Disincentive Regulation Evidence for Ratchet Effect among German Electricity Distribution System Operators (DSOs)

摘要

1. Empirical evidence for ratchet effect: cost inflation in base year2. Rather efficient DSOs in revenue cap regime piled up most costs and lost their initially high level of cost efficiency2.1 Ignoring heterogeneity in firm efficiency by setting uniform efficiency targets creates the disincentive to invest inefficiently3. Too much simplification comes at a price4. Strong point for yardstick regulation.