Tax Energy? Towards a More Rational Energy Policy

The same fuels are taxed at widely different rates in different countries while different fuels are taxed at widely different rates within and across countries. Coal, oil and gas are all used to generate electricity, but are subject to very different tax or subsidy regimes. This paper considers what tax theory has to say about efficient energy tax design. The main factors for energy taxes are the optimal tariff argument, the need to correct externalities such as global warming, and second-best considerations for taxing transport fuels as road charges, but these are inadequate to explain current energy taxes. EU energy tax harmonisation and Kyoto suggest that the time is ripe to reform energy taxation

Why Tax Energy? Towards a More Rational Energy Policy

The same fuels are taxed at widely different rates in different countries while different fuels are taxed at widely different rates within and across countries. Coal, oil and gas are all used to generate electricity, but are subject to very different tax or subsidy regimes. This paper considers what tax theory has to say about efficient energy tax design. The main factors for energy taxes are the optimal tariff argument, the need to correct externalities such as global warming, and second-best considerations for taxing transport fuels as road charges, but these are inadequate to explain current energy taxes. EU energy tax harmonisation and Kyoto suggest that the time is ripe to reform energy taxation.tax, energy, oil, optimal tariff, externalities, exhaustible resources, global warming, road charges

Regulatory Agencies, the State and Markets: A Franco-British Comparison

The article examines whether and how independent regulatory agencies (IRAs) have altered the strategies, relationships and power of French policy makers in markets and whether they led to convergence with Britain in state-market relations. It relates these questions to broader debates about the extent to which previous policy-making systems have been transformed, whether Europe has one regulatory state or several, whether France has become a form of 'liberal market economy' and the power of the state after reform of markets. It argues that although, as in Britain, France has established IRAs with responsibilities for ensuring competition in key economic domains, French state strategies remained very different from British ones and markets operate very differently in the two countries. Moreover, the break with the past has been limited: public policy makers continue to have significant capacities to mould markets and delegation to IRAs has often reinforced the power of existing elites and aided the adaptation of traditional French industrial strategies to new conditions. Thus even if France has adopted the formal institutions of competitive markets, it has not converged with a liberal market economy such as Britain in terms of strategies and behaviour. State forms and instruments may have altered, but an activist French industrial policy is alive and well.regulation, independent regulatory agencies, electricity, 3G mobiles

Incentive Regulation of Electricity Distribution Networks: Lessons of Experience from Britain

This paper reviews the recent experience of the UK electricity distribution sector under incentive regulation. The UK has a significant and transparent history in implementing incentive regulation in the period since 1990. We demonstrate the successes of this period in reducing costs, prices and energy losses while maintaining quality of service. We also draw out the lessons for other countries in implementing distribution sector reform. We conclude by discussing the place of incentive regulation of networks within the wider reform context, the required legislative framework, the need for appropriate unbundling, the importance of quality of service incentives, the regulatory information requirements and the role of sector rationalisation.Electricity, liberalisation, regulation, benchmarking

Issues and Options for Restructuring Electricity Supply Industries

The electricity supply industry is highly capital-intensive, whose success depends critically upon the management of its investment. In most developing countries investment is poorly managed, poorly maintained, and often inadequate. Inadequate regulation or political control lead to low prices that undermine the finance of investment and give poor incentives for management and operation. The paper argues that regulation must be carefully designed to provide efficient incentives and adequate guarantees to sustain investment and operations and only then will privatisation improve performance and benefit consumers. The paper discusses the evidence for these claims, the circumstances required for full unbundling and liberalisation to be successful, and those where the Single Buyer Model or continued, ideally reformed, state ownership, may be preferable, at least until conditions improve