Economic regulation of quality in electricity distribution networks

Abstract This paper provides an overview of the objectives, methods, and difficulties of regulating quality in electricity distribution networks. Stricter price regulation is associated with a risk of quality degradation and thus a need for quality regulation. But information problems hinder the development of effective quality regulation schemes. This suggests that at some point the benefits of stricter price regulation will not outweigh the additional regulatory costs of setting in place adequate quality regulation.

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