Framework Options for Electricity Utilities in Transition Economies: Attempting a Systematic Approach

The paper proposes a systematic approach to the question of choosing new framework conditions for ESIs in transition economies. The likely impact of ownership, structure and regulation on six chosen assessment criteria is analysed in a simple matrix model illustrating objective trade-offs. When the model is applied to the case study of the transformation of the East German ESI, it suggests a particular weakness in the area of allocative efficiency. The empirical analysis confirms the prediction of excessive price increases and highly ineffective price regulation.