Quality Of Supply In Energy Regulation Measurement, Assessment And Experience From Norway

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Executive Summary

In order to overcome the incentive of excessive maintenance reductions and insufficient network investments in incentive regulation of electricity distribution companies, regulators throughout Europe have started regulating quality of service in the energy sector. In this paper, the authors discuss the issue of assessing and implementing quality-related incentives based on customers' WTP for network reliability and analyse the impact of such regulatory measures by means of a concrete casestudy. Surveying the most prominent methodological approaches to quantify customers' WTP for quality they find that survey techniques such as contingent valuation and conjoint analysis cover regulatory purposes well.

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