Has benchmarking improved the performance of the Australian electricity distribution utilities? A meta-frontier model

Lin-Lan Bu, Maria Kopsakangas-Savolainen, Bai-Chen Xie, Hong-Zhou Li, Yi-Meng Liu and Shao-Peng Yin

Utilities Policy, 2024, vol. 88, issue C

Abstract: This research evaluates the effects of performance benchmarking for public utilities using the Australian experience, providing empirical support for the significance of mechanism design in implementing revenue-cap regulation. We estimate the efficiency and productivity of Australian electricity distribution providers by utilizing the meta-frontier framework with panel data covering the period from 2007 to 2021. Our findings indicate that introducing benchmarking has facilitated technological progress and reduced efficiency gaps among companies. However, there is no statistically significant difference in the average efficiency between the periods before and after the reform, potentially due to strategic behavior exhibited by network service providers.

Keywords: Benchmarking technique; Power distribution industry; Incentive regulation (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:juipol:v:88:y:2024:i:c:s0957178724000274

DOI: 10.1016/j.jup.2024.101734

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