Pitfalls in estimating the X-factor: the case of energy transmission regulation in Brazil
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Universidade Federal de Minas Gerais
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Artigo de periódico
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Membros da banca
Resumo
In Brazil, which has one of the biggest energy systems in the world, the National Electricity Regulatory Agency
(Agência Nacional de Energia Elétrica – ANEEL) regulates the generation, transmission, distribution and commercialization of electricity. As a key step in running the incentive regulation regime, the regulator applies a
DEA-based Malmquist index for estimating the X-factor, which reflects productivity gains that can be expected
across all companies involved in the industry. This paper investigates the way the X-factor was estimated in 2015
by ANEEL in the transmission sector concerning the review period 2009–2014. The regulator applies a modified
version of the Malmquist index developed by Ray and Desli [1] and also adapts the bootstrapping method of
Simar and Wilson [2] to generate confidence intervals for an estimate of the X-factor. Analyzing ANEEL's approach, we have discovered a number of serious analytical and computational shortcomings, which we demonstrate in the paper. On this basis, we address the effect of the estimated X-factor on social welfare, having the
final customers to pay a higher price for electricity than they were supposed to.
Abstract
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Energia, Agência Nacional de Energia Elétrica (Brasil)
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Data envelopment analysis, X-factor estimation, Energy transmission regulatio
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https://www.sciencedirect.com/science/article/pii/S0038012117302446