The 2001-3 electricity distribution price control review in the Netherlands: regulatory process and consumer welfare

The outcome of the first electricity distribution price control review in The Netherlands did not deliver the savings initially suggested by the regulator (DTe). During the course of the first 3-year regulatory period, DTe revised the X-Factors four times. The impact on tariffs has been substantial. DTe initially announced in 2000 that savings would be equivalent to 25% of electric distribution revenues (<InlineEquation ID="IEq1"> <EquationSource Format="TEX">$${\texttt{C}\!\!\!\rule[2.3pt]{.4em}{.3pt}\!\!\rule[3.3pt]{. 4em}{.3pt}}$$</EquationSource> </InlineEquation> 2bn). However, final X-Factors in May 2003 resulted in savings of 10% of revenues. The total cost to consumers—when compared to the most probable outcome—has been <InlineEquation ID="IEq2"> <EquationSource Format="TEX">$${\texttt{C}\!\!\!\rule[2.3pt]{.4em}{.3pt}\!\!\rule[3.3pt]{. 4em}{.3pt}}$$</EquationSource> </InlineEquation> 140 mln (7% of total revenues). Copyright Springer Science+Business Media, LLC 2007