Lassila, Jukka; Honkapuro, Samuli; Partanen, Jarmo
Nowadays, regulatory issues have a significant role in the electricity distribution business. From the distribution companies’ point of view, one of the major challenges is to develop networks in such a way that the business is profitable for owners, while the customers get good quality electricity at a reasonable price, and also all the requirements set bythe regulator are met.
This paper addresses different investment strategies in different regulatory environments. These strategies are illustrated with some examples, in which for instance a new medium voltage feeder has to be rebuilt because of the termination of lifetime of the feeder. The examples are considered in different regulatory environments. In the paper, it is also evaluated, how different efficiency benchmarking methods (e.g. the Data Envelopment Analysis or the DEAmodel) in regulation affect the investment strategies.
