Benchmarking of Electricity Distribution Licensees Operating in Sri Lanka
Electricity sector regulators are practicing benchmarking of distribution companies to regulate the allowed revenue. Mainly this is carried out based on the relative efficiency scores produced by frontier benchmarking techniques. Some of these techniques, for example, Corrected Ordinary Least Square...
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doaj-b4cb5d7d7cdf4990b51c820e676f5aeb2020-11-24T22:40:45ZengHindawi LimitedJournal of Energy2356-735X2314-615X2016-01-01201610.1155/2016/24863192486319Benchmarking of Electricity Distribution Licensees Operating in Sri LankaK. T. M. U. Hemapala0Lilantha Neelawala1Department of Electrical Engineering, University of Moratuwa, 10400 Moratuwa, Sri LankaDepartment of Electrical Engineering, University of Moratuwa, 10400 Moratuwa, Sri LankaElectricity sector regulators are practicing benchmarking of distribution companies to regulate the allowed revenue. Mainly this is carried out based on the relative efficiency scores produced by frontier benchmarking techniques. Some of these techniques, for example, Corrected Ordinary Least Squares method and Stochastic Frontier Analysis, use econometric approach to estimate efficiency scores, while a method like Data Envelopment Analysis uses linear programming. Those relative efficiency scores are later used to calculate the efficiency factor (X-factor) which is a component of the revenue control formula. In electricity distribution industry in Sri Lanka, the allowed revenue for a particular distribution licensee is calculated according to the allowed revenue control formula as specified in the tariff methodology of Public Utilities Commission of Sri Lanka. This control formula contains the X-factor as well, but its effect has not been considered yet; it just kept it zero, since there were no relative benchmarking studies carried out by the utility regulators to decide the actual value of X-factor. This paper focuses on producing a suitable benchmarking methodology by studying prominent benchmarking techniques used in international regulatory regime and by analyzing the applicability of them to Sri Lankan context, where only five Distribution Licensees are operating at present.http://dx.doi.org/10.1155/2016/2486319 |
collection |
DOAJ |
language |
English |
format |
Article |
sources |
DOAJ |
author |
K. T. M. U. Hemapala Lilantha Neelawala |
spellingShingle |
K. T. M. U. Hemapala Lilantha Neelawala Benchmarking of Electricity Distribution Licensees Operating in Sri Lanka Journal of Energy |
author_facet |
K. T. M. U. Hemapala Lilantha Neelawala |
author_sort |
K. T. M. U. Hemapala |
title |
Benchmarking of Electricity Distribution Licensees Operating in Sri Lanka |
title_short |
Benchmarking of Electricity Distribution Licensees Operating in Sri Lanka |
title_full |
Benchmarking of Electricity Distribution Licensees Operating in Sri Lanka |
title_fullStr |
Benchmarking of Electricity Distribution Licensees Operating in Sri Lanka |
title_full_unstemmed |
Benchmarking of Electricity Distribution Licensees Operating in Sri Lanka |
title_sort |
benchmarking of electricity distribution licensees operating in sri lanka |
publisher |
Hindawi Limited |
series |
Journal of Energy |
issn |
2356-735X 2314-615X |
publishDate |
2016-01-01 |
description |
Electricity sector regulators are practicing benchmarking of distribution companies to regulate the allowed revenue. Mainly this is carried out based on the relative efficiency scores produced by frontier benchmarking techniques. Some of these techniques, for example, Corrected Ordinary Least Squares method and Stochastic Frontier Analysis, use econometric approach to estimate efficiency scores, while a method like Data Envelopment Analysis uses linear programming. Those relative efficiency scores are later used to calculate the efficiency factor (X-factor) which is a component of the revenue control formula. In electricity distribution industry in Sri Lanka, the allowed revenue for a particular distribution licensee is calculated according to the allowed revenue control formula as specified in the tariff methodology of Public Utilities Commission of Sri Lanka. This control formula contains the X-factor as well, but its effect has not been considered yet; it just kept it zero, since there were no relative benchmarking studies carried out by the utility regulators to decide the actual value of X-factor. This paper focuses on producing a suitable benchmarking methodology by studying prominent benchmarking techniques used in international regulatory regime and by analyzing the applicability of them to Sri Lankan context, where only five Distribution Licensees are operating at present. |
url |
http://dx.doi.org/10.1155/2016/2486319 |
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