Quality, remuneration and regulatory framework: some evidence on the European electricity distribution.

The paper is focused on modelling and analyzing the influence of different regulatory models on the level of quality of supply in electricity distribution, as measured by the duration of interruptions. The paper offers a description of the main features of the models and of the variables that influence service quality, and estimates their effect using a balanced panel data for 9 European Countries. We observe that when companies increase their remuneration by 1%, the duration of interruptions falls by approximately 1%. Regarding the regulatory models, price-cap, revenue-cap and cost plus are seen as the most efficient models for increasing the quality of service (given other resources such as revenues and incentives). The paper controls the differences between performances in the selected Countries and shows that the United Kingdom, Italy, Spain and Austria are the most efficient countries. Additionally, the paper concludes that incentives have a significant effect on quality. [ABSTRACT FROM AUTHOR]