Electricity distribution as an unsustainable natural monopoly: a potential outcome of New Zealand’s regulatory regime
The ongoing reform of New Zealand’s electricity supply industry has attempted to separate its potentially competitive elements from those with naturally monopolistic characteristics. Yet, some competition for distribution services is occurring, raising the question as to whether electricity distribu...
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| Veröffentlicht in: | Energy economics 1999-08, Vol.21 (4), p.385-401 |
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| container_title | Energy economics |
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| creator | Gunn, Calum Sharp, Basil |
| description | The ongoing reform of New Zealand’s electricity supply industry has attempted to separate its potentially competitive elements from those with naturally monopolistic characteristics. Yet, some competition for distribution services is occurring, raising the question as to whether electricity distributors are natural monopolies as is typically assumed. This paper presents a simple model of a representative New Zealand distribution business, and shows that, in a true economic sense, distributors are most probably sustainable natural monopolies as expected. However, the model demonstrates that a mechanism for competition may arise because the financial principles enshrined in the Ministry of Commerce’s regulatory regime can produce unsustainable cost structures and unintentionally introduce elements of contestability into the market for distribution services. |
| doi_str_mv | 10.1016/S0140-9883(99)00013-4 |
| format | Article |
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| fulltext | fulltext |
| identifier | ISSN: 0140-9883 |
| ispartof | Energy economics, 1999-08, Vol.21 (4), p.385-401 |
| issn | 0140-9883 1873-6181 |
| language | eng |
| recordid | cdi_proquest_miscellaneous_38751492 |
| source | RePEc; PAIS Index; Elsevier ScienceDirect Journals; Periodicals Index Online |
| subjects | Anti-trust legislation Applied sciences Competition Contestability Cost analysis Economic data Electric energy Electricity Electricity distribution Electricity regulation Energy Energy economics Exact sciences and technology General, economic and professional studies Monopolies Monopoly power New Zealand New Zealand electricity distribution Power supply Regulated industries Regulation Studies Sustainable development Unsustainable natural monopoly |
| title | Electricity distribution as an unsustainable natural monopoly: a potential outcome of New Zealand’s regulatory regime |
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