Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/154970
Authors: 
Scarsi, Gian Carlo
Year of Publication: 
1999
Series/Report no.: 
Nota di Lavoro, Fondazione Eni Enrico Mattei 16.1999
Abstract: 
This paper analyses technical efficiency of local electricity distribution in Italy (1994, 1996) by using both econometric (deterministic frontier, stochastic frontier) and linear programming (Data Envelopment Analysis) tools. Cross-sectional data were examined with respect to:(a) ENEL - the Italian electricity monopolist;(b) municipal authorities (MUNIs), i.e. town-based electric utilities which sometimes hold franchises for electricity distribution within city limits.Estimation results highlighted non-exhaustion of scale economies at sample-mean values. Pooled ENEL-MUNI analysis failed to spot any systematic superiority of ENEL's units over municipalities. One-to-one comparisons confirmed that the outcomes were mixed, with ENEL's local branches outperforming MUNIs in metropolitan and (sometimes) rural areas, and MUNIs faring better in medium-sized, Po Valley towns (Northern Italy). This suggests that a case-by-case approach should be adopted by Italy's regulatory and governmental authorities when dealing with the territorial reform of electricity distribution. Similarly, any ownership transfers and/or mergers involving ENEL's units and MUNIs should depend on the varied efficiency records which were detected according to different regional and economic scenarios.
Subjects: 
Electricity
Government Policy
Efficiency
JEL: 
L94
L98
L51
Document Type: 
Working Paper

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