Latin America-Price Cap Regulation: Stimulating Efficiency in Electricity Distribution in Latin America

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Date
2007
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Journal ISSN
Volume Title
Publisher
IEEE
Abstract
In order to regulate the electrical power distribution stage, most of these countries have adopted price cap regulations, using concepts such as the "model/standard utility" or benchmarking schemes (i.e. efficiency frontiers). The "standard utility model" corresponds to a company whose investments are economically adapted to demand and operates under an optimal plan. In setting distribution tariffs, because of the very monopolistic nature of the activity, both models (standard utility and benchmarking techniques) intend to introduce a virtual competition, trying to make companies more efficient, thus minimizing the present value of all their costs.
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Keywords
Power generation, Electronic mail, Power distribution, Power generation economics, Electricity supply industry, Monopoly, Regulators, Power & Energy Society, Energy consumption, USA Councils
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