Mohsen Pourebadollahan Covich; Firouz Fallahi; Kioumars Heydari; Pouyan Kiani
Abstract
Since electricity distribution companies operate in various environmental conditions, their relative efficiency scores used for regulation purposes, should be corrected for environmental factors that could influence the underlying efficiency of them. This paper conducts efficiency correction for 39 Iranian ...
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Since electricity distribution companies operate in various environmental conditions, their relative efficiency scores used for regulation purposes, should be corrected for environmental factors that could influence the underlying efficiency of them. This paper conducts efficiency correction for 39 Iranian electricity distribution companies applying two stage (DEA and Tobit) analysis in 2015. Accordingly, first to the efficiency performances of the electricity distribution companies are determined using DEA. In the second stage, the Tobit model is emploied to determine the environment factors which may explain the calculated efficiency scores. Based on the results, the rainfall level and the customer mix have negative and positive effects on efficiency of electricity distribution companies, respectively. Hence, the primary efficiency scores of DEA are corrected for environmental influences. The comparison of the primary and the corrected efficiencies indicate a significant changes in the efficiency scores and the ranking of the Iranian electricity distribution companies, such that the efficiency of companies with higher rainfall and lower industrial customers relative to their average, have increased, and vice versa.
