The Determinants of the Cost Efficiency of Electric Generating Plants: A Stochastic Frontier Approach

L. Dean Hiebert

Southern Economic Journal, 2002, vol. 68, issue 4, 935-946

Abstract: This article provides a detailed analysis of generation plant operating cost efficiency over the period 1988‐1997. I estimate a stochastic frontier cost function together with a model of plant inefficiencies to measure the operating efficiencies of individual plants and identify factors that are associated with variations in plant efficiencies. I find evidence that plant efficiencies are associated with capacity utilization of the plant, the number of plants under utility management, and ownership form. I also find that regulatory restructuring activity in certain states is associated with improvements in plant operating performance.

Date: 2002
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https://doi.org/10.1002/j.2325-8012.2002.tb00467.x

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Persistent link: https://EconPapers.repec.org/RePEc:wly:soecon:v:68:y:2002:i:4:p:935-946

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