The Quality of Electricity Supply and the Regulation of the Payments to the Distribution Companies

Julián López Millá ()
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Julián López Millá: Universidad de Alicante

Hacienda Pública Española / Review of Public Economics, 2006, vol. 176, issue 1, 43-71

Abstract: The quality of electricity supply depends, among others aspects, on the transmission and distribution networks for energy flows required to deal with the increasing demand by Spanish consumers. However, the modernization and expansion of such a function requires appropriate investments. In this paper we examine the legal framework that regulates the payments to the distribution companies in the Spanish electric industry, in order to determinate what type of incentives are provided to these companies. We also analyse if these incentives are appropriate to encourage the investments required to improve the quality of the service, and then, we make a proposal to correct the insufficiencies of the current legal framework, pointing out the guidelines that should be followed to provide incentives to improve the efficiency without overlooking the quality of the supply .Classification-JEL: L50, L51, L94

Keywords: Regulation; electricity industry; electricity distribution; quality of electricity supply (search for similar items in EconPapers)
Date: 2006
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