Improving the regulatory framework in order to increase the efficiency of electricity distribution and supply

Abstract

The subject addressed in this paper is the impact of regulatory framework changes on the efficiency of electricity distribution and supply, in vertically integrated power companies. The case study of Serbian DSO and public supplier, integrated into the EPS Group, is presented. The adequacy of the regulatory formula for the maximum allowed revenues of regulated activities, and tariffs for determining network fees and prices for guaranteed (public) supply has been analyzed. The analysis identified the areas of possible regulatory improvements, with a proposal for establishing a regulatory strategy, whose implementation could increase the efficiency of EPS Group. A set of measures, based on the estimated impact on EBITDA, has been proposed. The importance of creation, updating and the use of the Regulatory Risk Register has been emphasized, too.